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Apple Could Have Saved $15 Million if iTunes were P2P?

That's what this very funny blog post from RedS Swoosh says. I came across it through Read/Write Web, where Richard McManus points out that Mark Cuban of the Dallas Mavericks is a Red Swoosh investor.

Red Swoosh is a free P2P CDN. Content owners "swoosh" their content by adding "http://edn.redswoosh.net" in front of URLs. Visitors must install a desktop client in order to access swooshed data. Files are downloaded or streamed from up to 30 peers who previously requested the same content.

Johnny Cakes, Red Swoosh's probably non-existent "Downloader in Chief", read on the BBC that Apple has sold 1.5 billion songs and tens of millions of TV shows and movies through iTunes. He calculates that...

* 1.5 billion songs x 5 MB = 7,500 TB
* 25 million TV shows x 700 MB = 17,500 TB
* 25 million movies x 2 GB = 50,000 TB
* 75,000 TB x $200 per TB in Akamai bandwidth = $15 million, which Apple could use to:

* Buy the world a Coke
* Give away 100,000 iPhones
* Buy 3,750 Segways and a lifetime supply of hot dogs
* Buy Sealand

Red Swoosh is not the only P2P CDN. The New York University-operated CoralCDN is free as well (and doesn't require a desktop client); Fark, Slashdot and Digg are all occasional users. The Coral team has been collecting data on the distance between web users and their DNS resolvers to determine how efficient it is for CDNs to make IP-address-based matches between end users and cache servers.

There's also Metalink, an open standard that bundles P2P files AND HTTP/FTP files on multiple mirrors into one single format. If a server becomes inaccessible during a download, Metalinker will automatically switch to a different location. It's even able to download segments from different sources at the same time. OpenOffice and openSUSE (among many other applications) are available via Metalink.

If you have hosting customers who need more bandwidth than they can afford, work with them to evaluate these options instead of canceling their accounts. If enough high-bandwidth users start offering P2P content, it might buy you some time before you have to fire up the next batch of 10-GigEs.


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.


What Would the Head Surfer Do? Some Thoughts on Web Hosting in 2007

I've been reading "Why Not?", a book about innovation. One of its key concepts is to ask yourself what Croesus (the ancient rich king) would do. In other words, if you could throw unlimited amounts of money at a problem, what solution would you pick?

Web-hosting-wise (unless you're Google), maybe a more practical approach is to ask what Robert Marsh would do. As founder/Head Surfer of EV1, Robert single-handedly created the discount dedicated servers market. He also popularized complex hosting among EV1 customers by introducing private racks, and rolled out VPSes with a BIG party, complete with fireworks.

He blogged (sort of) before blogging was fashionable (by making a personal soapbox out of his customer forum). He saw potential in APC's Mobile Data Center before Sun made a splash with the Blackbox. He wanted to travel regularly to cities with high customer density - much like what Amazon Web Services evangelists are doing. And he put some work into developing a beyond-the-box hosting environment, which so many hosting companies began offering last year.

I've compiled a quick collection of facts and stats that I think will define web hosting in 2007. (If you're reading in RSS and the slides don't show, click here.) If Robert were still in the hosting business, what would he do in today's market?

Would he build his own S3? At least two Rackspace customers have traded their managed storage for Amazon's pay-per-GB solution - and just this morning my new friend Santosh asked which hosting companies offer S3-like shared storage. What should I tell him??

Might he take Tier 1 Research analyst Dan Golding's advice and snap up a start-up CDN? Buy a shipyard and offer container colo for Sun Blackbox owners?

He'd have another Birthday Bash, that's for sure. Or several parties in different cities - he'd drive his mobile data center right up to the entrance of not just HostingCon, but Salesforce.com's and VMWare's user conferences. Did you know that 7000+ people attend each? And they work for companies that could become your customers!

The most interesting figure (on slide #18), BTW, comes from Vlad Miloushev of 3tera. Vlad thinks up to 90% of web servers are hosted in-house. Robert wanted to go after this market with not just private racks, but private suites.

What else? Who knows. If I were you, I'd take the guy to Fleming's the next time you're in Houston. He might have some insights for you!


