If that caught the eye of our competitors then I’m sorry to disappoint but I’m not going to talk about our future plans. I get asked by analysts, journalists and customers, all the time, why we entered this space and what our plan was when we did. So I thought I’d share that more broadly.
Four years ago we made a technology acquisition that enabled Level 3 to enter the CDN space. That particular asset was sought out specifically because it had the right combination of experienced developers and patented technology.
We embarked on that journey with a five-year plan and business case. That plan was broken into four phases. The phases were designed to be independent so at times they were started concurrently – trigged by both our readiness and the market’s dynamics. At other times we embarked on them one after the other.
Phase 1 was about entering the CDN market. We needed to integrate the CDN technology into the Level 3 network and change the focus of the development teams onto the delivery of large objects. That was the segment of the market that we believed to be our sweet spot at that time. We believed that a combination of our technology and network assets would give us a quality, scale and cost advantage.
As part of this phase we also built a brand new streaming platform and a massive origin storage platform.
Phase 2 was designed to further push our success in the media and entertainment space by integrating the CDN with Vyvx. We created a suite of capabilities under the banner of Internet Broadcast Elements. This provides a whole set of capabilities aimed at simplifying the workflow from live video creation through to Internet streaming. It is targeted at both the one-off event market and the more dedicated TV Everywhere like solutions.
Phase 3 was about creating a world-class online window into our products. We put together a new team who completely rebuilt our media portal, added a market-leading reporting and analytics capability, enabled all of that through a suite of simple APIs and finally added self-service ordering and configuring for our customers. We placed our network and all of the data into our customers hands in a simple and elegant way.
Phase 4 was about going back to the technology we had acquired in the first place and removing the myopic focus on large object delivery. We dramatically widened our sales channel to include all enterprise applications for CDN technology. Whether that is referred to as whole-site delivery, application acceleration or dynamic content delivery we added it back into our portfolio of capabilities and enabled the whole of Level 3’s sales force to sell it. And in January of this year we added a whole new capability to that suite – Transformation.
It’s been quite a journey. It was planned out before we entered the market although the timing and details have evolved, as we got closer to the market needs and dynamics.
About Mark Taylor
Mr. Taylor
I am grateful to see level 3′s vision of huge bandwidth usage gaining traction. My question though will the owners of the last mile like Verizon and Comcast, along with the wireless companies like Att put a damper on the ever growing usage? Comcast is demanding more and more payments from level 3 (even though at this moment it is not material) for traffic from Netflix, Att and Verizon will be stopping all you can eat wireless bandwidth usage soon. As cost go up for the consumer will the vision of the internet being a giant DVR come to a screeching halt?
Thanks
Hi Stanley – The growth is driven by consumer demand – video services on the Internet are delivering a service that people want. I don’t see that changing or reversing. In fact if you look at the behaviour of the younger consumers going up using the Internet in this way it hard to ever see them changing to a more traditional video consumption method.
The other element is that despite the traffic growth we are all seeing the unit cost of delivery continues to drop dramatically.
Will it all come to a screeching halt then? I don’t think so because in an open and competitive market consumers usually find a service provider to give them what they want.
Agree with Mark. Also the business models shall evolve with time between Telcos and CDNs, with some models already being proposed.
Remember as well that sites like Netflix & BBC iPlayer are given a hard time by Telcos as well. However, if you look at the economics of peering and transit, you will realize that it is actually to the benefit of Telcos as well to get so much traffic. Telcos own the pipes, so for the costs it doesn’t matter how much you fill as long as it doesn’t overflow.