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CDN: Build or Buy?

Ray Le Maistre

9:10 AM -- Of the many difficult choices facing network operators today, the decision about whether to build or buy CDN (content delivery network) capabilities to deal with video and other bandwidth-hungry applications must be one of the toughest. (See Carriers Crave CDN Action.)

Buying CDN services from specialists such as Akamai Technologies Inc. (Nasdaq: AKAM), Limelight Networks Inc. (Nasdaq: LLNW), CDNetworks Co. Ltd. , Level 3 Communications Inc. (NYSE: LVLT) or OnApp Ltd. provides a ready-made solution managed by experienced companies, but that option can be costly and also limits the development of the operator's own revenue-generating CDN services.

So operators are increasingly incorporating CDN capabilities into their own networks not only to reduce their own costs but also to develop their own CDN services that can then be sold to enterprises and content owners.

Russia's Rostelecom is the latest to go down this route. With mobile now part of its services portfolio, the company is building out a next-generation wireless network and has awarded a sizeable radio access equipment contract to Ericsson AB (Nasdaq: ERIC). As part of the same deal, Ericsson is supplying Rostelecom with its Media Delivery Network solution, which includes distribution and delivery, caching, storing, streaming, transcoding and content management system (CMS) capabilities. (See Rostelecom Builds Out With Ericsson and Ericsson Unveils Media Delivery Net.)

Ericsson has significant in-house video distribution expertise courtesy of its Tandberg TV acquisition, but even that wasn't enough for the Swedish vendor: To give it the necessary smarts in the CDN world, it has forged a close partnership with Akamai, with which it has also been working to develop broader applications acceleration capabilities. (See Ericsson Intros Smart Cloud Accelerator, MWC 2011: Ericsson CEO on Akamai Deal and MWC 2011: Ericsson, Akamai Get Jiggy.)

Akamai has also created a special package for network operators that want to license its CDN technology. Akamai, then, sells services and technology direct to telcos and also has a partnership with the world's leading mobile infrastructure vendor -- that's called hedging your bets. (See Will Operators Embrace Akamai's Licensed CDN?)

There are plenty of other equipment firms ready to help the telcos develop their own CDN capabilities, including Alcatel-Lucent (NYSE: ALU), Cisco Systems Inc. (Nasdaq: CSCO), Dell Technologies (Nasdaq: DELL), Juniper Networks Inc. (NYSE: JNPR) and Motorola Mobility LLC , among others. (See Dell Gets Into the CDN Business, AlcaLu CEO Unveils New Vision, Juniper Adds to Its CDN Offering, Moto, EdgeCast Strike CDN Deal and CES: Cisco Unveils Master Plan for Video.)

There's no shortage of options for operators, then. The key, it seems, is figuring out the associated business plan first and then picking the most suitable solution. And if building a CDN looks to be the best way forward, the next key question would be -- will the operations team know how to run it?

For more on CDNs:

— Ray Le Maistre, International Managing Editor, Light Reading

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User Rank: Light Beer
12/5/2012 | 5:28:21 PM
re: CDN: Build or Buy?

For those service providers who choose to build their own content delivery networks, here are two white papers that may be of interest: 

<li>The 4 Keys to Telco CDN Success</li>
<li>5 Ways Operator CDNs Can Land More Customers</li>
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