Is the Price Right?

There is still debate, however, over how much actual performance CDN services can deliver. Many argue that just as much improved performance could be achieved simply with faster servers.

In Senior Analyst Seema Williams's research for Forrester she indicated that ESPN.com experienced faster download times "because the content distribution servers at the edge of the network responded to requests faster than the origin servers did, not because content delivered from edge servers didn't traverse the public Internet."

"When we're talking about server speed not really being optimized and being slower than what a content distribution network can deliver, yes, absolutely, that is often a band-aid approach," Williams explains. She adds that CDN providers can address several smaller content delivery issues. "CDNs are a way to holistically answer or solve a whole series of individual, small problems."

Even Akamai's Kieran Taylor is quick to point out that speed, while commonly confused as the only real advantage of a CDN, is an "ancillary" benefit, characterizing performance as merely a part of the return on investment (ROI) that Akamai delivers. "Performance can translate to profit," he says. "Our sales pitch, first and foremost, is ROI. Speed is the sweet benefit, but seconds do count."

Digital Island's Tim Wilson echoes the sentiment, calling speed and enhanced user experience "the special sauce that goes on top" of edge-content-distribution services. "There are certainly people who in-source this stuff, but there's a huge expense that accompanies that central approach."

Wilson refers to ROI findings from Giga Information Group, published in October, to support his company's approach. Enterprise companies using the CDN provider's 2Way Web Services "experienced substantial benefits including cost savings, reliability, security, performance, and flexibility," according to the research firm.

This translated into a much more rapid return on investment. Giga said Global 500 companies that used the integrated hosting and content delivery solution from Digital Island saw payback in an average of three months, with an average savings of more than $890,000 a year.

Those figures might not apply to every case, however. CDN clients like Sportsline.com's Leichtenschlag and ESPN.com's Zehr say that the cost effectiveness of using CDN providers depends largely on the terms of the contract, and contracts can vary greatly. "We revisit [our deal with our CDN provider] every time the contract comes up," Zehr says. "We look at our footprint and our content demands and figure out what makes the most sense."

Zehr adds that ESPN's size may make it easier to obtain a good contract for content distribution. "It might be harder for smaller companies. It might not be a good deal."

Assess Your Stress

Even among larger accounts, not everyone believes that the CDN approach is the way to go. Take Clifford Lopez, North American director of technology for Tribal DDB Worldwide, a consulting, marketing, and e-commerce services provider. Lopez, whose firm counts Anheuser-Busch, Reuters, Microsoft, and PepsiCo among its clients, characterizes using a CDN as putting "a band-aid on something that's festering."

Lopez maintains that laziness, more often than the bottom line, is what convinces Webmasters to sign on with CDNs. "Their basic angle is: It's latency in the Web that's causing your users to have a slower site," Lopez scoffs. "I'd look more to the architecture. You can move content closer to the edge, but the idea that it's the fix-all for bad site performance...our site doesn't have those problems."

Tribal DDB's PepsiWorld Web site, which serves up streaming Britney Spears video clips and offers users merchandise they can buy online with bottle caps, uses no CDN. The real question to ask, Lopez says, is "how much stress is your system under?"

"It's not so scientific, it's not some black art," he says. "They take the stress off your network, but unless you have huge amounts of traffic and you're a news site or Yahoo!, it isn't worth it."

Plenty of IT and system administrators agree with Lopez's assessment. So does Forrester's Seema Williams. "Using a content distribution network is one of those things that makes your site faster and cooler," she says, "but unless you're a really high-profile content site like a CNN.com, it's not necessarily cost effective."

Lopez is skeptical about the CDN solution's reliability as well. "It isn't a cure-all. It's still a system that can be broken. Every system can be broken," Lopez continues, adding that he is paid to be a pessimist. He estimates that his cost of bandwidth would nearly double if he used a CDN provider to move static content to the edge, yet his site performance would improve only by milliseconds.

To Lopez, Akamai and Digital Island offer only "false hope," and he finds the CDN solution a lazy one. "It doesn't save me any time," he says. "Really, they haven't solved the problem, they've just covered it for me."

"Is the appearance of a faster site to consumers worth double the cost?" Lopez asks. "If you have a site that's built clunky, all you're doing [with a CDN] is speeding up clunkiness. It's usually a more systemic problem. Deal with that, and you might not have to go [the CDN] route."

Struggle For Survival

Faced with such skepticism, the future for CDN providers might not be too rosy. According to Williams, a lot has changed since the dot-com dollar days. Fast performance often isn't enough to entice newly budget-conscious site operators to sign on with a CDN. To keep their services attractive, companies like Akamai and Digital Island are busy developing new features to add to their portfolios.

"They've added a whole bunch of new things, mainly around the distribution of personalization," says Williams. "Now, instead of just caching a graphic or a piece of content at the end of the network, they're pushing out some rules about personalization—primarily based on geography. So if a consumer is coming in from Germany, then they automatically get the German version of the particular site. That's definitely a cool thing."

CDNs are also turning to other avenues in their fight to stay alive. Some are consolidating their networks, while others are courting for acquisition. They have also tried integrating their technologies with other services, primarily hosting. But Williams points out that hosting providers that resell content delivery networks are already "falling off the map."

However, ISPs are keen to keep content on someone else's edge network, rather than try to compete with existing CDN players. "We think [CDN services] will be in part resold by some carriers who decide it's just not cost-effective to try to build content distribution networks themselves," Williams says.

The surviving CDN providers have also changed their focus from pure e-commerce and media Web sites to major-league enterprises. Digital Island clients include American Express, Bloomberg Television, and Cisco Systems, while Akamai serves such high-profile companies as Coca-Cola, Columbia House, and Xerox. In fact, 85 percent of Akamai's revenue now comes from enterprise clients, according to Taylor. Because of this, Williams believes the original CDN may end up being the only true survivor, and may become profitable in the first half of 2002.

Further, as she predicted in her Forrester report, CDNs have consolidated into the hosting and networking spaces through deals with Genuity, Exodus, Digex, and other "bandwidth guys," as Lopez calls them. "There aren't a lot of CDNs left standing," Williams observes. "We've seen Digital Island go the way of acquisition, Mirror Image is still hanging out there, and Akamai is obviously the big kahuna, so there really isn't much left to consolidate."