Mirror Image: "We're Absolutely Not Shutting Any Doors"

I learned a few things about Mirror Image today. Founded in 1999, it's one of the few dotcom era CDNs to have survived the bubble. 2006 has been the company's best year ever: 45% growth, contracts with major government agencies such as the Department of Defense and Center for Disease Control, great relationships with happy customers including Amazon, the New York Times, the Home Shopping Network.

VP Sales & Marketing Jim Hart (an old timer who's been with the company since 2001) tells me that Mirror Image maintains Content Access Points (CAP) in 23 major Internet exchange points around the globe. Jim says the CAP model is more efficient than Akamai's Edge Platform because with smaller pools of servers deployed across 71 countries, Akamai has less capacity for maintaining local copies of customer content. As a result, Mirror Image delivers a 98% cache-hit ratio (98% of end user requests are served from cache, rather than retrieved from content owners' home servers), versus Akamai's ~75%.

In addition to Akamai, Jim sees Limelight and VitalStream as major competitors. He hasn't run into CacheFly or BitGravity at all, and while he isn't worried about VeriSign's Kontiki either, he's "looking into P2P-related opportunities".

Is Mirror Image interested in partnering with hosting companies? Jim says of course - he's established ongoing relationships with "many best of breed providers". Such as Savvis, now that it's sold its own CDN? Jim says no comment. What about a CDN/web host merger, which Dan Golding from Tier 1 Research is rooting for? Jim says he's "absolutely not shutting any doors".

The first thought that crossed my mind was, maybe GI Partners could acquire Mirror Image and merge it with ThePlanet-EV1Servers? (I'd recommend choosing a name in advance to avoid the possibility of triple hyphenation.) But on second thought, TP-EV1's mostly unmanaged (at least for now) service might not be synergistic with Mirror Image's "Global 2000" user base.

Rackspace, on the other hand, might be a good match. In addition to the Fanatical Support it's known for, the company also seems popular among well-funded video startups. Once merged with Mirror Image, the combined entity could go public at CDN valuations! (Akamai trades at 18x annualized sales, versus Savvis' 2.4x.)

Or maybe Jim should leverage his successful, fast growing partnership with Amazon to offer global content distribution for data stored on S3?

Not that Mirror Image has any difficulty getting business. Jim says the content delivery market is WIDE open; at least 50% of the company's new signups come from first-time CDN users. Don't you wish the situation were the same in hosting?


Level 3 Buys Savvis CDN; Does Deal Signify Fork in Hosting Market?

Rich Miller at Data Center Knowledge reports that (a) Level 3 will acquire Savvis' CDN business for $135 million, and (b) Savvis plans to build 4 new data centers in 2007. The new Atlanta, NYC, DC and Santa Clara facilities will add 180,000 square feet of space, boosting Savvis' total inventory to 1.5 million square feet.

Level 3's Kevin O'Hara says the CDN deal will help the company pursue opportunities related to "rich media applications such as video, Web 2.0, multiplayer online gaming and software as a service".

Savvis' Phil Koen says its new data centers will be "designed to exacting standards for security and reliability, power availability, cooling, network connectivity and environmental controls". The company is "focused on delivering IT infrastructure as a service" and will used the space to provide managed hosting, colocation and virtualized utility computing.

Read side by side, Kevin's and Phil's statements seem to indicate that there's an upcoming fork in the web hosting market? Some providers (such as Level 3) will focus on high traffic, public-facing apps. Others (such as Savvis) will specialize in extending enterprise customers' IT capabilities (ie hosting internal apps for a tightly controlled and highly localized user base). And the two paths are apparently mutually exclusive?

Savvis' shares (blue) are up by 227% this year, BTW, while Level 3 (red) gained 94%. (I love Google Finance!) Will LVLT catch up with SVVS as SaaS gains momentum and online video takes off? More importantly, should other hosting providers worry about choosing sides?

ThePlanet, in particular, has no presence outside of Texas, but new(ish) CEO Doug Erwin expressed online video aspirations in an interview with TheWHIR. The company also maintains a game hosting division. Will its highly localized footprint make it particularly vulnerable to competition from mass market CDNs such as CacheFly?


