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Making CDN Deployment Affordable Through Shared Capacity

The emergence of cloud- or remotely based storage and signal processing services has allowed a wide variety of companies to become instant bandwidth providers that enable end-users like Apple, Netflix, Google and others to deploy cost-effective content distribution networks (CDN) with little capital expense. And, to the chagrin of terrestrial broadcasters in the U.S., more and more companies are doing it all the time.

“The ability for enterprises to take advantage of the cloud has opened up the floodgates for CDN providers, because it is much easier for organizations to build big, dynamic applications that include all sorts of media,” said Kosten Metreweli, Chief Marketing Officer at OnApp, itself a CDN supplier that develops cloud and CDN technology for service providers. The company maintains offices in the UK, Malaysia, Ukraine and Logan, Utah. “As more and more content becomes available to consumers, it has increased the demand for CDN services significantly.”

Recognizing this growing need while also understanding that its own clients often have unused capacity that they are forced to pay for—and that content owners want to deploy new services cost-effectively—OnApp has devised a creative match-making strategy. The company is helping its existing cloud clients generate new revenue from unused bandwidth, while enabling them to create new CDN services by combining their own capacity with that offered by more than 400 other OnApp clients.

With cloud provider clients in 34 countries, all of which have spare capacity in their infrastructure, OnApp has figured out a way for these providers to offer global CDN services without having to build out any infrastructure themselves. The value for providers is being able to create a new revenue stream from CDN services and reselling spare capacity, while content owners get cheaper, more global CDN services – because no single provider foots the bill for the whole global network. OnApp supplies the bandwidth management software to make it all work.

Any of OnApp’s existing customers can simply press a button on their OnApp software interface and make it known to the network that it has extra bandwidth to sell. That client then sets their own price for it, depending upon where the bandwidth is located and the amount of gigabytes used. (For example, a point of presence (PoP) in the Asia Pacific region is more expensive than one in Western Europe or North America, due to market forces). OnApp serves as the broker between the two parties, managing the data traffic as well as the financial transaction.

“There are a number of established players in the CDN marketplace [Akamai, Limelight, Level 3, etc.], but they don't always offer individualized service, instead more of a 'one-size-fits-all' strategy,” said Kosten Metreweli, Chief Marketing Officer at OnApp. “Content owners are looking for a bit more innovation and a better price structure. Not everyone needs all of the bells and whistles of some of these established players. Frankly, they have been the only game in town until very recently.”

Utilizing the cloud to reach into distant markets is a key part of many media companies’ strategies. It’s gotten to the point where media companies have to have an online presence, whether it be static contribution, rich media, or separate audio and video services. So, the need to distribute content close to the user and indeed put the computer closer to the user is becoming more important.

Because OnApp works with 400 service providers (with over 90 PoPs in 34 countries), it has a lot of flexibility in where its CDN technology can be used to offer service, and a lot of bandwidth to create that service. “Over time we’re going to be able to reach into remote geographies that other CDN providers won't or can't hit,” Metreweli said. “One of the reasons we’ve jumped into the CDN market is that end-users and service providers are not getting what they need. We’re giving them exactly what they want: more functionality at a better price point.”

OnApp was founded as a spin-off of cloud hosting company UK2 three years ago. The software they make helps users create and manage a range of cloud-based services. Offering a shared-capacity (or “federated”) CDN was another value-added service they developed.

Metreweli said OnApp’s CDN platform can create a CDN that covers wide areas or only the specific regions your company wants to hit, as opposed to having to subsidize someone else using the same wide-area CDN. And they can do it in a matter of days with no significant equipment costs. The company recently set up a new network in South America within two days after the required contracts were signed. The new client company was happy to be serving a new market so quickly and easily while an OnApp customer in Brazil was able to receive an unexpected check for bandwidth he wasn’t using. Basically everybody won.

“[The plan] gives end users and service providers the flexibility to build very customized CDN offerings that really cover the geographies that are important to their end users,” he said. “And we’re able to offer this at really good price points because we’re piggybacking off of other people’s bandwidth and using capacity that otherwise would be sitting there doing nothing at all.”

It also means that, with little infrastructure costs, OnApp can reach into areas that a larger CDN provider might not want to invest in (due to the high infrastructure investment and low usage in certain parts of the world).

“We don't have to think like that,” Metreweli said. “And we’re opening up regions to more people and democratizing the cloud.”

Metreweli said that if a local TV station in the U.S. wanted to distribute content globally, it could subscribe to the OnApp CDN and work with an existing OnApp service provider in their region. For example, North American hosting companies Peer1 and Blacknight are OnApp clients. Through its “federated” CDN platform, OnApp gives companies and service providers instantaneous access to a global infrastructure of PoPs.

OnApp does not currently offer video streaming and multiple levels of encoding, but there are plans to add the capability within a month or so.