mobile cdns: getting content even closer · and present: mobile cdns: getting content even closer...

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present:

Mobile CDNs: Getting Content Even Closer

Whitepaper

Published Fourth Quarter, 2012 Version 1.0

iGR 12400 W. Hwy 71 Suite 350 PMB 341 Austin TX 78738

Distribution of this report outside of your company or organization is strictly prohibited. Copyright © 2012 iGillottResearch Inc. 1

Table of Contents

Executive Summary..................................................................................................... 1 Figure A: Simplified Mobile CDN Architecture ........................................................................ 1

Methodology .............................................................................................................. 3

Mobile CDNs ............................................................................................................... 4 What is a MCDN? ...............................................................................................................4

How Does the MCDN Work? ................................................................................................... 5 Figure 1: Simplified Mobile CDN Architecture ........................................................................ 5 Table 1: Key MCDN Issues and Differentiators ........................................................................ 6 Who are the International Players in MCDN? ......................................................................... 7 Table 2: Mobile CDN Vendors ................................................................................................. 8

MCDN Standards ................................................................................................................8 MCDN SWOT Analysis ........................................................................................................9

Figure 2: SWOT Analysis, from the MCDN Vendor’s Perspective ........................................... 9 How Will MCDN Impact Current Technology? ...................................................................... 10

What is the Outlook for MCDNs? .............................................................................. 11 Prognosis for the Next 18-24 Months ................................................................................ 11 Prognosis for the Next 24-48 Months ................................................................................ 11

Conclusion ................................................................................................................ 13

About iGR ................................................................................................................. 14 Disclaimer ........................................................................................................................ 14

This research is provided as a member benefit for the exclusive use of members of PCIA – The Wireless Infrastructure Association. It is made available by a partnership between PCIA and iGR.

Distribution of this report outside of your company or organization is strictly prohibited. Copyright © 2012 iGillottResearch Inc.

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Executive Summary

Content Delivery Networks (CDNs) have been around for years and provide a great deal of utility and costs savings for content owners and network operators – as well as an improved user experience for consumers. Mobile Content Delivery Networks (MCDNs) have begun to evolve in recent years, driven in part by consumer demand for content.

So, the difference between the traditional CDN and mobile CDN is that in the latter, content (of whatever type) originates and/or terminates over a wireless network – WiFi, 3G or 4G. The mobile CDN, then, will ideally enable local or geographically specific content to have higher availability because of predictive algorithms based on historical trends and access patterns that locate data on predetermined mobile network equipment, depending on the physical location of the end-user. And, of course, the CDN gear is located inside the mobile operator’s core network – which, by default, puts cached content that much closer to the mobile users.

MCDNs are new technology that leverage CDN implementations in traditional wired core networks. To the best of iGR’s knowledge, only rudimentary MCDNs have been deployed globally.

Mobile CDNs contain new gateway technology that augments access to existing 3G and 4G (LTE) radio access networks (RANs), as the following figure illustrates.

Figure A: Simplified Mobile CDN Architecture

Source: iGR, 2012

iGR believes that MCDNs will likely use a similar model as traditional CDNs, but those edge servers will have to be placed within the mobile operator’s in order to truly accelerate and optimize the delivery of content to mobile data users. The introduction of multiple layered RANs – the heterogeneous network concept – might complicate the use of MCDNs as mobile operators and/or the

Mobile Operator Wired Core Network

Radio Access Network MCDN

Content Location

Mgr.


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MCDN vendors themselves will have to decide where to best place edge servers. And, then they will of course have to balance the potential improved performance benefits and cost savings versus the CapEx and OpEx required to support the mobile CDNs.


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Methodology

This report provides an overview of the market for mobile content delivery networks (MCDNs). The information presented in this report originates from iGR’s primary and secondary research. Definitions of industry terminology can be found in the Definitions section towards the end of this report.


