CDN Market: $500M Now, $800M in 2008

Dan Rayburn estimates the size of the CDN market at $450 to $500 million for 2007, and growing to $800 million in 2008.

How big is the market for content delivery networks (CDNs)? How big will it get? Many securities analysts are trying to sort this out. Dan Rayburn of the Business of Video knows this sector well, and has laid out his estimate for the current and future size of the video CDN market.

Dan estimates the current market for outsourced delivery of video at $450 to $500 million, with Akamai (AKAM) accounting for about $300 million of that total, followed by Limelight Networks (LLNW) with $105 million and Internap (INAP) at $24 million. What about 2008?

Based on what I am seeing in contract terms, increased volume of bits, higher bitrates, etc... I expect to see the U.S. video delivery market grow to about $800 million for 2008. If you factor in the revenue for P2P delivery networks in the new year, that number could go up another $50 million.

That works out to 60 percent annual revenue growth for the CDN market. This would be great news for data center providers, as the content delivery networks are important tenants for companies like Equinix (EQIX), Switch and Data (SDXC). Read more on Dan's site.