P2P Vendors Struggle as CDNs Lose Interest

About six months ago, I was really convinced that P2P might start to get some traction in the new year and that we would see some content owners commit to the technology. But aside from the Pando Networks and NBC deal, as we enter Q2 not much has transpired from the end of last year.

P2P networks are still talking up a storm in every interview I read about how much cheaper their pricing is as compared to CDNs and leading with price as the major value proposition. Most P2P companies are still missing the point that cost is not the only thing customers care about. If it was, then P2P networks would have a ton of business by now, which they don't.

Some are going to say that the announcements we have seen between P2P providers and the likes of Comcast (CMCSA) and Verizon (VZ) are a big deal, but those announcements are more for press than anything else. They are not creating any revenue for the P2P providers in the market, customers are testing the waters with P2P but not committing and most P2P providers are still all using the same marketing message and not distinguishing themselves from one provider to another.

Last year, I thought the biggest push that P2P might get would be from the content delivery networks. As much as some P2P providers think they compete with them, the fact is that P2P providers can't survive on their own. Around Q3 of last year, many of the major CDNs were investigating the purchase of P2P networks, white labeling a P2P based service, or re-selling one of the many existing P2P solutions on the market. Since that time however, the major CDNs have changed their minds and have done almost nothing with P2P.

Limelight (LLNW), Level 3 (LVLT), and Akamai (AKAM) all have no real interest in delivering a P2P based offering to the market at this time. They don't need the product today, the market opportunity is not big enough and even for a company like Akamai who acquired a P2P based company, you wont see a P2P based product from them anytime soon.

Internap announced a deal to integrate Pando Networks P2P solution into their CDN, which was the first non-hybrid CDN to do such a deal, but since that announcement five months ago we have not heard of any customer deployments.

From what I can tell in the market, P2P is not as big of a story as it was at the end of last year. The topic has cooled off a bit except when its being discussed as it pertains to carriers blocking or filtering of P2P based traffic on their networks. Aside from that, customers are not asking me about P2P and 55.2% of those we surveyed about their content delivery needs said they did not plan to even look at P2P as a delivery solution for 2008.

I hate to see how hard it is for P2P vendors in the market as I believe that the technology really does provide value to certain customers and with certain kinds of content. But until the CDNs start to offer P2P as just another one of the many ways they can deliver content, I don't see P2P getting any real traction anytime soon.

Comments

[Richard Schweitzer]

How about a one-liner ID of all those jargon terms for us not so cool people.

[Stosh]

P2P? Is he talking about
Peer-to-peer, a type of ad-hoc computer network
Peer-to-peer file sharing, file sharing on peer-to-peer networks
Point-to-point, a telecommunications term connecting two items
Pay-to-play in gaming, politics, and music
Phenylacetone, a compound used in organic chemistry
Procure-to-pay, a sales & customer service term
People to People Student Ambassador Program, an ambassador program for students
Pin-to-pin, a technique of electrical connections for use with electronics projects where components' pins are soldered directly to each other
Partner-to-partner network, a collaboration portal,
or
Pier to Pub, the largest open water swimming race in the world, held annually in Lorne, Australia.

[User 172919]

P2P in this case means peer to peer

[Jeff Turner]

I think the real question as far as peer-to-peer goes is why on earth would anyone use or download a P2P client unless they can get pirated content. Sharing your hard disk, computer and bandwidth with others is only going to happen if you get something in return and therefore P2P will always be primarily for pirated content. All these authorized systems, like Pando, have little chance of success when you consider it in these terms.

[Steph]

I disagree. P2P has a legal future, not on your computer but on your networked digital media devices. Take the Apple TV for example. Let's say you rent a movie on the iTunes store from the Apple TV. It needs to download to your box and, despite using AKAM CDN, it takes some time. More importantly, it costs Apple money. Now, imagine a P2P network of Apple TVs that all have the movie you want: faster download and virtually free for Apple.

[i stink]

p2p means peer to peer file sharing. For example: bittorrent, limewire, gnutella