When MySpace decided to use an in-house solution for delivering streaming video to its 75 million users, it was a blow to VitalStream, the content distribution network (CDN) and video delivery provider which relied on MySpace for a third of revenue. Within a week, VitalStream announced that it had been acquired by Internap for $217 million.
The winner in the MySpace technology shift was Equinix, whose peering capabilities were a major factor in the social networking hub's decision to lease space in the new Equinix data center in Los Angeles.
"MySpace's (video streaming) announcement was all about the value of peering in an Equinix facility," Peter Van Camp, CEO of Equinix, said in the company's recent analyst briefing. "MySpace wants to manage their own content distribution, so they are moving to more of a peering model in the way they deliver their content. By being in our data centers and next to all these other networks, they can get their content onto these downstream networks, which is really what the CDNs did for them."
Equinix operates interconnection facilities, which allow networks to make physical connections with one another to exchange traffic, known as peering.
"By offering a unique, network-rich environment with access to more than 200 networks, Equinix enables us to directly interconnect with the networks serving our end-users, providing a more streamlined path between content and users," said Aber Whitcomb, CTO of MySpace, when announcing the move into Equinix' LA site. "This model not only enhances our site performance, but also enables MySpace to peer with end-user networks and exchange traffic in a way that circumvents the traditional method where content providers were required to pay for transit to reach end-users."
Peering allows two providers exchanging large volumes of traffic to save money by connecting directly, rather than routing traffic through their paid Internet connections. Peering does not provide access to the entire Internet, only the other provider's customers. Peering is often free as long as the amount of traffic exchanged is not out of balance, providing substantial cost savings for bandwidth for high-traffic sites and networks.
An illustration: In recent months, MySpace and video hub YouTube have swapped an enormous amount of traffic, with each site sending between 6 and 7 million visitors a month to the other. Thus, a direct peering relationship between MySpace and Google (YouTube's new owner, and an Equinix customer) could in theory be cheap or even free, and thus less expensive than reaching those Google users through transit or a CDN.
While direct peering offers advantages over CDNs in some situations, MySpace's move is not likely a harbinger of doom for major CDNs like Akami, Limelight Networks or Cable & Wireless.
"All the major CDNs are customers in our major facilities as well, " said Equinix CEO Van Camp. "They can get you to networks that aren't across the (interconnection) room. That approach (using peering and CDNs) really gives the most coverage."