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Mobile CDNs

Content Delivery Networks (CDNs) have been around for years and provide a great deal of utility and costs savings for content owners and network operators – as well as an improved user experience for consumers. Mobile Content Delivery Networks (MCDNs) have begun to evolve in recent years, driven in part by consumer demand for content.

The great promise of MCDNs is likely to significantly impact mobile operators in the years ahead, as mobile content providers begin to deliver unique new custom multimedia content to end-users via both 3G and 4G networks. Ultimately, MCDNs will not replace CDNs. They will augment them.

What is a MCDN?

To oversimplify, a content delivery network is a series of connected servers that span the globe. These “edge” servers cache copies of data/information from multiple sites. When a user lands on a website and requests X content, assuming that site is part of a CDN, the server making the request examines the request to determine the best set of edge servers to fulfill the request.

The “best” servers are those closest (geographically speaking) to where the request originated. The closer the physical proximity, the shorter distance and fewer hops needed to deliver both the requests for content and the content itself. So, if a user in Texas wants a photo off a site that is hosted in New York, then the photo makes that trip.

However, if the content owner has an agreement with a CDN provider (Akamai, Limelight, etc.), then perhaps that photo is static or often-requested so it is likely to be cached on an CDN edge server located in Texas. So, the content request is instead fulfilled by that edge server – this shorter round trip and fewer hops means an improved the user experience and reduced cost for both the network owner and the content owner.

Now if the Texas end user was on a smartphone, then the request and resultant content, would obviously have to traverse the radio network and the mobile operator’s core before getting handed off to the public Internet. Even if the user is in a perfect RF environment, that process would still consume many more milliseconds than it would if the user were on their wired broadband connection at home, for example.

So, the difference between the traditional CDN and mobile CDN is that in the latter, content (of whatever type) originates and/or terminates over a wireless network – WiFi, 3G or 4G. The mobile CDN, then, will ideally enable local or geographically specific content to have higher availability because of predictive algorithms based on historical trends and access patterns that locate data on predetermined mobile network equipment, depending on the physical location


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of the end-user. And, of course, the CDN gear is located inside the mobile operator’s core network – which, by default, puts cached content that much closer to the mobile users.

Note, too, that the ongoing rollout of WiFi Offload networks, Distributed Antenna Systems (DAS) and, increasingly, small cells in the metro environment might further complicate the decision-making about where to place the mobile CDN edge servers. For example, should mobile CDNs be placed alongside the base station serving a sizeable DAS installation – like one at a sports stadium? Or, should an MCDN edge server be placed alongside the gateway that aggregates metro cell traffic?

How Does the MCDN Work?

MCDNs are new technology that leverage CND implementations in traditional wired core networks. To the best of iGR’s knowledge, only rudimentary MCDNs have been deployed globally.

Mobile CDNs contain new gateway technology that augments access to existing 3G and 4G (LTE) radio access networks (RANs), as the following figure illustrates.

Figure 1: Simplified Mobile CDN Architecture

Source: iGR, 2012

The Mobile CDN Architecture consists of an overlay network on the mobile operators wired core network and there are gateways to the RAN, represented


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by the star in the above figure. The MCDN consists of new Portal Servers, Content Servers and the Content Location Manager (CLM). The latter keeps track of all streaming media, custom, and traditional content that is available on the MCDN. The CLM is a dedicated server in the MCDN that controls management of content location and scheduling content pre-fetches. The various mobile devices (smartphones, tablets, laptops, etc.) connect to the MCDN through the RAN.

In addition to the varied other Web-related content typically stored on CDNs, the many content servers in the MCDN will also store large numbers of streaming media segments that are derived from the original content (as mentioned previously).

The mobile operator can either own or outsource the MCDN. It is iGR’s opinion that mobile operators and MCDNs vendors will stay out of the content creation and management business, focusing solely on transport.

