This white paper spotlights the five essential success factors necessary for Operator CDNs to win new customers and begin the process of validating their competitive advantages.

1. 5 Ways Operator CDNs
Can Land More Customers

2. Introduction
Big changes are afoot in content delivery, perhaps none so important as the
emergence of telecom service providers as content delivery network operators — also
known as operator CDNs or Telco CDNs.
Over 40 operator CDNs have now been deployed or are in development*, lured by the
prospects of greatly reduced transit costs and new revenue streams.
But building out the CDN infrastructure is just the beginning. To be
successful, operators must court and persuade content owners to
become customers; not an easy proposition in a market saturated
with established CDN alternatives.
With this white paper, we will spotlight the five essential success
factors necessary for Telco CDNs to win new customers and begin
the process of validating their competitive advantages.
* source: Informa Research
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3. 1. Demonstrate your CDN’s reliability and quality
If you’ve got it, flaunt it.
Operator CDNs have significant advantages over legacy content delivery networks.
For one, owning your network enables you to cluster points of presence (PoPs) closer
to the end user than third party CDNs can offer. Which means that you should be able
to deliver superior quality of service (QoS) over
the likes of Akamai and Limelight Networks.
Prospective customers aren’t going to take your
word for it, however. You’ll need to demonstrate
your ability to provide measurably better QoS.
If you are a service provider that also operates
an IPTV or OTT service, by all means, start to
deliver that online video content over your own
Telco CDN as soon as possible. Doing so will
benefit you in two ways:
• It will demonstrate the faith that your
company and its subsidiaries have in the new content delivery network; the
proverbial “eating your own dog food.”
• It will also provide an opportunity to work out any kinks in the service and
establish a real-word case study based on empirical evidence. That way, you can
sell a service that’s been proven at scale.
You also need to measure the network performance of your operator CDN service
right from the start so that you can substantiate your claims with objective metrics.
Using Skytide’s real-time CDN analytics and reporting is a great way to do this.
Skytide Insight for CDNs gives you visibility into essential operational metrics like
cache hits and error rates, traffic distribution and volume, capacity utilization and
the billing trends and bandwidth consumption of your customers — with the level of
detail to support performance claims.
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4. 2. Grab a seat at the multi-CDN table
Congratulations, you’ve signed a new customer for your operator CDN. Just don’t
expect to be the only content delivery network that it utilizes. That’s not how things
work nowadays. Content owners are increasingly employing a multi-CDN strategy in
order to:
• Establish a larger, deeper footprint. CDNs often
have varying levels of geographic concentration. As
online video traffic spikes in different parts of the
globe, a content provider utilizing a multi-CDN
strategy can easily switch between providers to
capitalize on their regional strengths and better
align with demand.
• Spread the risk. If one CDN experiences technical
problems, traffic can quickly be shifted to another.
• Negotiate the most competitive prices.
Content owners gain leverage by having multiple
CDNs compete against each other to assure aggressive
pricing.
To thrive in this multi-CDN environment, Telco CDNs should:
‣ Have a program in place that routes traffic to backup CDNs in times of trouble.
‣ Go to market in partnership with multi-CDN control software vendors to assure
integration and compliance.
‣ Implement such software as an internal fail-over mechanism invisible to your
customers.
‣ Bid for part of a customer’s CDN business but request commitments of additional
business if you achieve certain service level agreement (SLA) milestones.
‣ Utilize analytics that provide visibility into service quality — like requests by
status code and cache status — that can be used to quickly pinpoint and remedy
problems (and preempt your customers from shifting service to a one of its other
CDNs.) Only Skytide can provide such multidimensional insight.
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5. 3. Establish a dedicated and trained sales force
Contrary to popular wisdom, if you build a better CDN the world will not beat a path
to your door. Building a superior content delivery network is just the beginning.
You will be competing with established CDNs that have battle-tested sales teams that
have cultivated long-standing relationships with the customers you covet. To secure a
piece of this business, you will need to:
• Establish a dedicated sales force and task
them with the goal of leading prospects
through the purchase process. Don’t expect
your operations team to handle the sales
effort. They are two very different
disciplines.
