Commoditized CDN offerings sprout

Still, the market for low-end CDN offerings appears to be growing. This week Voxel, a managed hosting provider that began offering CDN services early last year, announced it would combine its CDN and hosting services into one singularly billed service, hailing it as an end to “premium prices” for CDN. The offering—which doesn’t include the same functionality as Akamai’s and Limelight’s -- is particularly aimed at simplifying things for customers who may not know how much CDN they need, Voxel said.

Last year, Level 3 Communications made a similar move, announcing it would offer CDN service at a cheaper rate than IP transit services for its existing IP transit customers.

Combining CDN with other services, whether managed hosting or IP transit, might make a compelling offering, but providers must take care not to slouch on either service, as InterNap found out this year. Focusing on CDN after its 2006 acquisition of VitalStream, InterNap’s executives say the company neglected its IP transit business and lost customers as a result.

“We took our eye off the ball on the IP business,” James DeBlasio, InterNap’s chief executive officer, said at an investor conference this week.

“We had a number of large customers looking to be repriced, and we let them stay in month-to-month agreements. We were not proactive with them and suffered churn as a result in the first quarter…Now we’re back on track.”

InterNap also white-labels its CDN offering to customers such as Reliance Communications, again echoing the commoditization trend.

Though the growing number of players in the rapidly changing CDN space may draw more customers into the market, it likely will do little to bring clarity to the sector in the near term.

“Everybody wants to get into the CDN business, though they have no clear-cut business model,” Rayburn said. “There’s way too much hype and garbage in the market.”