There are several basic steps in how the mobile CDN accelerate the delivery of content over the mobile network to the requesting device:

1) Wireless customer requests content via a wireless eNodeB base station

2) Server sends request to a Gateway Service Node (GSN)

3) GSN forwards request to content server

4) Content server sends reply for request to GSN

5) GSN sends content to the eNodeB, which forwards the request via the air interface to the requestor

In the above sequence, new accelerator technology resident in the GSN enables the MCDN to become an extension of the Internet paradigm for content distribution. With the MCDN, the content resides much closer to the mobile end-user – inside the mobile operator’s core network – thus greatly reducing the number of network hops required to request, access, and send content.

The following table provides an overview of the key MCDN-related issues and differentiators as compared to traditional CDNs.

Table 1: Key MCDN Issues and Differentiators

Issue MCDN Differentiators versus CDNs

Information Survivability Ensure that info doesn’t terminate like a CDN cache that is not accessed due to isolation, malfunctions, or distribution failures

Adjust content to variable and mobile network devices, not fixed devices (e.g., optimize for smartphones not desktop PCs)


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Issue MCDN Differentiators versus CDNs

Information Distribution Ensure efficient transmission and minimal hop distribution

Design network to provide efficient node mobility that reflects user behaviors and patterns in near real-time

Information propagation across network Determine frequency at which info should be replicated and sent to neighboring nodes

Localize content in a prudent manner to minimize replication traffic

Distribution based on network performance

Content spread according to network performance, bandwidth retrieval and delay

Network location of content should be chosen by taking into account current congestion levels and predictive behavior patterns

Security MCDN equipment and customers need to be certified on network

Minimize hops that may corrupt content

Source: iGR, 2012

Other advancements in technology are enabling adaptive bit rate technologies like Adobe Flash, Microsoft’s Smooth Streaming (Silverlight), and Apple’s HLS (HTTP Live Streaming), to greatly streamline mobile content for transmission across the mobile network and, by implication, the MCDN. Essentially, these technologies are capable of breaking content into small bits of information and adjusting the bit rate in near real-time.

As alluded to earlier, by breaking the video content into smaller “chunks” that are encoded at different bit rates the mobile CDN (or the streaming/origin server in the absence of a CDN) can use feedback from the internet user’s video player to dynamically detect the best network speed for delivering the video. And with similar functionality built directly into HSPA+ and LTE, the terminal and the base station can communicate on radio frequency quality and that information could also be factored into the rate at which the content is streamed to the device.

Note that this discussion primarily refers to on-demand video / content. Live content – e.g., an in-progress sports event – obviously cannot be cached. Providing live video over a mobile network represents a significant capital and operational investment and commitment.

Who are the International Players in MCDN?

MCDNs are evolving as the demand for mobile data grows. A number of the traditional CDNS, Akamai and Limelight in particular, are now deploying MCDNs. However, the costs to provide robust MCDN services for them are counterintuitive in light of their core business.


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This may change in the future as iGR anticipates that such firms may choose to accelerate their expansion into this business because of sheer data volumes and customer demand. The following table provides a list of some of MCDNs.

Table 2: Mobile CDN Vendors

Mobile CDN Vendors / Providers

Akami Fastly VPSNet

Alcatel-Lucent GoGrid

Amazon HDDN Peer1

AT&T Highwinds RackSpace

Windows Azure Internap Softlayer

BitGravity Level 3 Tata

Jet-Stream Limelight Telefonica

Brightbox MaxCDN TinyCDN

CacheFly Mirror Image ValveCDN

CDN77 NetDNA Verizon

Chinacache Nokia Siemens Networks

Cisco NTT Communications

Ericsson Velocix

Source: iGR; CDN Finder, 2012

Many of the CDN providers listed in the above table are new entrants to the CDN market. Although a number of the traditional CDNs also provide mobile CDN support, the drive to push more strongly into the mobile space is lower with many of these firms because mobile devices consume fewer bits than traditional CDNs. The traditional CDN generates revenue based on the volume of bits passed. The higher the volume, the higher the revenue. In comparison to wired data network traffic, mobile users generate a fraction of the traffic. So, the revenue opportunity is not that compelling.

