5 Ways Operator CDNs Can Land More Customers

Introduction

Big changes are afoot in content delivery, perhaps none so important as the emergence of telecom service providers as content delivery network operators — also known as operator CDNs or Telco CDNs.

Over 40 operator CDNs have now been deployed or are in development*, lured by the prospects of greatly reduced transit costs and new revenue streams.

But building out the CDN infrastructure is just the beginning. To be successful, operators must court and persuade content owners to become customers; not an easy proposition in a market saturated with established CDN alternatives.

With this white paper, we will spotlight the five essential success factors necessary for Telco CDNs to win new customers and begin the process of validating their competitive advantages.

* source: Informa Research

1

1. Demonstrate your CDN’s reliability and quality

If you’ve got it, flaunt it.

Operator CDNs have significant advantages over legacy content delivery networks. For one, owning your network enables you to cluster points of presence (PoPs) closer to the end user than third party CDNs can offer. Which means that you should be able to deliver superior quality of service (QoS) over the likes of Akamai and Limelight Networks.

Prospective customers aren’t going to take your word for it, however. You’ll need to demonstrate your ability to provide measurably better QoS.

If you are a service provider that also operates an IPTV or OTT service, by all means, start to deliver that online video content over your own Telco CDN as soon as possible. Doing so will benefit you in two ways:

• It will demonstrate the faith that your company and its subsidiaries have in the new content delivery network; the proverbial “eating your own dog food.”

• It will also provide an opportunity to work out any kinks in the service and establish a real-word case study based on empirical evidence. That way, you can sell a service that’s been proven at scale.

You also need to measure the network performance of your operator CDN service right from the start so that you can substantiate your claims with objective metrics. Using Skytide’s real-time CDN analytics and reporting is a great way to do this.

Skytide Insight for CDNs gives you visibility into essential operational metrics like cache hits and error rates, traffic distribution and volume, capacity utilization and the billing trends and bandwidth consumption of your customers — with the level of detail to support performance claims.

2

2. Grab a seat at the multi-CDN table

Congratulations, you’ve signed a new customer for your operator CDN. Just don’t expect to be the only content delivery network that it utilizes. That’s not how things work nowadays. Content owners are increasingly employing a multi-CDN strategy in order to:

• Establish a larger, deeper footprint. CDNs often have varying levels of geographic concentration. As online video traffic spikes in different parts of the globe, a content provider utilizing a multi-CDN strategy can easily switch between providers to capitalize on their regional strengths and better align with demand.

• Spread the risk. If one CDN experiences technical problems, traffic can quickly be shifted to another.

• Negotiate the most competitive prices.

Content owners gain leverage by having multiple CDNs compete against each other to assure aggressive pricing.

To thrive in this multi-CDN environment, Telco CDNs should:

‣ Have a program in place that routes traffic to backup CDNs in times of trouble.

‣ Go to market in partnership with multi-CDN control software vendors to assure integration and compliance.

‣ Implement such software as an internal fail-over mechanism invisible to your customers.

‣ Bid for part of a customer’s CDN business but request commitments of additional business if you achieve certain service level agreement (SLA) milestones.

‣ Utilize analytics that provide visibility into service quality — like requests by status code and cache status — that can be used to quickly pinpoint and remedy problems (and preempt your customers from shifting service to a one of its other CDNs.) Only Skytide can provide such multidimensional insight.

3

3. Establish a dedicated and trained sales force

Contrary to popular wisdom, if you build a better CDN the world will not beat a path to your door. Building a superior content delivery network is just the beginning.

You will be competing with established CDNs that have battle-tested sales teams that have cultivated long-standing relationships with the customers you covet. To secure a piece of this business, you will need to:

• Establish a dedicated sales force and task them with the goal of leading prospects through the purchase process. Don’t expect your operations team to handle the sales effort. They are two very different disciplines.

• Assemble a team of experienced sales professionals and equip them with the tools that they need to successfully sell your CDN service. The competitive environment is fierce; established CDN providers will not cede business without a fight.

• Demand training from your technology vendors on the features that differentiate their platforms and the competitive advantage that those features will provide you against incumbent CDNs.

