Apple Data Center May Reduce Use of CDNs
August 19th, 2009 By: Rich Miller
One more item on the potential implications of Apple’s new data center in North Carolina. Dan Rayburn has an important post on how Apple’s data center buildout may affect its extensive use of content delivery networks Akamai Technologies (AKAM) and Limelight Networks (LLNW).
“Folks I have spoken to inside Apple told me that once the new data center is completed, Apple plans to have a more active role in doing their own content delivery,” Dan writes. “While this won’t be happening anytime soon, since the data center won’t even be completed this year, it does indicate that over time, third party CDNs like Akamai and Limelight could very well lose a large portion of Apple’s business. While it’s way to early to speculate what kind of content Apple will deliver and in what volume, this strategy is nearly identical to what we’ve seen Microsoft do over the years.”
This is more reasonable by far than the “Apple getting into the cloud to compete with Google” speculation earlier in the week. Apple is a huge player in content distribution through iTunes. I imagine from running their Newark CA facility, they have gathered all the data they need to design their next facility. When offered a green field now, with costs being relatively low in the current economy, and Apple flush with plenty of cash, why not go big? Better to build a “big ass” facility (to use your terminology Rich) with room to grow than repeat what Dilbert’s company did.
Apple is a smart company, and this is how smart companies behave.
When they start doing this a dozen times in locations around the planet I’ll start to listen to the cloud/google/world domination chatter.
There are several interesting differences between Apple’s data center plans and others that have used additional infrastructure to reduce their CDN costs/usage. Microsoft slashed its use of CDNs by building an Edge Content Network with assistance from Limelight Networks and as many as 99 nodes around the globe. MySpace/Fox added peering capabilities by taking additional space in a highly-connected Equinix.facility in LA.
I’m not sure that an Apple facility in western North Carolina provides the same CDN reduction capabilities as either of those approaches, but it’s possible that Apple’ may have much more deployment of in-house infrastructure in the pipeline. As you note, Apple has lots of cash and can invest in Infrastructure as a competitive advantage if it sees an opportunity.
One thing’s for sure: Whether for cloud or CDN management, Apple’s infrastructure plans bear watching.
[...] I still wonder about Apple though. Everyone said they wouldn’t approve Spotify. It’s an iPod killer, who would use the iTunes store instead of this? The fact they approved it seemed to be at a time when the FCC investigation into Apple, Google and AT&T was underway. This was a different Apple. A changing Apple. I wonder if it is changing, and that they too will have a streaming option available in iTunes 9 and a future iPhone upgrade. If they did then the appearance of Spotify would make a lot more sense. Apple needs to do something with their new datacentre. [...]