Global Licensed/Managed CDN Market To Reach $60M In 2014

In addition to my role at StreamingMedia.com, I’m also a Principal Analyst at Frost & Sullivan and I’ve recently released my latest report on the size of the “Global Licensed/Managed CDN Market“. The report details the market drivers, restraints to market growth, product and pricing trends, competitive landscape, and market forecasts and trend analysis broken out by region of the world for the next four years.

Outside of commercial deployments, nearly all large scale telcos have already deployed or are building out CDNs internally to handle the flow of video across their network. It’s a move they all had to make for cost savings and quality of experience (QoE) benefits and while most of them are simply deploying boxes from major hardware vendors, or building it on their own, some telcos are working with vendors who offer a licensed and/or managed CDN offering, so they don’t have to start from scratch.

While there was an uptick in the number of Licensed CDN (LCDN)/Managed CDN (MCDN) deals in 2013, the market opportunity is very small, at just over $60M this year globally. The market for LCDN/MCDN services will never be large and there are only a few vendors who even offer the service, with most of them doing it for ancillary benefits to their core business and not for generating a lot of revenue from licensing the software or doing a managed CDN build out. The LCDN/MCDN model is still evolving and its success as a stand-alone offering is still to be determined. The market will never be a large opportunity in terms of revenue, but LCDN/MCDN is starting to become more of a check box for CDN service providers to help strengthen their core business.

The key takeaways from the report are:

• Most telcos and carriers are not expected to offer commercial CDN services, but will likely leverage LCDN/MCDN for internal CDN deployments
• Very few vendors offer a true LCDN/MCDN solution; those who do, provide it as it offers ancillary benefits to their core business
• LCDN/MCDN is a small market today, just over $60M in total revenue with at most, two dozen or so deployments
• LCDN/MCDN offerings are mostly being sold by commercial CDNs, but over time, should be offered by hardware vendors already selling to telcos and carriers
• It won’t take long for LCDN/MCDN to go away as a stand-alone offering and instead, be sold as part of a larger solution set

Copies of the report are available to any customer who has a subscription to Frost’s Digital Media research service and anyone interested in getting a subscription can contact me for more details. Also, while many research analysts at other firms won’t talk to someone unless they are a customer of that firm, I have and always will talk to any company who is interested in getting more details on any aspect of the video, streaming and content delivery ecosystem. You don’t have to be a customer of Frost & Sullivan for me to take your call and do a briefing with you, so call anytime.