Skytide provides your sales team with the tools to persuasively communicate the advantages of your CDN analytics & reporting — powered by Skytide — over pure-play CDN providers. We have an established program to thoroughly train your sales team, complete with all the support materials you need to easily integrate it into your sales process including: RFP templates, data sheets, demo scripts, white papers, competitive comparison matrixes and more.

4

4. Don’t go it alone

Established pure-play CDNs have a head start. The biggest of these players have significant global coverage and the ability to provide content owners with “one stop shopping” — a single contract and bill, one SLA to validate, a single source for maintenance and support, and a centralized set of reports.

To neutralize these head start advantages, many service providers are banding together to create CDN federations that formalize the process of interconnecting their content delivery networks.

Get involved with as many CDN federation planning and standards groups as possible to credibly demonstrate that you are putting CDN federation on your roadmap. Even federation with CDNs that have overlapping footprints can be of benefit since it can provide your customer a perceived “safety net” when putting some reliance on your CDN.

Skytide is federation-ready. The Skytide Insight for Federated CDNs analytics and reporting solution:

• Can process the huge volumes of data that a CDN federation will generate and transform it into finished reports within minutes.

• Can provide the level of richness and granularity necessary to properly allocate costs and revenue, comply with SLAs, and supply the meaningful insights needed to operate a multi-organizational business.

• Enables you to provide secure portals to each of your customers so that they can access data specific to their own operations. You can also provide individualized access to business partners such as resellers, content syndicators or company subsidiaries.

• Is customizable and extensible, and accommodates rapidly evolving business models.

5

5. Price aggressively

The surge in online video traffic, projected to increase at a compound annual growth rate of 32% through 2015**, has also ushered in a slew of new content delivery networks. This swell in traffic has triggered volume discounts by rival content delivery networks. Add an influx of new CDN providers to the equation and the result is a buyer’s market for content owners, with entrenched competitors offering rates as low as 1¢ per gigabyte.***

All of which means that aggressive pricing is a must if you are to get a foothold in the market.

Because the cost savings derived from reducing transit volumes across your network are so great, you shouldn’t let revenue goals stop you from on-boarding content owners — even if that requires an aggressive pricing strategy. This is especially true at off-peak times when you have excess unused capacity.

Skytide can help you to optimize your pricing to compete effectively.

For instance, our real-time analytics and reporting can help you to measure how much traffic your CDN offloads from its network. Skytide can also help you to identify which time periods are peak and off-peak for each PoP and geographic zone.

** source: Cisco Visual Networking Index

*** source: Dan Rayburn, StreamingMediaBlog.com, 8/2/11

6

Conclusion

Deploying a content delivery network is a significant accomplishment but it is only the first of many challenges for operator CDNs.

To successfully compete against established CDNs for business, operator CDNs must deliver on five essential elements necessary to win new customers and begin the process of validating their competitive advantages.

1. Demonstrate your CDN’s reliability and quality, testing it on your own IPTV or OTT service first if that is an option.

2. Put a plan into place to position your service as part of a content owner’s multi-CDN strategy.

3. Establish a dedicated and trained sales force and equip them with the tools that they need to succeed against formidable competition.

4. Get involved with as many CDN federation planning and standards groups as possible to credibly demonstrate that you are putting CDN federation on your roadmap.

5. Price aggressively because the cost-savings alone from reduced transit volumes coursing your network will justify on-boarding new customers.

Skytide’s real-time CDN analytics and reporting can be a key component to fulfilling on these five drivers. To learn more about Skytide, visit www.skytide.com.

7

IP Video Management Analytics

Related White Papers

7 Online Video Trends to Watch in 2012

The year ahead promises to be full of twists and turns for online video and the digital media supply chain that serves it. Don't be caught flat-footed. Read “7 Online Video Trends to Watch in 2012” to get an advance peek at the trends that will shape the industry and how you can capitalize on the disruption to come.

Read Now

The 4 Keys to Telco CDN Success

Many telecom service providers are building their own content delivery networks as a means to capitalize on the surge in Internet video coursing over their networks. With this white paper, we will reveal four key success factors necessary for Telco CDNs to effectively harness their competitive edge and realize success.

Read Now

How Telcos and ISPs Can Learn to Love OTT

With this white paper we will demonstrate how it is now possible for telcos to improve their position in the content-to-consumer value chain, create a more sustainable business model to value chain members and profit from escalating over-the-top (OTT) video traffic.

Read Now

9