The three major players in the domestic CDN market are competing against each other, and differentiation may be the key to success

With the popularization and development of the Internet, the explosion of live video, the rise of short videos, and the rapid growth of OTT TV, people have higher requirements for the immediacy of Internet content distribution and the reduction of delays. At the same time, the technical threshold of CDN (content distribution network) has been lowered, and more and more companies have entered the CDN market. At present, my country's CDN market has gradually matured and presents a three-legged situation of "traditional CDN service providers, cloud computing enterprise CDN, and shared CDN".

Cloud computing companies are involved in CDN and are pioneering innovation

The reason why cloud computing service providers enter the CDN field is, on the one hand, to improve the cloud service ecosystem, and on the other hand, to expand cloud service business based on CDN bandwidth.

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Considering factors such as commercial applications, network performance, and cost, some Internet cloud computing companies have begun to actively build their own CDN services. For example, Alibaba Cloud and Tencent Cloud initially built their own CDNs just to serve their own needs. As the scale of their own CDNs continued to expand, they gradually used the redundant parts for commercial use.

In 2006, Taobao began to build its own CDN. In March 2014, Taobao CDN joined Alibaba Cloud's cloud product series. Alibaba Cloud covers more than 30 countries, with more than 500 global nodes and a total bandwidth of 40T, and has strong comprehensive strength. However, everything has two sides. As Internet giants, BAT has its own network services with huge traffic consumption. Self-built CDN must first serve itself. During the peak period of network demand, such as "Double 11", whether the surge in demand will affect the service to third-party customers, industry insiders are still worried about this.

After entering the CDN field, Alibaba launched a price "cut in half" strategy. According to the bandwidth and traffic billing standards, the price of Alibaba Cloud CDN service has dropped by 21.2%. This policy has directly changed the traditional billing rules of the industry. On this basis, Tencent Cloud has also launched a "free + discount" measure, and Baidu Cloud has also proposed to "accelerate China's Internet for free." The price advantage has made the CDN business of cloud computing companies quickly favored by small and medium-sized enterprises and start-ups.

While engaging in price wars, cloud computing companies are also driving CDN innovation.

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The Chinese IDC community learned from Tencent Cloud that Tencent Cloud CDN has currently built more than 600 nodes around the world, and this number will increase significantly this year. At the same time, the capacity of Tencent Cloud's single node is upgraded year by year, and the coverage rate of super nodes with large computing, storage and bandwidth is getting higher and higher.

Da Zhiqian, general manager of Tencent Cloud's Internet industry, believes that the advent of the artificial intelligence era has prompted CDN to urgently undergo rapid technological changes. After the price war, the CDN industry will enter an era of technologically differentiated competition.

With the completion and improvement of AI basic algorithms and the consolidation of image, audio and natural language processing, Tencent Cloud has seen the rapid growth of corporate demand for AI practical application scenarios. At the same time, AI will also enter the lives of end consumers. As AI business grows, it brings a large number of computing needs. Da Zhiqian said: "CDN alone is far from meeting the industry's needs for computing, transmission, massive connections, and massive processing. The future must be an era of coordinated development of cloud and CDN."

Traditional CDN service providers seek breakthroughs

When talking about the old traditional CDN service providers, we have to mention Wangsu Technology. Since 2000, Wangsu Technology has been involved in the CDN industry. At present, Wangsu Technology has more than 750 nodes in the world, of which the number of overseas nodes has climbed to 114. There are nearly 80 nodes in the Asia-Pacific region, and node coverage has been achieved in Europe, North America, Oceania and Africa. It can provide different solutions to customers in different industries, but its price is still at a relatively high level in the current CDN market.

Facing the "price war", Wangsu Technology told the Chinese IDC circle: "The continuous price war has caused most companies in the industry to operate at a loss and compete for customers with negative gross profits." Regarding how to deal with the impact of the price war, Wangsu Technology responded: "In response to the current price war, Wangsu will adjust prices according to market conditions; but more importantly, technology and service quality are the real foundation of Wangsu. Creating high-quality services and helping customers continuously improve their Internet access experience is the most important thing."