However, with the rapid uptake in smartphones and tablets in the past several years both in the U.S. and other developed markets, along with the rollout of 4G LTE networks, many of these firms appear to be reconsidering their stance. iGR anticipates that there will be many new entrants to the mobile CDN space in the next two years. There are also likely to also be a number of mergers and acquisitions. One good example is Akamai’s relatively recent acquisition of CDNetworks.

MCDN Standards

iGR also believes that 3G networks will exist for many years both in the U.S. and, of course, in other markets. iGR also believes that the 3GPP standard will continue to evolve to more clearly define the delivery of mobile content via 3G and 4G network technologies. iGR believes that MCDN vendors that have experience with LTE may have a competitive advantage because of the inherent new capabilities of 4G technology that dovetail with mobile content distribution.


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The 3GPP standards body is in the process of defining and documenting Release 12 of the 3GPP standard, which is scheduled for June of 2014. It is understood that this release will contain more documentation related to LTE and new mobile devices, and how the issue of interconnectivity and roaming will be dealt with. In addition, the IEEE P220 standard released in 2011 defines the delivery of rich content for HD video, games, music books to mobile devices. This standard focuses on local storing of content to relieve network congestion and accelerate delivery to mobile devices.

iGR believes that mobile CDN vendors have an opportunity to provide significant value to mobile operators by combining the above two standards into products that help operators constrain the rapid consumption of mobile data over their licensed spectrum.

MCDN SWOT Analysis

The following figure provides a summary overview of the MCDN potential contribution to mobile operators and their customers. This chart delineates the internal Strengths and Weaknesses for MCDN vendors. It also provides a summary of the External Opportunities and Threats to the MCDN vendors.

Figure 2: SWOT Analysis, from the MCDN Vendor’s Perspective

Source: iGR, 2012

In iGR’s opinion, on the favorable side, MCDN Strengths and Opportunities far outweigh the unfavorable Weaknesses and Threats. The challenge for MCDN providers is that their networks are in the early stages of deployment into


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mobile operator networks. Clearly, such networks require exhaustive planning, education, and implementation planning up-front during the first few years.

However, in the next two years, MCDN vendors and mobile operators are likely to realize new revenues. As more bits pass over mobile networks, MCDN vendors will see revenues rise. And, mobile operators may have an opportunity to realize new revenues (perhaps by exacting a “toll” for letting MCDN providers into their network). Mobile operators might also see their cost of delivering content decrease. That said, iGR believes there will be an adjustment and retooling of mobile operator technical and personnel resources in order to ensure a smooth transition to MCDN.

How Will MCDN Impact Current Technology?

With the evolution of MCDN, there are many potential challenges ahead. Specifically, with the management of so much equipment within the mobile operator’s network, there are likely to be challenges related to providing content consistency, automated capabilities for content distribution, network management and network security. Moreover, MCDN via LTE is new and there are likely to be problems with eNode B technology churn and many new issues related to dynamic bandwidth availability and management.

Given that MCDNs require new content distribution equipment only adds to the challenge. There is likely to be much more time and effort spent in the design of the MCDN and the location of the new equipment, which will require dynamic updating, dependent on radio network conditions at any point in time.


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What is the Outlook for MCDNs?

MCDNs are likely to become popular as a means for distributing information to wireless subscribers. Traditional CDN techniques assumed static client demand distribution via a network of fixed edge servers that cache content. This paradigm is unlikely to perform as well for mobile data users as any data requests they originate must first traverse the mobile operator’s RAN.

iGR believes that MCDNs will likely use a similar model as traditional CDNs, but those edge servers will have to be placed within the mobile operator’s in order to truly accelerate and optimize the delivery of content to mobile data users. The introduction of multiple layered RANs – the heterogeneous network concept – might complicate the use of MCDNs as mobile operators and/or the MCDN vendors themselves will have to decide where to best place edge servers. And, then they will of course have to balance the potential improved performance benefits and cost savings versus the CapEx and OpEx required to support the mobile CDNs..

