at&t Says It Will Provide CDN Services

Earlier this year Level 3 caused a stir when it said it would enter the content delivery network (CDN) market with a radical pricing model: essentially offering the quality of service features at no incremental cost to what customers expect to pay for simple IP transit. And if you think about it, that's precisely what a CDN does: provide QoS features on top of dumb pipe. All of which should have, and did, raise fears about the health of the CDN market.

After all, if a contestant says it will give customers for free, what they today pay for, that's disruptive. Most recently, at&t itself said it was getting into the CDN business as well. Which should have caused another shudder: remember Northpoint, Rhythms Netconnections and Covad? They were the three independent providers in the nascent Digital Subscriber Line broadband access market. Of course, when the incumbent telcos decided broadband access was a business they had to "own," they simply moved to do that.

So are Level 3 and at&t a threat to market-leader Akamai? Right now it's hard to say much, beyond the obvious fact that competition is increasing in the space. One issue could ultimately be the size of the market opportunity, the reason for that being that a smallish market will favor specialists, while a large market will favor the larger telcos.

And it is not necessarily simply because scale economies might kick in. It is more a matter that large telcos tend not to do well in market segments that are small. Small markets never get the attention they might deserve in a large organization. So unless the market gets fairly sizable, a large telco simply will not invest enough to keep pace with smaller specialists.

So how big is the market today? As it turns out, that's a guesstimate of sorts.

Some things are hard to count. Unified communications software is an example. People who track these things like concrete measures: ports, servers, licenses sold. So how do you track "presence" features that simply are embedded in the basic functionality of an IP PBX?

Other markets aren't quite that hard to track, but still are fuzzy because mutltiple revenue categories get lumped together in the reporting. Streaming media services, as distinct from application acceleration, provides an example of that sort.

Dan Rayburn,StreamingMedia.com EVP, provides a reasonable way of current approaching the U.S. market size, though. Working backwards from benchmarks, Rayburn suggests the market for CDN services (but not P2P apps) currently is less than $800 million.

Internap's 2007 revenue is about $24 million. Limelight Networks generated about $105 million for 2007 and about $95 million of that was earned in the U.S. market.

Akamai probably generates $400 million to $450 million of its $625 million total revenue comes from their CDN services. Rayburn further guesses that U.S. CDN revenues amount to $300 million.

Level 3 wasn't in the market for much of the year, but might have earned $2 million or so.

VeriSign might have earned about $8 million for the year in the U.S. market.

Mirror Image, CacheLogic, Panther Express, CacheFly and Advection.NET taken together will do about $20 million in the U.S. market.

EdgeCast, CDNetworks and BitGravity combined did about $5 million for the year. Again, these are new services that didn't have a full year of operation to measure.

PEER 1, NaviSite and Ignite Technologies together collectively generated about $8 million.

All other smaller regional service providers providing small and medium sized businesses outsourced video delivery services sold under $20 million in 2007.

Can iPhone Overtake BlackBerry??

Now that I've had a chance to look at Research in Motion's most recent quarterly results, which were robust, one can make a comparison between what RIM did, and what 9to5mac.com expects Apple to announce it has done. Namely, 9to5mac.com expects Apple to announce sales of five million iPhones in February.

RIM sold 3.9 million Blackberries in its most recent quarter across more than 100 carriers and 13 product lines. It isn't an apples-to-apples comparison. The two companies have different quarterly "endings," RIM finishing Dec. 1 and Apple Dec. 31.

Plus, it isn't clear what time period the five million iPhones were sold over. 9to5mac.com does not indicate a belief that all five million were sold in one quarter, and one suspects that isn't the case. Make it 3.5 million or so devices in the quarter.

What is interesting is how well Apple would have done, should it report anything like five million devices over even two quarters, given its early status in the market.

Apple has been selling one model of a GSM iPhone in four countries with just four carrier partners; while RIM, with a huge head start, is sold by more than 100 carriers, and features 13 different product lines.

