Dan Rayburn, Principal Analyst, Frost & Sullivan
At the Streaming Media West conference that is taking place this week, Frost & Sullivan principal analyst Dan Rayburn predicted that the $400 million content delivery network (CDN) market is ready for heavy consolidation. The main predators in this market of 60+ vendors are telecom companies AT&T and Level3 which decided to enter the fray in a big way and also have a large presence at the show. Akamai and Limelight Networks being the strongest contenders in the market with the higher potential to being swooped up.
“The real problem is that the market is not big enough to support all the vendors. In the past 18 months, the CDN players have raised $400 million for a $400 million market. That is not sustainable”, said Rayburn.
Rayburn sees the CDN market to reach $1 billion in 2010 at a rate of 30 to 40% growth. 64% of that market is coming from the U.S. versus 14% from Europe. And video is becoming the main driver for that growth, mostly short form videos, accounting for already 39% of all the traffic of the content networks.
In his report that will be published by the end of the year, Rayburn points to huge pricing discrepancy, making difficult for customers to compare CDNs, and slows adoption, and a lack of video standards for online video delivery (player, bitrate, codec, aspect ratio…). For that matter, Amazon recent push in the CDN market is a good thing as it will help educate the market.
“If Amazon is coming, it means it’s becoming a commodity”, added Rayburn.
