OTT IPTV has broad business opportunities. How can operators further explore CDN opportunity windows?

At the Asia-Pacific CDN Summit in April, George, a senior engineer at China Unicom Network Technology Research Institute, made a prediction: the compound growth rate of global traffic accounts for 63%, video traffic accounts for 75%, and video services have become the most important traffic share of the entire network. If operators do not engage in video services at this time, pipeline loss will become more and more serious. Therefore, at that famous CDN industry summit, the theme he explained was still the strategy of operators to develop CDN.

Back to reality, the efforts and achievements of operators in CDN are becoming more and more obvious.

Currently, the Internet and mobile Internet are developing rapidly. With the growth of OTT, mobile video and cloud services, the CDN (Content Delivery Network) market is experiencing rapid growth. In the domestic CDN market, Internet companies that were involved in CDN business in the early stage, such as Wangsu Technology, have occupied most of the market share. Since last year, operators have begun to focus on CDN business, and this year they have stepped up their efforts to develop it.

[[192518]]

It is reported that the growth rate of CDN business has ranked first among all the businesses of operators, and operators are striving to cultivate CDN business into a new growth pole. So, for operators, what are the advantages of developing CDN business? And how can they transform the advantages into a winning advantage in competing with Internet service providers?

The “4-second rule” has led to the emergence of professional CDN service providers, which are built by giants themselves

There is a "4-second rule" in the Internet field. When users visit a website, if the waiting time for the webpage to open exceeds 4 seconds, more than 30% of users will give up waiting. With the development of the Internet, users have higher requirements for response speed. Especially in the case of e-commerce promotions, new film releases, or concentrated user access in a certain period of time, burst traffic will be generated, causing the source station to be overloaded and insufficient bandwidth to meet the burst demand for traffic.

The content distribution network (CDN) service refers to the use of node server groups distributed in different regions to form a traffic distribution management network platform, providing users with decentralized storage and high-speed caching of content, and distributing content to fast and stable cache servers based on the dynamic network traffic and load conditions, thereby improving the access response speed of user content and the availability of services. It can be said that CDN is an "overlay network" on the IP basic network and an "express delivery" that connects content and the network. For Internet giants, due to their large number of businesses, huge traffic and mature technical reserves, Internet giants often choose to build their own CDN. Internet companies that do not have the ability to build their own CDN networks will choose to cooperate with CDN service providers to improve network response speed.

Operators' self-built integrated CDN has advantages, but the technical drive is insufficient

The advantages of operators are: they have huge bandwidth and network advantages, their bandwidth costs are flexible, and they can configure the most advanced CDN service network; they have built dedicated CDN networks such as streaming media, and they can upgrade and transform them on this basis to quickly launch a variety of CDN services. The disadvantages of operators are: operators are resource-based businesses, not driven by technology. For CDN, resources are only the foundation, and technology is needed to achieve effects and efficiency. From a technical perspective, CDN technology and operational experience must be accumulated over time and talent. Without long-term accumulation, it is difficult to operate a CDN network well; CDN must be customized according to customer needs, and the traditional model of operators providing standardized services will be limited.

How do operators develop CDN services? In what form do they develop CDN services?

Nowadays, it has become a trend for international telecom operators to cooperate with CDN professional service providers.

In 2011, Japan's second largest operator KDDI acquired 85% of the shares of CDNetworks, a Korean CDN company; in 2012, AT&T gave up building its own CDN network and entered into comprehensive cooperation with Akamai, the largest CDN company in the United States; at the end of 2013, Verizon, a major US operator, acquired EdgeCast, a local CDN company ranked among the top three. Domestic operators in my country are more likely to adopt the model of conducting CDN business on their own. Operators are also fully capable of providing CDN services by themselves. By building related platforms such as Internet TV CDN and provincial cache, they can provide acceleration services for Internet users in the province, which will have a significant effect in improving the traffic rate of the local network.

CDN is for its own business and contracted Internet content, and it distributes and accelerates content in an active authorization manner according to business needs; Cache is for open Internet content, which is non-contracted content. CDN is mainly responsible for introducing large-scale content source stations with high service traffic in a contracted manner. The two complement each other in the scope of introduced content, and how to achieve the mutual exclusion of the content cached by Cache based on access popularity and the planned introduction of content in the CDN mode, and how to achieve the full network service and *** scheduling of the content introduced by province, have become the fusion points of the two.

