Posted By Rich Miller On August 29, 2007 @ 9:55 am In Level 3 | Comments Disabled
I expect Level 3 will come to the market with an aggressive marketing campaign talking to competitive functionality and performance at a much lower price. And I don’t mean slightly lower, I mean less expensive by a wide margin. While that would not be a new tactic by a CDN, (remember iBEAM?) it is unique to Level 3 since they own the network and should be able to have lower costs than anyone else. While other CDNs in the past lowered pricing to essentially buy market share, none of them ever succeeded, as in the end, their costs caught up with them. If Level 3 is this aggressive, we’re going to have to wait to see what impact it has on the market and what tactics the other CDNs will deploy to combat Level 3. While we know that customers are not buying on price alone, and Level 3 still has to prove it has a good service, other CDNs will have to decide how to adjust to the shift in the market.Concerns about a CDN price war  have hurt the share prices of Akamai and Limelight (LLNW), the largest public companies in the CDN space.
Article printed from Data Center Knowledge: http://www.datacenterknowledge.com
URL to article: http://www.datacenterknowledge.com/archives/2007/08/29/level-3-may-raise-stakes-in-cdn-price-war/
URLs in this post:
 challenge from Level 3: http://www.datacenterknowledge.com/archives/2007/Aug/28/akamai_were_ready_for_hd_internet_video.html
 Dan Rayburn: http://blog.streamingmedia.com/the_business_of_online_vi/2007/08/will-level-3-un.html
 Level 3 launched its CDN: http://www.datacenterknowledge.com/archives/2007/May/11/level_3_readies_launch_of_cdn_network.html
 CDN price war: http://www.datacenterknowledge.com/archives/2007/Aug/07/concern_about_prospect_of_cdn_price_wars.html
 Rich Miller: http://www.datacenterknowledge.com/archives/author/richm/
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