The CDN space has gone through a lot of turmoil, hot as a pistol for five or six years with big investments driving the creation of content delivery network companies and the inevitable shakeout that squeezed numbers significantly.
A new raft of VC-backed companies have begun to stake claims again, following the massive move toward enterprise video, live streaming and a seemingly endless parade of UGC in the past couple of years. comScore says that in September, nearly 85% of the total U.S. Internet audience watched online video, and the average online viewer watched 9.8 hours of video. Still, the industry remains unsettled, facing some of the same problems that purged it previously.
One player that’s gone through that boom and bust cycle, a cycle that nearly pushed it off the CDN stage, is diving back into the business with a passion and a new product.
In 2007, Internap Network Services took what turned out to be a decidedly icy plunge into CDN waters, paying some $217 million for VitalStream. It quickly discovered the company’s technology wasn’t good enough, taking big write-downs of nearly $150 million since.
Internap’s back with a more focused product offering, looking to improve its functionality and position itself as a strong provider of services for enterprises.
Senior VP of marketing Peter Evans told me Internap’s made a number of significant product improvements, including automating transcoding of video uploads that formats them for use across the Internet, a “set and forget” feature he thinks will pay dividends.
“We’ve been nose down for the past several months, reworking our technology, and we think we’ve created a platform that is very extensible and adaptable,” Evans said.
The biggest improvement that came out of the past few months may be Internap’s MIRO CDN -- its Managed Internet Route Optimizer. Internap says it’s the industry’s only route-optimized CDN, differing from traditional Internet routing in that it measures network variables like latency, congestion and downtime to determine the best path for traffic.
Evans thinks the technology could help Internap move to a stronger position in the CDN hierarchy because it’s adaptable, recognizing that at any one time, no single Internet provider is the “best” option to move data. The current technology, Border Gateway Protocol (BGP), said Amar Kahn, director of product management, looks for the least number of hops when transmitting data. “That’s like planning to drive to O’Hare airport based on the least number of roads you take instead of looking at what kind of roads you’ll be on, whether there is construction and what the speed limit is,” he said. “It just doesn’t make sense.”
Internap posits that a single Internet carrier is the best route for data transfer less often than 20% of the time, and contends that every same carrier may be the worst choice -- because of server problems, or other issues -- about 10% of the time. “In terms of availability that means a business might be sending data on a sub-optimal route 84% of the time,” he said.
So, if you’re an ecommerce site that’s tied to a CDN using BGP technology, some of your customers are going to end up twiddling their thumbs while waiting to connect to your website, and that translates into lost sales. If you’re an enterprise basing your reputation on hi-def video, you’re going to be delivering a product that’s jittery, or of uncertain quality. And, as consumers grow to expect TV-quality online video all the time, that can be a killer.
A demonstration of MIRO was, well, an eye-opener. Looking at data for Atlanta during a recent month, no provider was the “best” route more than 16% of the time. Nearly all of about a dozen top carriers had enough issues to rank them as the worst choice nearly 10% time. “If there was one best provider, we’d fold up shop and say ‘go with them,’ but that isn’t the case,” said Kahn. “What we do -- and we're the only provider that does this -- is take a large blend of the premium providers and layer them for the best result. We leverage the strength of every provider and, using our technology, avoid their weaknesses. There is always more than one good option.”
Kahn says MIRO data constantly is being updated, proactively creating maps of the Internet and determining the best performance available. “It’s dynamic and real time,” he said. “We can detect problems in about 90 seconds typically, and we can correct for it, patch it, and move traffic someplace else. We own the market for that; no one else leverages this routing. Realistically, calculating the number of miles data needs to travel and basing your routing on that number is not an acceptable proxy for performance.”
The big question for Internap is going to be whether they’ll be able to get their service in front of enough decision-makers to make it profitable.
Evans -- who joined Internap in August -- is the leading edge of a push to rebuild the company’s CDN sales organization through recruitment and training of a sales team that CEO Eric Cooney called out earlier this month, during the company’s third-quarter earnings call. Cooney, at that time, also announced Internap would make brand awareness a focus as it rolled out the new CDN platform.
“We believe our solution is the most elegant in the marketplace,” Evans said. “With people moving to cloud computing and all of the video that’s moving, we think there’s a huge market here.”
Evans said the he expects MIRO to drive a strong uptick in sales over the next several quarters. MIRO was unveiled at Streaming Media West last week and the sales force is just starting to hit the road and demonstrate its capabilities.
Said Khan about his experience on a recent sales call during which he rolled out the MIRO demo: “When I finished the presentation the customer said, ‘So, did you guys bring me an order to sign?’ Next time, I will.”
Last week, I wrote about how the OVP space was full of innovation and burgeoning technology. Looks like the CDN space may not be far behind. Got a story? Send it along.-Jim