Content Delivery Networks Are Hiring

The list of companies laying off staff gets longer every day. But one industry is hiring like mad: content delivery networks. Dan Rayburn at The Business of Online Video lists 23 different CDNs trying to fill more than 200 open positions. Akamai Technologies (AKAM) has 58 job listings, while BitGravity has 25 and  Limelight Networks (LLNW) has 14, If you’re looking for work, check out the list, which has links to each company’s job site.

The data center industry is hiring as well. There are 10 new job listings at our Data Center Jobs Board. If you’re hiring, you can list your company’s job openings there.

Microsoft’s CDN Analysis: Akamai vs. Limelight

Could an additional five data center locations level the playing field between content delivery network (CDN) market leader Akamai Technologies and its leading rival, Limelight Networks? That’s the intriguing question raised by researchers at Microsoft, who have published a detailed analysis of the two companies’ delivery networks (link via Dan Rayburn).

Microsoft found small performance differences between the two CDN providers in North America, but a “big gap in performance” in Europe and Asia, where Akamai has more data centers than Limelight. The researchers identified 27,000 content servers in Akamai’s global network, compared to just 4,100 for Limelight. But the Microsoft researchers suggested that the gap between the two isn’t nearly as vast as those numbers might suggest.

“By learning from Akamai’s existing deployment, a few more data centers can dramatically reduce the delay and make Limelight on par with Akamai,” they wrote. “For instance, 5 more data centers can reduce the delay to about 10% of Akamai and 9 more is enough to match Akamai.”

Limelight Reworks Software for Microsoft CDN

Limelight Networks’ loss to rival Akamai in a patent lawsuit has forced Limelight to rewrite the content delivery network software it licensed to Microsoft Corp. In an SEC filing Friday, Limelight (LLNW) reported that it had amended its agreement with Microsoft (MSFT) to address a February jury verdict in which Limelight was ordered to pay Akami (AKAM) $45 million for infringing its patents. 

Microsoft is building its own content delivery network (CDN), with Limelight providing software and engineering support. The August 2007 agreement between the companies was updated on Oct. 1 to address the Akamai ruling. Here’s an excerpt from the SEC filing: 

Under the Agreement, (Limelight) agreed to license certain software to Microsoft. The Company has been involved in litigation in which a jury verdict has been rendered stating that the Company’s provision of content delivery network services to its customers infringes certain patent claims of Akamai Technologies, Inc. The Company has created or is creating a new version of its software, which the Company believes is or will be non-infringing. The Amendment provides for the implementation of a new version of the Company’s software within Microsoft’s infrastructure.

The brief filing does not indicate whether Limelight has completed the workaround. But it suggests that Microsoft is now satisfied that the software Limelight is providing will no longer infringe Akamai’s patents. If the revised software can support Limelight’s own network - which is not explicitly addressed in the filing - it could reduce the impact of the Akamai patent ruling on Limelight’s ongoing operations.

CDN Consolidation Could Be ‘Imminent’

Industry analysts who track the content delivery sector have been warning for months that the explosion of new companies in the sector would inevitably result in a consolidation. In May the list of CDN providers reached 50 companies, and Dan Rayburn predicted a shakeout would occur in the next 18 months.

It appears we won’t have to wait nearly that long. Ryan Lawler of Contentinople reports from Streaming Media West show that that deal rumors are flying:

There was clear talk of term sheets being passed about, which led one CDN exec at the show to quip, “Half the companies here are shopping themselves.” Another said that strategic talks between attendees dramatically could change the face of the conference in the next 12 months. “The big question, if you look around the room, is how many of these companies will be here next year,” he said.

But who will the buyers be? Market leader Akamai (AKAM) has often bought smaller rivals with promising technologies, and there’s been steady speculation that major telcos would buy up CDN providers.

What’s driving the sudden deal frenzy? One factor could be Amazon’s recent decision to launch its own CDN. As we noted at the time, Amazon’s entry into the CDN market is problematic for the newer players, and especially so for those positioned as a cheaper alternative to Akamai.

Amazon to Launch Content Delivery Network

Amazon Web Services is planning to launch a content delivery network, adding a name-brand low cost competitor to an already crowded sector. Amazon’s entry figures to be bad news for the many venture-backed CDN startups seeking to challenge market leaders Akamai (AKAM) and Limelight (LLNW).

Amazon said the new service “will provide a high performance method of distributing content to end users, giving your customers low latency and high data transfer rates when they access your objects.” There will be no minimum fees or commitments - a common practice for some CDNs - and users will pay only for what they use. The service will deliver files stored on Amazon’s S3 storage service.

“This is an important first step in expanding the cloud to give developers even more control over how their applications and their data are served by the cloud,” said Amazon CTO Werner Vogels, who said the service is in private beta but will be “widely available before the end of the year.”

The ‘Edge’ and CDN Performance

As competition heats up in the content delivery sector, some CDN providers are competing on price and others are emphasizing the strength of their infrastructure. Network architecture has emerged as a key talking point in conversations between CDNs and prospects, with some (notably Akamai) touting their “edge” infrastructure as an advantage over other providers with more centralized distribution.

Many customers want their content as near the “edge” as possible. But where exactly is the edge anyway? Dan Rayburn has an interesting post that discusses the many variables in CDN infrastructure and performance, including physical location, storage capacity, load balancing, DNS issues, cache fill data and more. Dan’s article and the accompanying comments make for interesting reading.

Readers in the content delivery sector will also want to check out Silicon Alley Insider’s lengthy Q&A with Akamai chief financial officer J.D. Sherman, who discusses traffic growth, compeititon and pricing in the CDN business. “We’re not building out data centers so we’re not making a long-term bet on the terabits of data we see coming,” said Sherman. “We’re making incremental investments and overlaying them over the public Internet. That allows us to be very flexible about where we put new capacity.”    

Update: the BBC, Akamai and Level 3

Yesterday we linked to a post from ThinkBroadband which reported that the BBC had switched the primary CDN provider for its iPlayer from Akamai to Level 3. Dan Rayburn updates and corrects the story, noting that the BBC continues to work with Akamai (AKAM) and has added Level 3 as a second CDN partner.

For more information, see the BBC’s post providing an explanation of its rationale for the change in its iPlayer delivery scheme, emphasizing the importance of H.264 video compression in its decision.

Is it a good reflection on Akamai that the BBC has added Level 3 for the H.264 business? No, but for Akamai it’s a far sight better than losing the entire iPlayer business, and we wanted to make sure we corrected that impression.

CDN Roundup: Limelight, Internap, BitGravity

It’s been a busy week in the content delivery network (CDN) business. Here’s a look at the latest headlines:

• Limelight Networks (LLNW) reported its second quarter earnings yesterday, with sales of $30.3 million, slightly above analyst expectations. See coverage from Eric Savitz at Barron’s and Silicon Alley Insider, which live-blogged the analyst call. Or see the full transcript of the call at Seeking Alpha.
• Internap Network Services (INAP) “may be approaching a moment of truth for its CDN business, which is struggling on a number of levels,” according to Contentinople, citing analysis from Colby Synesael at Merriman Curhan Ford.