Firefox Goes Cloud Computing

Firefox has taken a step towards cloud computing by releasing the first version of Weave, a way to blend of the desktop and the Web through deeper integration of the browser with online services.

Basically, Weave pushes browser metadata (bookmarks, history, customizations into the cloud so it can be retrieved and used on any machine. The metadata is transparently reflected everywhere an individual gets online. Weave also will provide a basic framework for easily sharing and delegating access to this metadata to friends, family and third-parties. And it's a Mozilla product so there will application program interfaces for developers.

Mozilla intends to provide the infrastructure and an consistent model for how a user can open up their browser metadata to friends and third-party applications.

Bye Bye TDMA

at&t Wireless and Alltel finally are shutting down their old analog and first-generation cellular (TDMA) networks in February 2008. Verizon Wireless says on its Web site that it will retire its analog network on Feb. 18, 2008, and will not provide analog service after that date.

Almost nobody will notice. The carriers say a million phones out of 250 million in use might be affected. No phone capable of text messaging uses analog technology. No Sprint or T-Mobile phones use analog, either.

Carriers have been telling analog customers about the shutdown and offering them new digital service plans and phones, so it isn't clear that any active users will experience issues. There might be some "phones sitting in drawers" that users keep around for emergency 911 calling, without plans, that could be affected.

But at&t, which had the largest number of analog customers at one time, has been phasing analog out since 2001, and with the high rates of phone replacement, can't still be supporting many users on the older system.

Separately from the analog shutdown, Alltel and AT&T will finish phasing out networks that use a first-generation digital technology known as D-AMPS or TDMA (for Time Division Multiple Access).

Google Growth Uneven

Some observers caution that Google is over-estimated where it comes to innovation. "Not everything Google does succeeds," that line of thinking goes. And of course that is quite correct. Lots of things Google has done have not been runaway successes. Some initiatives have failed, plain and simple. GTalk hasn't caught on, and Google bought YouTube because Google's home-grown video site wasn't getting traction.

Perhaps the implication is that potential competitors shouldn't fear Google as much as they seem to, as Google fails often enough. Perhaps the other way to look at matters is the frequency with which Google does, in fact, succeed, compared to the number of attempts. And given the number of attempts, the more Google fails, the more it will discover things that work.

Sure, Google seems to go off on tangents now and then. Google defends these explorations as attempts to find other really big businesses. Maybe. And maybe Google just goes off on tangents now and then. Either way, the attempt to start new things is going to lead to lots of failures, if Google tries enough new things. Some of us might argue that is precisely what makes Google so fearsome: it innovates so fast for a firm its size.

Still, the observation that Google does not succeed with much of anything outside of search might be premature. Even "search" took a while to catch on. So, no, Google does not immediately dominate "every" market or segment it enters. It experiments. It fails. If it succeeds 10 percent of the time, and fails often enough, it just might discover some significant-sized new businesses.

Christmas Humor

MEMO: December 1st
TO: ALL EMPLOYEES

I'm happy to inform you that the company Christmas Party will take place
on December 23rd at Luigi's Open Pit Barbecue.
There will be lots of spiked eggnog and a small band playing traditional
carols... feel free to sing along.
And don't be surprised if our CEO shows up dressed as Santa Claus to
light the Christmas tree!
Exchange of gifts among employees can be done at that time; however, no
gift should be over $10.
Merry Christmas to you, and your family.
Patty Lewis, Human Resources Director


MEMO: December 2nd
TO: ALL EMPLOYEES

In no way was yesterday's memo intended to exclude our Jewish employees.
We recognize that Hanukkah is an important holiday that often coincides
with Christmas (though unfortunately not this year). However, from now
on, we're calling it our "Holiday Party."
The same policy applies to employees who are celebrating Kwanzaa at this
time.
There will be no Christmas tree and no Christmas carols sung.
Happy Holidays to you, and your family.
Patty Lewis, Human Resources Director
MEMO: December 3rd
TO: ALL EMPLOYEES

