Aflexi has announced its launch, which is slated for January of 2009.

Aflexi is a CDN aggregator, targeting small Web hosters much in the same way that Velocix’s Metro product targets broadband providers. (What’s old is new again: remember Content Bridge and CDN peering, a hot idea back in 2001?)

Here’s how it works: Aflexi operates a marketplace and CDN routing infrastructure (i.e., the DNS-based brain servers that tell an end-user client what server to pull content from), plus has Linux-based CDN server software.

Web hosters can pay a nominal fee of $150 to register with Aflexi, granting them the right to deploy unlimited copies of Aflexi’s CDN server software. (Aflexi is recommending a minimum of a dual-core server with 4 GB of RAM and 20-30 GB of storage, for these cache servers. That is pretty much “any old hardware you have lying around.”) A hoster can put these servers wherever he likes, and is responsible for their connectivity and so forth. The Web hoster then registers his footprint, desired price for delivering a GB of traffic, and any content restrictions (like “no adult content”) on Aflexi’s marketplace portal.

Content owners can come to the portal to shop for CDN services. If they’re going through one of Aflexi’s hosting partners, they may be limited in their choices, at the hoster’s discretion. The content owner chooses which CDNs he wants to aggregate. Then, he can simply go live; Aflexi will serve his content only over the CDNs he’s chosen. Currently, the content routing is based upon the usual CDN performance metrics; Aflexi plans to offer price/performance routing late next year. Aflexi takes a royalty of 0.8 cents per GB (thus, under a penny); the remainder of the delivery fee goes to whatever hoster served a particular piece of content. Customers will typically be billed through their hoster; Aflexi integrates with the Parallels control panel (they’re packaging in the APS format).

Broadly, although the idea of aggregation isn’t new, the marketplace is an interesting take on it. This kind of federated model raises significant challenges in terms of business concerns — the ability to offer an SLA across a diversified base, and ensuring that content is not tampered with, are likely at the forefront of those concerns. Also, a $150 barrier to entry is essentially negligible, which means there will have to be some strenuous efforts to keep out bad actors in the ecosystem.

Aflexi sees the future of the CDN market as being hosters. I disagree, given that most hosters don’t own networks. However, I do believe that hosting and CDN are natural matches from a product standpoint, and that hosters need to have some form of CDN strategy. It’s clear that Aflexi wants to target small Web hosters and their small-business customers. They’re going to occupy a distinct niche, but I wonder how well that approach will hold up against Rackspace-plus-Limelight and Amazon’s CloudFront, which have solid credibility and are targeted at small customers. But the existence of Aflexi will offer small hosters a CDN option beyond pure resale.

Aflexi says its initial launch hosters will include ThePlanet. That in and of itself is an interesting tidbit, as ThePlanet (which is one of the largest providers of simple dedicated hosting in the world) currently resells EdgeCast.

One more odd little tidbit: The CEO is Whei Meng Wong, previously of UltraUnix, but also, apparently, previously of an interesting SpamHaus ROKSO record (designating a hoster who is a spam haven — willing to host the sites that spammers advertise). Assuming that it’s the same person, which it appears to be, that reputation could have significant effects upon Aflexi’s ability to attract legitimate customers — either hosters or content owners.

The company is funded through a Malaysian government grant. The CTO is Wai-Keen Woon; the VP of Engineering is Yuen-Chi Lian. Neither of them appears to have executive experience, or indeed, much experience period — the CTO’s Facebook profile says he’s an ’07 university graduate. The CEO’s blog seems to indicate he is also an ’07 graduate. So this is apparently a fresh-out-of-college group-of-buddies company — notably, without either a Sales or Marketing executive that they deemed worth mentioning in their launch presentation.

Bottom line, though: This is another example of CDN services moving up a level towards software overlays. The next generation of providers own software infrastructure and the CDN routing brain, but don’t deploy a bunch of servers and network capacity themselves.