For operators, to develop integrated CDN services, they must give full play to the advantages of resource coverage and the elastic cost advantages brought by it, and increase cooperation with related companies with an open mind. Kong Lingshan of China Mobile once prescribed three good medicines for this at the 2017 Asia Pacific CDN Summit: 1. Node sinking to fundamentally solve the perception problem; 2. Avoid disordered scheduling and reduce Brownian motion; 3. Launch comprehensive cooperation and win-win. He believes that operators should sink edge nodes as much as possible, schedule nearby, and send medium and low-density content such as standard definition to provinces, and high-density content such as 4K to cities; avoid disordered scheduling, call for scheduling according to certain rules, and reduce Brownian motion. Currently, less than 20% of CDN service providers are engaged in penetration rate because the layout is not deployed in a planned economic way, but is promoted in a model that must make money; network operators and CDN operators carry out refined collaboration to establish a group that can handle user perception problems at all times, call for sharing network information, and establish a mechanism for refined scheduling and collaboration. He revealed that China Mobile's Government and Enterprise Branch has established a special service support team: IDC resources are distributed throughout the country and actively supply IDC resources; support special content planning and network collaboration; support the deployment of sinking nodes within the mobile network, support daily operation services and collaboration. At the same time, China Mobile International Co., Ltd. has established an international end-to-end service force: the layout of important overseas node resources has been completed, actively serving the company's going global strategy, strengthening distribution capabilities in Chinese hot spots in Asia Pacific, North America and Europe; introducing overseas content, and coordinating domestic CDN networks to serve domestic users.

China Unicom, on the other hand, has built a cross-platform CDN network with fast speed, stable performance, strong adaptability and good scalability across the country by using cutting-edge CDN technology and abundant backbone network resources. It distributes cacheable content from customer source stations to edge nodes of the CDN network, and locates user access to the best service node through an efficient and intelligent load balancing system, effectively avoiding network congestion, reducing pressure on source stations, and achieving nearby access, thereby accelerating access speed and improving user access experience. China Unicom's CDN business has a business support capacity of more than 300 nodes and more than 5T, covering major provinces and cities across the country, with a reserve bandwidth of more than 30T, and the ability to customize and expand according to customer business models. Through cooperation with the best overseas CDN operators, it has the ability to load overseas nodes to meet the market demand of "domestic landing of overseas customers and overseas landing of domestic customers". China Unicom connects each CDN node with the public network and the boutique network at the same time, and establishes an independent autonomous domain to form a content distribution network covering the entire network. Through the boutique network back to the source, the latency is greatly shortened, realizing the cloud network integration function of CDN business.

OTTIPTV brings more business opportunities. How can operators further explore CDN opportunity windows?

Specifically, it can be further divided into two target markets: user-intensive metropolitan area networks and non-user-intensive metropolitan area networks. In user-intensive metropolitan area networks, major CDN service providers have deployed core resources and operation teams. Under the current competitive landscape of the video market, operators may only be competitive in developing CDN services with high-definition video. For non-user-intensive metropolitan area networks, in some markets where other CDN vendors have not deployed key resources, there is an opportunity window for operators to develop CDN services: there is a demand for full-network cache services; 4G/OTT brings more business opportunities, and IPTVCDN has a broad market prospect. Network development drives content development, and content development drives CDN development.

At the same time, the mature development of Cache, IPTVCDN, and mobile Internet CDN makes it possible to integrate CDN. Operators can provide users with network acceleration services, that is, for traditional industry target customers, such as government websites, corporate websites, financial institutions, education and training, etc., which rely on external CDN services and have low penetration rates; integration strategies can provide full-service services and overall solutions. Operators can also use IPTV to provide OTCDN services to improve user experience, increase website profits, ensure data integrity, and enhance website security.

At present, strategies such as the "Belt and Road" initiative are starting from the interconnection of basic networks, and gradually establishing an international information channel with coordinated development of international submarine cables and cross-border terrestrial optical cables. On the other hand, space information resources have become an important strategic resource for various countries, and operators expanding the service space of infrastructure will become a favorable phenomenon for future market prosperity.