Posted by : Randy Cooper in (CDN)

Why are #telecom operators deploying #CDN ?

Stef van der Ziel wrote on his blog:
Telecom operators have a four-way strategy to own an on-net CDN. On-net CDNs offer deeper network penetration with better QoS and larger capacity. The CDN’s that we deploy support all popular delivery technologies for the web, mobile and IPTV. This means that the telecom operators can:

1. optimize on-net traffic flow, reduce backbone and peering load
2. host and deliver on-net web, mobile and IPTV services
3. sell CDN resources to content owners
4. Take back the distribution role in the value chain

External CDNs could only have addressed number 3 in this list. Outsourcing to a global CDN could have been a short term strategy, just to get into the content CDN business. Content owners will see right through this rebranding and would then prefer to do direct business with the actual CDN rather than through a reseller.
ISP’s generally feel that CDN’s become too dominant in the value chain. Traditionally, telecom operators do not only ‘own’ the access role, but also the distribution role. From their perspective, CDNs are free-riding on their networks by abusing the peering arrangements. CDNs are throwing a lot of traffic over the fence for free. ISPs fear being reduced to being just an access pipe, heavily competing for smaller and smaller margins. The CDNs make money (even though many are still loss-leaders) on delivery but the money does not flow towards the ISPs. Who cope with growing traffic volumes and are forced to massively invest in their infrastructure as a result.

The benefit for content owners to do business with ISP CDNs is to cut out the middle man. CDN costs theoretically should be lower when delivering on-net rather than through a global CDN. Doing direct business with ISPs also means more control over the last mile. The downside is that content owners may have to work with several ISP’s to get maximum coverage. I will write another topic to explain how we solve that.

Not invented here?
When ISP’s decide to build their own CDN, they of course see new challenges. They could start an internal R&D project. That is great for the techies in the company, but R&D costs are huge, time to market can take years and there is no guarantee for a successful outcome.

ISP’s are therefore looking for off the shelve CDN technologies. There are some options here:
Partially custom build
This means buying a network based CDN solutions, based on appliances. It requires the ISP to replace parts of their network (upgrade routers, switches), deploy expensive appliances on all edge sites and then develop their own management solution on top of that. This development can take 1-2 years but does not guarantee a flawless, full-featured and up to date CDN.

Black Box CDN
ISP’s could buy a black box solution from vendors who will deploy and operate the CDN for them. This is an expensive route as well, and the ISP has no direct control over the CDN: they depend on the vendor.

CDN tech licensing
In this scenario the ISP does not have to buy expensive equipment, but uses generic hardware (HP, IBM, Dell running a mix of Linux or Windows) to deploy delivery and CDN management servers. They buy a software CDN solution that they can deploy themselves, with support of the vendor or a system integrator. The network does not need to change and there is no dependency on specific DNS systems, storage solutions or load balancers. The benefit is that a software based CDN can be operational within a few weeks, there are no enormous upfront investments and the operator has complete control over architecture, deployment and operations.

Read more http://jet-stream.nl/blog/2009/08/why-are-telecom-operators-deploying-cdns/

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