ChinaCache's Ambition: 60% Chinese Network Content, 10% of Worldwide CDN Market

Have you ever heard of ChinaCache? Me neither. But apparently it's the largest player in the Chinese CDN market. In fact, the company holds the only CDN license from the Ministry of Information.

Earlier this week, ChinaCache announced that it now has a 100Gpbs network capacity. As a point of (apples to oranges) comparison, Akamai says it routinely delivers 200Gpbs of content (actual usage, not total capacity), which represents 10-20% of all web traffic.

ChinaCache was founded in 1998 by husband and wife team Song Wang and Jean Kou. After reading about Dr. Tom Leighton's MIT research on the concept of content distribution networks, they decided to build a Chinese CDN. (Leighton and his research team launched Akamai in fall 1998.) Its service went live in 2000. According to Finance Asia, the company became profitable in 2003.

Based on media coverage over the years, ChinaCache grew from 20 nodes (I assume they mean points of presence rather than individual servers?) in 2002 to 45 in 2004, 70 in mid-2006, and over 80 today in 40 major Chinese cities. It has about 100 customers, including western multinationals (BMW, Nokia, Sony), Chinese Web 2.0 and ecommerce companies, and just about every government agency. According to this September 2005 Powerpoint presentation, the company's "CDN 2.0 for Web 2.0" (sorry - article is in Chinese) service incorporates P2P technology.

Also in 2005, the company received $8.5 million in VC funding (so little?!) from Intel Capital, among others. Its founders say they plan to expand beyond China - not to compete with non-Chinese CDNs, but to serve overseas viewers who are interested in Chinese content, and Chinese companies who operate overseas. They expect to capture 10% of the worldwide CDN market and carry 60% of network content in China to 99% of the country's Internet users. Its long term plans are to go public on the NASDAQ.

A couple of weeks ago, the Associated Press reported that there are now 132 million Chinese Internet users, up 30% from a year ago. If this growth rate continues, CNet says China will have the world's largest Internet population by 2008. As such, the Chinese CDN market - of which ChinaCache holds more than 75% (Chinese) is worth paying close attention to.

BTW, before Akamai snapped up Speedera in 2005, Speedera partnered with ChinaCache on a live streaming event that delivered a peak load of 12Gpbs. Might it make sense for Akamai to continue developing this relationship - or simply acquire ChinaCache?

PS - 100Gbps sounds great and all, but ChinaCache's website is still barely accessible in the US. Its pages load soooo slowly! If Wang and Kou want to help their customers reach overseas viewers, more points of presence outside China (it has "several") really are a must.