In addition, due to the impact of the price war, Wangsu began to aggressively enter the overseas market to seek new breakthroughs. In February this year, it acquired 97.83% of the shares of CDNetworks, a South Korean CDN service provider, and in May it acquired 70% of the shares of CDN-VIDEO, a Russian CDN operator. Recently, it opened four major nodes in India.

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Of course, Wangsu Technology is just a representative of the old CDN service providers, and it is in the same echelon with ChinaCache, Dilian, etc. In the face of the continuous differentiation of the entire market and the increasing number of participating companies, these old CDN service providers are also using their accumulated capital and hardware advantages to develop new service products and maintain their market position.

Shared CDN emerges as a new force, creating a new path

In 2015, NetMind Technology launched Star Domain CDN, which features a shared economy. From the company's financial report, we can see that the Xunlei cloud computing business carried by Star Domain CDN has been growing rapidly for seven consecutive quarters, with its bandwidth sales increasing by 38% month-on-month, total service bandwidth increasing by 21% month-on-month, and year-on-year growth reaching 234%. Innovative CDNs represented by Star Domain have emerged as a dark horse.

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Analyzing from the specific application scenarios of users, in the personal entertainment market, shared CDN represented by Star Domain CDN has great potential. For home entertainment users, shared CDN has the advantages of high node count and local scheduling, and utilizes the limited idle bandwidth resources of the private sector to make the video on demand network service faster and more stable.

The architecture of traditional CDN and cloud service providers is a backbone network architecture, and the backbone network architecture cannot increase the number of nodes by expanding data centers and computer rooms. Star Domain CDN uses the powerful resources accumulated by Thunder in the fields of P2P, P2SP, resource scheduling, etc. to launch the Thunder Money-Making product, which has attracted a large number of ordinary users to use idle bandwidth resources to realize cash. After a Money-Making user goes online, he becomes a node of Star Domain CDN, and tens of thousands of Money-Making users constitute the massive nodes of Star Domain CDN.

As of November 2015, the number of Star Domain CDN nodes has reached over 300,000, and has been actually applied to the video services of Internet companies such as iQiyi, Mango TV, and Xiaomi TV. ***World Game Company has also become a customer of Star Domain CDN, allowing players to enjoy a smooth gaming experience.

However, the industry has some doubts about the hundreds of thousands of "core nodes" of shared CDNs. Industry insiders said that for general CDN companies, having a few hundred nodes is already a lot. The crowdfunding model of Star Domain leads to a large number of connected hardware (nodes), which can easily reach 100,000. The technical difficulty lies in how to dispatch resources through such a large number of nodes to ensure the playback experience of video websites. Moreover, as the network becomes larger and the number of nodes increases, the technical difficulty will also increase. "

Customers need personalized and differentiated solutions

At present, my country's CDN market is booming, and the three-legged market structure is also driving the CDN industry to develop in a diversified direction.

Facing an increasingly diversified market, Wangsu Technology told the Chinese IDC circle: "With the entry of cloud companies and other CDN companies, the entire industry pie continues to grow. We believe that the entry of competitors will continue to drive the industry pie to grow, which will be beneficial to the healthy development of the entire industry in the long run."

NetMind Technology told China IDC Circle: "The current market structure is driven by changes in market demand. With the rapid development of the Internet, a variety of new Internet applications and new businesses such as high-definition video, AI, and VR have emerged in an endless stream and are growing explosively. Therefore, customers have higher and higher requirements for data transmission speeds, and the amount of data transmitted is also increasing."

As the market grows and network demands become more complex, CDN companies are becoming more and more segmented. These are the results of competition among the market, demand, and customers. In this environment, the most important thing for CDN companies is to clarify customer needs and propose personalized and differentiated solutions in a targeted manner. This is the real way to win.