CDNs continue to get cheaper

Dan Rayburn has posted his quarterly CDN pricing update. It’s always interesting reading for me, compared to what I see out of Gartner client contracts. I’m somewhat bemused that he finds 250 TB a month to be an “average” customer; the overwhelming majority of CDN customers are below the 100 TB mark, and customers are getting smaller and smaller as prices drop and minimum commits decline, and enterprises revamp their websites with rich media and exhibit often-irrational fears about hosting video themselves. I have an awful lot of enterprise clients doing below 2 TB of delivery. But certainly prices are dropping across the board, although it’s really only at the higher volumes that the price drops have been murderous.

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Posted on October 3, 2008, in Infrastructure and tagged . Bookmark the permalink. 2 Comments.

  1. Hi Lydia, most of the CDNs today are getting the vast majority of their CDN revenue from media and broadcast content owners, who have a lot more traffic than enterprise. Most CDNs don’t even sell into the enterprise market at all, with only one or two exceptions. Also, the bitrate of entertainment based content is higher than enterprise, usually by almost double, which means that they push even more bits just in terms of file size alone.

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  2. I would agree that the megadeals have become where the bulk of the revenue is now coming from, but overwhelming majority of customers (by “logo”) are relatively small, and they pay vastly more per byte. The newer CDN startups ignore the enterprise market not because it’s unimportant, but because they have very little to offer other than bits delivered at a cheap price. So they’re going with what they can do, and the bulk-video market is growing so quickly that they can afford to do it, but as a percentage of the total number of CDN customers, the megacustomers are a relatively small fraction.

    Many of the start-ups that are currently high-volume customers (almost certainly video-centric) have dubious business plans and a highly limited revenue stream. At some point in time, their venture capital cash will run out. CDN startups that depend nearly-solely upon these customers are going to meet grim fates at that point.

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