Daily Archives: October 21, 2008
Akamai expands its advertising solutions
Akamai made an advertising-related announcement today, introducing something it calls Advertising Decision Solutions, and stating that it has agreed to aquire acerno for $95 million in cash.
acerno (which seems to belong to the e.e. cummings school of brand naming) is a small retailer-focused advertising network, but the reason that Akamai acquired it is that they operate a data cooperative, wherein retailers share shopping data. This data in turn is used to create a predictive model — i.e., if a customer bought X, then it’s likely they will also be shopping for Y and Z and therefore you might want to show them related ads.
Although Akamai states they’ll continue to operate the acerno business, don’t expect them to really push that ad network; Akamai knows where its bread is buttered and isn’t going to risk competing with the established large ad networks, which number amongst Akamai’s most significant customers. Instead, Akamai intends to use the acerno data and its data cooperative model to enhance the advertising-related capabilities that it offers to its customers.
This complements the Advertising Decision Solutions announcement. Basically, it appears that Akamai is going to begin to exploit its treasure-trove of user behavior data, as well as take advantage of the fact that they deliver content on behalf of the publishers as well as the ad networks, and therefore are able to insert elements into the delivery, such as cookies (thus enabling communication between cooperating Akamai customers without those customers having to manually set up such cooperation with their various partners).
This expansion of Akamai’s product portfolio is a smart move. With the cost of delivery dropping through the floor, Akamai needs new, high-value, high-margin services to offer to customers, as well as services that tie customers more closely to Akamai, creating a stickiness that will make customers more reluctant to switch providers to obtain lower costs. Note, however, that Akamai already dominates the online retail space; the new service probably won’t make much of a difference in a retail customer’s decision about whether or not to purchase Akamai services. It will, however, help them defend and grow their ad network customers, and help them maintain a hold on core website delivery for the media and entertainment space. (This is true even in the face of video delivery moving to low-cost CDNs, since you don’t need to deliver the site and the video from the same CDN.)
I think this move signals that we’re going to see Akamai move into adjacent markets where it can leverage its distributed computing platform, its aggregated data (whether about users, content, systems, or networks), or its customer ecosystem. Because these kinds of services will tend to be decoupled from the actual price of bit delivery, they should also help Akamai broaden its revenue streams.
CDN overlays (and more on MediaMelon)
I was recently briefed by MediaMelon, a just-launched CDN offering a “video overlay network”. The implications of their technology are worth considering, even though I think the company itself is going to have a difficult road to travel. (MediaMelon has two customers thus far, and is angel-funded; it is entering an extremely tough, competitive market. I wish them luck, since their model essentially forces them to compete in the ever-more-cutthroat CDN price war, as their entire value proposition is tied up in lowering delivery costs.)
In brief, when a content provider publishes its video to MediaMelon, MediaMelon divides the video into small chunks, each of which is a separate file that can be delivered via HTTP, and relies upon the video player to re-assemble those chunks. This chunk-based delivery is conceptually identical to Move Networks streamlets. MediaMelon then publishes the content out to its CDN partners (currently Velocix plus an unannounced second partner). MediaMelon’s special sauce is that these chunks are then delivered via multiple sources. This is normally MediaMelon’s P2P network, with a fallback to MediaMelon’s CDN partners. Since the video is in chunks, the source can switch from chunk to chunk. The video player also reports its performance to MediaMelon’s servers, allowing MediaMelon to draw conclusions about how to serve content. As a delivery-focused company, MediaMelon has decided to leave the value-adds to its media platform partners, currently thePlatform.
Whatever the challenges of their business model, though, the overlay model is interesting, and from a broader market perspective, MediaMelon’s technology highlights several things about video player capabilities that should be kept in mind:
- You can carve up your video and let the player re-assemble it.
- You can deliver using multiple sources, including P2P.
- The player knows what kind of performance it’s getting, and can report it.
These three key things make it extremely clear that it is technically feasible to create a “neutral” CDN overlay network, without requiring the cooperation of the CDNs themselves. MediaMelon is halfway there. It just hasn’t put together all the pieces (the technical hurdles are actually nontrivial), and it is designed to work with partner CDNs rather than force them into competition.
Basically, what a (non-AnyCast) CDN like Akamai or Limelight does, is that they’ve got a central engine gathering network performance data, which it uses to choose an individual CDN server, based on what it believes best for you (where “you” is defined by where your nameserver is). That individual CDN server then delivers the content to you.
What an overlay would have is a central engine that gathers performance data directly from the video player, and has a list of sources for a given piece of content (where that list includes multiple CDNs and maybe a P2P network). Based on historical and currently-reported performance data, it would direct the player to the source that delivers acceptable performance for the least cost. Dividing the content into chunks makes this easier, but isn’t strictly necessary. What you’d effectively have is a CDN-of-CDNs, with the overlay needing to own no infrastructure other than the routing processor.
That is the next-generation CDN. If it were vendor-neutral, allowing the customer to choose whomever it wanted to work with, it would usher in an era of truly brutal price competition.
CloudPundit: Massive-Scale Computing 