Report: Content Delivery Networks Start Recovery in 2003

Feb 28, 2003

According to a new report from Probe Research, Inc. entitled "North American CDN Markets," the content delivery network (CDN) market will begin to regain revenues in 2003. At the same time, Probe expects that the line between CDNs and hosting will disappear as hosting providers offer more CDN-like services and CDN providers expand beyond basic content delivery. "North American CDN Markets" looks at the handful of players left in the space and forecasts overall revenues to 2007. The report predicts that the market, which grew about 10% in 2002, will grow more than 20% in 2003 and sustain reasonable growth thereafter. Two of the main players have already reached profitability, with a third close. Probe questions Akamai's ability to bounce back from falling revenues in 2002, and predicts a possible sale by the end of 2003. Enterprise CDNs (eCDNs), whether set up and maintained by the enterprise itself or offered as a service by CDN providers and other carriers, are expected to become increasingly widespread in 2003. Since high set-up costs may deter some enterprises from setting up these networks, service providers such as Akamai, Sprint, Qwest, Equant, and IBM have developed their own. According to Probe, no new players will emerge in 2003, and competition will come from other service providers moving into the space, in addition to hosting providers. Only a couple of players are expected to remain that offer plain CDN services, while others will fight it out based on content types supported, Web services, security services, and other edge services such as content transformation and optimization.