Prognosis for the Next 18-24 Months

MCDNs, over the next 18-24 months, will bridge the gap in content timeliness and accessibility due to lack of fixed network infrastructure coverage. The next 18-24 months will show, in iGR’s opinion, a “burn in” period of temporary chaos as new and legacy content providers begin to mature their product portfolios.

Mobile operators will garner more experience related to managing and interactively tuning many new network components (e.g., LTE) that will deliver content to wireless customers. It is also iGR’s opinion that the ready access to mobile data will foster recasting of product packaging and marketing on the part of the mobile operators, who are now transition from a revenue legacy based on voice products to a plethora of new data products that represent a much greater revenue potential. The all-you-can-consume rate plane are a relic of the past at two of the U.S. major operators (Verizon Wireless and AT&T); it remains to be seen when the remaining Tier 1 operators follow suit – and what niches the Tier 2 and 3 carriers can fill amid the new tiered ecosystem.

Prognosis for the Next 24-48 Months

After the initial 18-24 months “burn in” period, the explosion in content distribution over mobile data networks will be unprecedented. This represents a period where true IMS functionality, defined six to seven years ago becomes a reality.

This period will see the morphing of tablets and smartphones into new devices that will include the best attributes of both technologies (perhaps new mini-tablets with enhanced voice and data capabilities). Also, IP will emerge to


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become the new paradigm as more and more wireless subscribers acquire LTE-capable devices.

Coupled with the advent of cloud computing, these new devices will access multiple systems and applications in the cloud. The cost of these devices will decline, but the value of the content they have access to will represent the new revenue model that replaces the legacy model supported by today’s PC technology and circuit-switched networks.


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Conclusion

The new paradigm for content distribution promises to be the conduit to customer satisfaction for the consumer and revenue realization by mobile operators and MCDNs. End-users will demand improved content access and delivery. And as they come to rely (even more so than today) on their mobile devices, the wireless carriers will likely need to implement MCDN in their networks to meet those demands.

The advent of MCDNs, in iGR’s opinion, will also result in new revenue sharing opportunities between the MCDNs and the content providers. Partnerships between wireless network equipment vendors and CDN providers might also become more prevalent (one example being the Ericsson-Akamai partnership that was announced in early 2011).

It is also possible that the mobile operator will build enhanced content delivery capabilities into their own networks and then wholesale/lease that capability back to the either the MCDN vendors (e.g., Akamai, Limelight, etc.) and/or to the content owners themselves.

Some independent content owners/distributors (e.g., Netflix) which have their own CDNs may choose to go through the certification process the carriers will undoubtedly require and so place their own edge servers within an operator’s network. Any of these scenarios might represent new revenue opportunities for mobile operators.


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About iGR

iGR is a market strategy consultancy focused on the wireless and mobile communications industry. Founded by Iain Gillott, one of the wireless industry’s leading analysts, we research and analyze the impact new wireless and mobile technologies will have on the industry, on vendors’ competitive positioning, and on our clients’ strategic business plans.

Our clients typically include service providers, equipment vendors, mobile Internet software providers, wireless ASPs, mobile commerce vendors, and billing, provisioning, and back office solution providers. We offer a range of services to help companies improve their position in the marketplace, clearly define their future direction, and, ultimately, improve their bottom line.

Note that Iain Gillott currently serves as an independent director for Wmode, Inc.

A more complete profile of the company can be found at http://www.igr-inc.com/.

Disclaimer

The opinions expressed in this white paper are those of iGR and do not reflect the opinions of the companies or organizations referenced in this paper. All research was conducted exclusively and independently by iGR.

http://www.igr-inc.com/

http://www.igr-inc.com/

mobile cdns: getting content even closer · and present: mobile cdns: getting content even closer...

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