Ditlev Bredahl, CEO of OnApp, tells DCM how it is revolutionising the Content Delivery Network market by using spare cloud capacity in data centres around the world to create a federated CDN platform, leading to CDN services anyone can afford. The £2.6bn CDN market has been in the grip of a handful of vendors for many years. The top three vendors own about 75% of the market, and new competition is scarce. This is not surprising, as the investment costs of building global CDN infrastructure can easily run to tens of millions of dollars.

A more important impact of this CDN monopoly is that prices have remained artificially high. The major CDN players are recouping the cost of running a network of global data centres, which prices CDN services out of reach of the SME and SoHo market that would actually benefit most.

At HostingCon in San Diego this month we launched OnApp CDN, a fresh approach which changes all this. It’s a federated CDN platform that uses spare cloud capacity in data centres all over the world to deliver high-performance CDN services. As well as disrupting the current high price of CDN services for end users, our CDN will also create new revenue streams for service providers by monetising spare data centre capacity.

Monetising idle data centre capacity
Idle capacity is necessary in a true cloud hosting setup. In order for a cloud to be a cloud you need to leave something like 10 or 20% capacity free to cope with spikes in usage, and failover for individual servers in the cloud. In some clouds there can be as much as 40% resources sitting idle.

For data centre-based businesses in hosting and cloud services, this hardware is a sunk cost – and,  a perfect source of CDN capacity. The OnApp CDN uses these idle resources to create local CDN Points of Presence (PoPs) from which content can be served to end users. We provide a marketplace where service providers can pick and choose from all of the PoPs in the system, in order to create the CDN service they need.

The providers who own or rent the capacity can resell it through the marketplace. If their resources are needed for cloud or other services, the CDN releases it and content is served from another local PoP instead. Marketplace transactions are handled automatically, service providers set their own prices and pay a small fee for transactions flowing through the marketplace.
This solves two problems. It creates a new revenue stream for service providers, by monetising spare capacity, and provides an immediate source of CDN PoPs at data centres around the world.  

Providing additional Data Centre services to customers
This federated model enables hosts, data centre owners and other service providers to bring CDN services to customers at a much lower cost than incumbent CDN vendors – because each member of the federation doesn’t have to recover the cost of running an entire global network.

At the same time, it will give small business customers a viable way to use CDN services without having to break the bank. Their CDN service can be provided by the hosts they already use – typically local providers who know their customers’ business and provide the support and SLAs they need.

The OnApp CDN platform supports HTTP push, HTTP pull, and streaming/live streaming of online content. At launch we had a network of 40 PoPs in place across the US, Europe and Asia, and we expect this number to grow to 100 or more this year.