• Assemble a team of experienced sales
professionals and equip them with the tools
that they need to successfully sell your CDN
service. The competitive environment is
fierce; established CDN providers will not
cede business without a fight.
• Demand training from your technology vendors on the features that differentiate
their platforms and the competitive advantage that those features will provide
you against incumbent CDNs.
Skytide provides your sales team with the tools to persuasively communicate the
advantages of your CDN analytics & reporting — powered by Skytide — over pure-play
CDN providers. We have an established program to thoroughly train your sales team,
complete with all the support materials you need to easily integrate it into your sales
process including: RFP templates, data sheets, demo scripts, white papers,
competitive comparison matrixes and more.
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6. 4. Don’t go it alone
Established pure-play CDNs have a head start. The biggest of these players have
significant global coverage and the ability to provide content owners with “one stop
shopping” — a single contract and bill, one SLA to validate, a single source for
maintenance and support, and a centralized set of reports.
To neutralize these head start advantages, many service providers are banding
together to create CDN federations that
formalize the process of interconnecting their
content delivery networks.
Get involved with as many CDN federation
planning and standards groups as possible to
credibly demonstrate that you are putting CDN
federation on your roadmap. Even federation
with CDNs that have overlapping footprints can
be of benefit since it can provide your
customer a perceived “safety net” when
putting some reliance on your CDN.
Skytide is federation-ready. The Skytide Insight for Federated CDNs analytics and
reporting solution:
• Can process the huge volumes of data that a CDN federation will generate and
transform it into finished reports within minutes.
• Can provide the level of richness and granularity necessary to properly allocate
costs and revenue, comply with SLAs, and supply the meaningful insights
needed to operate a multi-organizational business.
• Enables you to provide secure portals to each of your customers so that they
can access data specific to their own operations. You can also provide
individualized access to business partners such as resellers, content syndicators
or company subsidiaries.
• Is customizable and extensible, and accommodates rapidly evolving business
models.
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7. 5. Price aggressively
The surge in online video traffic, projected to increase at a compound annual growth
rate of 32% through 2015**, has also ushered in a slew of new content delivery
networks. This swell in traffic has triggered volume discounts by rival content delivery
networks. Add an influx of new CDN providers to the equation and the
result is a buyer’s market for content owners, with entrenched
competitors offering rates as low as 1¢ per gigabyte.***
All of which means that aggressive pricing is a must if you are
to get a foothold in the market.
Because the cost savings derived from reducing transit volumes
across your network are so great, you shouldn’t let revenue goals stop
you from on-boarding content owners — even if that requires an
aggressive pricing strategy. This is especially true at off-peak times
when you have excess unused capacity.
Skytide can help you to optimize your pricing to compete effectively.
For instance, our real-time analytics and reporting can help you to measure how much
traffic your CDN offloads from its network. Skytide can also help you to identify
which time periods are peak and off-peak for each PoP and geographic zone.
** source: Cisco Visual Networking Index
*** source: Dan Rayburn, StreamingMediaBlog.com, 8/2/11
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8. Conclusion
Deploying a content delivery network is a significant accomplishment but it is only the
first of many challenges for operator CDNs.
To successfully compete against established CDNs for business, operator CDNs must
deliver on five essential elements necessary to win new customers and begin the
process of validating their competitive advantages.
1. Demonstrate your CDN’s reliability and quality, testing it on your own IPTV or
OTT service first if that is an option.
2. Put a plan into place to position your service as part of a content owner’s multi-
CDN strategy.
3. Establish a dedicated and trained sales force and equip them with the tools that
they need to succeed against formidable competition.
4. Get involved with as many CDN federation planning and standards groups as
possible to credibly demonstrate that you are putting CDN federation on your
roadmap.
5. Price aggressively because the cost-savings alone from reduced transit volumes
coursing your network will justify on-boarding new customers.
Skytide’s real-time CDN analytics and reporting can be a key component to fulfilling
on these five drivers. To learn more about Skytide, visit www.skytide.com.
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