VeriSign to Expand into New Market, Offers Family Friendly Movies?

Just came across this Associated Press news release, which claims VeriSign will "start distributing family friendly movies from AxiomTV early next year". Can you believe it?

As it turns out, the AP story was slightly misleading. The movie download service will actually be offered by VeriSign customer Axiom.TV. On Jan 8, Axiom will launch "the world's first family friendly and parental controlled Internet TV channel". Its "military-grade web-blocking technology" will protect viewers from porn, violence and vulgarity.

What VeriSign will offer is its Kontiki P2P content delivery service. The company says with P2P, content owners enjoy cost savings of approx 40%.

Since I hadn't heard of Kontiki before, I did a bit of quick research and found that the technology comes from a VeriSign subsidiary. Founded in 2001 by Netscape alums, Kontiki raised $42.6 million throughout the years before its $62 million acquisition by VeriSign in March 2006.

Amazon, eBay, Sony, McAfee, Ernst & Young and the Sundance Festival were all early customers. It currently powers video delivery for Adobe, Nextel, TimeWarner and CNet. What I found most intriguing was this 2002 press release about its grid delivery server software: "Kontiki's customers have created their own grids to deliver business video on demand to their sales force, channel partners, employees and customers."

When I first came across CoralCDN this summer, I thought P2P content delivery was a pretty new idea. Little did I know that the technology - as well as Kontiki's vision of delivering TV-quality video - has been around for ages! Coral's still pretty cool, though. Digg, Fark, Slashdot and a long list of other sites all use its free service.


"Stop Hosting, Start Delivering"

After reading this VentureBeat post about BitGravity, a new CDN, I was curious to find out more about the company. CEO Perry Wu promises "no latency" in online video delivery; Revision3 (a "TV network for the web" launched by the founders of Digg) and TomGreen.com are customers, along with some "bigger names in publishing".

I wasn't able to find much additional information. BitGravity's website is vague about its technology infrastructure ("innovative routing, hardware , and file system"; "centralized architecture, constellation system, multiple bandwidth providers") and pricing ("no armies of network people, many standard features that others charge you extra for"). Media coverage is limited to this CNET article, which says the company is already profitable.

On the other hand, I did learn something about CacheFly through MochiMedia co-founder Bob Ippolito's blog. (Bob already considers BitGravity a "tier 1" CDN, BTW.) MochiMedia needed to serve large amounts of small content objects to a global audience. First Bob tried Amazon's S3, but he discovered during a trip to Taipei that its performance was "horrifying" (HTTP request for 20KB file took 1.6 seconds)(download times from Taipei tend to be awful for content hosted at most North American data centers). CacheFly was 3x faster, and Bob was pleased with the company's transparent and affordable pricing.

By the way, during the CDN panel at the Tier 1 hosting summit back in September, execs from Akamai, Limelight, SolidState and Netli affirmed that they see hosting providers as valued partners. Cachefly has a different take. Its demo urges viewers to "Stop Hosting... Start Delivering". BitGravity, too, argues that CDNs help customers save money through "better purchasing power and higher utilization" of their network and the equipment. CNet says these two start-ups are challenging Akamai, but it sounds like they've got much more in mind.


If CDN and Hosting Belong Together, What's With These Savvis Rumors?

At 's Hosting Transformation Summit back in September, Akamai, Limeline, Netli and Solid State each attested that they enjoy close working relationships with their hosting partners. Tier 1 analyst Dan Golding suggested ongoing cooperation is so important that CDN-web host M&A deals might not be such a bad idea.

So how come is (supposedly) looking to sell off its CDN business?

While Dan argued that web hosts who don't have a worldwide footprint need to help site owners reach far flung visitors through CDN partnerships, Om Malik says the two businesses are at odds: one makes money when people buy bandwidth, and the other reduces bandwidth usage. Which do you agree with?

By the way, Savvis' CDN business, which has 91 employees and 60 clusters in 29 countries, generates $40 million in sales, and is supposedly priced over $100 million.

 
 

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