This morning, via an e-mail to Web Services customers, Amazon (NASDAQ:AMZN) announced a new content delivery offering under development that they expect to make widely available before the end of the year. While the initial content delivery offering won't compete with the major CDNs like Akamai (NASDAQ:AKAM) and Limelight (NASDAQ:LLNW) when it is released, it has the potential to down the road if Amazon adds some specific product functionality.
Over the past few months, I have been speaking to Amazon about the content delivery market as a whole and about their new offering. As a result, I am under NDA and am not at liberty to disclose many of the details of the new offering, which Amazon will release when the service is available in a public beta shortly. That being said, there are some details I can talk about now including some of the functionality of the product.
When released, the yet to be named product offering will offer HTTP only delivery for objects, both video and non-video related. The offering won't support streaming, live broadcasting, or provide many of the other products and services that video content owners need. While those are potential features that Amazon may offer down the road, the real story here is that Amazon is going to offer a high performance method of distributing content with low latency and high data transfer rates. The service will be cheap, rock-solid and targeted to the masses, just like the other AWS products are. While I can't release any details on pricing, the new service will be like S3 and EC2 in that it will require no contracts, no commitments and customers will only pay for what they use. My opinion, customers won't be complaining about the price.
Objects must be stored on S3 and initially, the service will not be able to pull content from origin storage on another network. For some, this will be a deal breaker. But for the average customer Amazon is targeting with this, the S3 offering is cheap and reliable. The network will deliver content in North America, Europe and Asia and additional details on the number of POPs and locations will be released by Amazon at a later time. Amazon is "currently working with a small group of private beta customers" for the new service and will provide more details on the offering very shortly.
While the new Amazon offering won't take any business away from any of the major CDNs for the time being, it will make a real dent in the smaller regional service providers, many of whom focus on HTTP delivery, smaller sized customers and don't support streaming either. For the major CDNs who are helping to not only deliver video, but also supporting functionality like live broadcasting, Flash, Silverlight, transcoding, authentication and reporting and analytics specific to video, the Amazon service won't compete with them, yet. But if you are in the CDN business, you better take note of what Amazon is doing and keep a close eye on their CDN offering as it evolves. If Amazon adds additional video specific functionally down the road and provides the kind of support that large content owners need, specific to video, this could get very interesting.
Even with Amazon not going after the really large business that the major CDNs have today, Amazon clearly will be able to dominate the video specific business that requires no complex needs, only requires downloads and needs quality delivery at a cheap price. There are two kinds of CDN customers for video delivery today. The major ones all need a lot of additional services and support and don't buy on price alone. But the other kind of CDN customers are those who have very commoditized requirements and typically buy solely on price, which is exactly the kind of business Amazon can win.
While there are already over 50 CDNs in the market today (www.cdnlist.com), Amazon is the most recent entrant who really has the ability to shake up the market and make content delivery a very straight-forward and easy to use service, for a large segment of customers. I'm excited to see what Amazon does with the new offering and if they can act as the catalyst to really push content delivery to the next growth level, which would be good for all vendors. I know some will worry that Amazon will simply take business from other CDNs, but think of the bigger picture here. That's the story, the long term impact Amazon could have on the market.
Below is the e-mail sent to AWS customers.
Dear AWS Customer:
Many of you have asked us to let you know ahead of time about features and services that are currently under development so that you can better plan for how that functionality might integrate with your applications. To that end, we are excited to share some early details with you about a new offering we have under development here at AWS -- a content delivery service.
This new service will provide you a high performance method of distributing content to end users, giving your customers low latency and high data transfer rates when they access your objects. The initial release will help developers and businesses who need to deliver popular, publicly readable content over HTTP connections. Our goal is to create a content delivery service that:
- Lets developers and businesses get started easily - there are no contracts, and no commitments. You will only pay for what you actually use.
- Is simple and easy to use - a single, simple API call is all that is needed to get started delivering your content.
- Works seamlessly with Amazon S3 - this gives you durable storage for the original, definitive versions of your files while making the content delivery service easier to use.
- Has a global presence – we use a global network of edge locations on three continents to deliver your content from the most appropriate location.
You’ll start by storing the original version of your objects in Amazon S3, making sure they are publicly readable. Then, you’ll make a simple API call to register your bucket with the new content delivery service. This API call will return a new domain name for you to include in your web pages or application. When clients request an object using this domain name, they will be automatically routed to the nearest edge location for high performance delivery of your content. It’s that simple.
We’re currently working with a small group of private beta customers, and expect to have this service widely available before the end of the year. If you’d like to be notified when we launch, please let us know by clicking here.
The Amazon Web Services Team