Regarding the anonymous note I received from a member of Alcoholics
Anonymous requesting a non-drinking table, I'm happy to accommodate this
request, but, don't forget, if I put a sign on the table that reads, "AA
Only," you won't be anonymous anymore.
In addition, forget about the gifts exchange -- no gifts will be allowed
since the union members feel that $10 is too much money.
Happy Holidays to you, and your family.
Patty Lewis, Human Researchers Director


MEMO: December 7th
TO: ALL EMPLOYEES

I've arranged for members of Overeaters Anonymous to sit farthest from
the dessert buffet and pregnant women closest to the restrooms.
Gays are allowed to sit with each other.
Lesbians do not have to sit with the gay men; each will have their own table.
Yes, there will be a flower arrangement for the gay men's table.
Happy now!?
Patty Lewis, Human Racehorses Director

MEMO: December 9th
TO: ALL EMPLOYEES

People, people! -- Nothing sinister was intended by wanting our CEO to
play Santa Claus!
Even if the anagram of "Santa" does happen to be "Satan," there is no
evil connotation to our own "little man in a red suit."
Patty Lewis, Human Rat Race Director

MEMO: December 10th
TO: ALL EMPLOYEES

Vegetarians -- I've had it with you people! We're going to hold this
party at Luigi's Open Pit whether you like it or not, you can just sit
at the table farthest from the "grill of death," as you put it, and
you'll get salad bar only, including hydroponic tomatoes. But, you know
tomatoes have feelings, too. They scream when you slice them. I've heard
them scream.
I'm hearing them right now... Ha!
I hope you all have a rotten holiday! Drive drunk and die, you hear me?!
The ***** from Hell

MEMO: December 14th
TO: ALL EMPLOYEES

I'm sure I speak for all of us in wishing Patty Lewis a speedy recovery
from her stress-related illness. I'll continue to forward your cards to
her at the sanitarium. In the meantime, management has decided to cancel
our Holiday Party and give everyone the afternoon of the 23rd off with
full pay.
Happy Holidays.
Terri Bishop, Acting Human Resources Director

IBM Blue Cloud: Internet Style Data Centers

IBM’s Blue Cloud is a platform for cloud-based computing, expected to be available to customers in the spring of 2008, supporting systems with Power and x86 processors.

“Blue Cloud" will allow corporate data centers to operate more like the Internet, enabling computing across a distributed, globally accessible fabric of resources, rather than on local machines or remote server farms.

It is, along with Amazon's Elastic Compute Cloud, a seminal step towards network-based computing architectures. Sun Microsystems was ahead of its time in declaring that the "network is the computer." But cloud computing is going to fulfill the prediction.

Call it "software as a service" if you like. The point is that we are nearing an era where resources will be invoked from the computing cloud using a Web browser. Policies still will be needed to authorize use of specific resources, to be sure. But the larger point is that computing, storage and application resources will reside "in the cloud," and be invoked as required by users at the edge of the cloud.

There are all sorts of practical advantages. Distributed or mobile workers can simply invoke their services and information from where they are, using a standard Web browser. Everyone always will have the latest version, the latest patch, the latest version or update.

Computationally intense activities can be handled by clusters of machines designed for such intensity. Storage can be invoked, not carried; used rather than built.

If a developer needs expensive resources, they can be gotten on a sort of "time shared" basis, rather than on a "build your own computing center" basis.

Blue Cloud will be based on open standards and open source software supported by IBM software, systems technology and services.

The interesting speculation is about how cloud computing might change the way enterprises think about their application and storage architectures. Given the massive increase in the scale of IT environments, one wonders how they'll assess the trade-offs between "building data centers" and "renting reources."

Up to this point, the enterprise data center has been the penultimate computing resource. Might the "cloud" surpass even local and networked data centers?