Founded June 2011 by a group of Telecommunication Service Providers (TSPs), the Operator Carrier Exchange (OCX) connects their networks in an effort to compete directly against traditional CDN’s which boasts an extensive number of points of presence (POPs) globally. By connecting the networks, Telco CDN’s are creating a Federate CDN which is much more interesting for a provider willing to deliver content to the entire audience of the federation.
The Emergence of Telco CDN Federations
As a result of this collaboration, it is likely additional Telco CDN federations will appear in the near future. Federated CDN’s will grow through the enrollment of new service providers entering the group and contributing their network presence and subscribers to the many current users.
Jumping on the Bandwagon
Several years ago, many carriers were reporting to the public that they did not want to develop their own CDN’s because the market was too small. This was reiterated in 2009 and then at the beginning of 2010. However, within the past several quarters, carriers are now discussing how they have entered into the CDN business. There are currently over a dozen telecommunications organization around the world creating CDN’s.
These Telco’s include:
• France Telecom
• Telecom Italia
• Polska Telekom
The Internet consists of an exchange of traffic between networks via paid transit and settlement free peering, with paid-peering between the two. Collaboratively they make the Internet work even though they never worked individually. Therefore, this is equivalent to CDN’s only with more traffic. If the pipes between networks are large enough then accounting for the cost/benefit by each side can be viewed transparently.
Essentially, the industry does not want to experience a tiered system, financially-driven whose disagreements can result in a partition of federated groups. Also, members of each federated group do not wish to engage in relationships determined by power and exclusivity.
The best aspect of federated CDN’s is that it can create a platform for a multitude of business models and strategies that overcome the numerous limitations of today. Traditional CDN’s alone cannot overcome many of the obstacles set forth by today’s demand for streaming content and other resource-consuming technologies.
Types of Federated CDN Users
Federated CDN’s are the perfect solution for many types of groups such as CDN’s with fiber footprints, those with no fiber footprints by strong managed capabilities, large distributed CDN’s, companies who desire to provide a fast lane and those looking to manage costs. These groups all work better in a federated CDN than individually.
Model Ideas for OCX
The model for the newly developed OCX is still unknown. One such idea is that the carrier will have a direct relationship with the content owner and utilize it to access several other CDN’s to widen their footprint. Another model idea is where a group of carriers act as a broker for services of all companies in the exchange.
Regardless of the method of management, it is clear that carriers must have a bilateral agreement with one another because there will be so many different CDN’s interconnected and overlapping. The point of a federation is for each entity to work together and the OCX is no different. Rules and agreements must be implemented and enforced for the exchange to be successful.
Forecasting Long-term Growth
Of course this is easy to write on paper but carriers in the exchange must execute it properly for the group to succeed. Many experts have pointed out that initially the group will not be able to compete with traditional CDN’s in the short-term. However, over the long-term, the exchange will fare well as this is the direction in which the market is headed. This is the reason why CDN provider Akamai is in the process of developing a licensed CDN offering.
It appears as if all parties involved in the Federated Telco CDN would benefit from tightly integrating a CDN with the Internet through federated groups. Anytime resources and customers are merged, the entities involved emerge stronger than before. Although still in the conceptual phase, large scale adoption of the idea is right around the corner and simply awaiting standardization.