Limelight announced today that CFO Matt Hale would be leaving the company at the end of this year. While the release says he will leave at the end of December, it is expected that he will be relieved of duties as soon as a replacement is found. I expect Limelight will probably hire a new CFO in a matter of weeks and make the transition as soon as possible.

While I would not normally post on the changing of a CFO, in this case, I think it is relevant for a few reasons. Matt has been at Limelight pre-IPO and I think it was time for a new CFO to come in who is willing to take a few more risks and try and make some major moves. Limelight needs to be more aggressive in M&A, marketing and the potential sale of the company. Bringing in a new CFO who is going to let Limelight spend more marketing dollars and drive more M&A discussions is exactly what Limelight needs right now.

This is also a chance for Limelight to try and improve their reputation on Wall Street. While replacing one person is not going to do that overnight, if Limelight has a plan in place to do more than just change the CFO, like give out additional data points about their business, more on Wall Street may take notice. I’m not implying that all of a sudden they will have faith in the company, but they may be more willing to keep a closer eye on what Limelight is doing and take more of an interest. Limelight has to do something with regards to Wall Street and needs to be more visible and get investors excited again about the CDN industry as a whole. Start out with where the industry is going, what the potential is and then drill down on how your company might make an impact.

I also think that if Limelight does not show some revenue growth within the next two quarters, the board will make more changes at the executive management level.

A lot of vendors ask me who they should be targeting when they are calling into companies looking for the decision maker or buyer of online video products and services. While many companies all have different folks who sign the contact, many people inside the organization tend to be involved in the decision making process, especially when you are selling into the enterprise or education markets.

Based on many of the job titles I see each day, here are the 50 most common titles I come across. While there are many more than these, it’s a good start for someone new to the market or looking to spend marketing dollars specific to job titles.

• Senior Vice President, Digital Media Technology
• Director, Educational Technology & Distance Learning
• Senior Director Online Digital Properties
• Multi-Media Support Specialist
• Strategic Media Development
• Webcast Operations
• Multimedia Technologies Manager
• Academic Media Producer
• Streaming Project Development and Content Manager
• Digital A/V Production and Support Specialist
• Senior Manager, Digital Video Publishing
• Director Media Laboratory
• Director Advanced Media
• Rich Media Engineer
• Manager Digital Content Delivery
• New Media Product Manager
• Digital Media Solutions Manager
• Media Production Specialist
• Sr. Manager, Online Event Marketing
• Streaming Media Evangelist
• Lead Multimedia Engineer
• Streaming Media / Webmaster
• Distance Learning Specialist
• Live Events Producer
• Media Specialist Manager
• Director Of Technical Operations
• President of Digital Media Solutions
• Director Office of Information Technology
• Director of Digital Media Business Development
• Advertising Sales Digital Media
• VP of New Media
• VP of Creative Media Services
• Streaming Media Manager
• Director of Interactive Entertainment
• Director of New Media
• Digital Media and Entertainment Specialist
• VP Product and Technology
• Broadband Producer
• VP of CDN Services
• Technical Webcast Advisor
• VP of Media
• CTO and Executive Vice President
• VP of Technical Operations
• Managing Video Director
• Digital Program Manager
• Media Systems Engineer
• Senior Producer

Today, PEW released new data talking to the broadband growth rates in the U.S and way too many bloggers and news sites are writing headlines like "Broadband Internet Adoption Stalls", which is inaccurate. Some new sites start off by saying things like "Broadband growth in the United States has
effectively stalled over the past five months…." But then when you
read the PEW release, it turns out it has grown in three out of four
segments. So it is not fair to say that it has "stalled", as a general
statement. Yes, it has stalled for those with income under $20k a
year, but then say that in the text up-front, especially considering
the three other segments all saw growth of at least 23%.

The PEW data and report is very clear and the numbers speak for themselves. Yes, news sites want to spin the numbers in their favor to make grand headlines, without taking all the data into account. This report seems very similar to the one
that many people in our industry seem to want to quote that says the U.S. is
15th out of 30 countries in broadband adoption. That could not be further from the truth.

The PEW report is the first one I have seen to really address the EVDO
and WiFi connections, which clearly are showing a lot of growth. As
much as people want to say the U.S. is lagging behind in broadband
growth, the fact remains that the U.S. has more broadband connections, over 100 million, than anyone else. The U.S. got the top ranking from the World Economic Forum
calling our Internet infrastructure one of the world’s best and Verizon
alone, has more fiber customers today than exist in all of Europe.

Data from Verizon also says that "more than three-quarters of American
households have access to at least two different broadband platforms,
and many have six or more choices — whether it’s FiOS, U-Verse, EVDO,
Wi-Fi, DSL, or cable". That’s more broadband options that any other
country has. And one of the biggest problems with the reports that
compare the U.S. to other countries is the fact that none of them take
into account the differences in geography and population density that
make it nearly impossible to compare one country to another and don’t include WiFi connections.

In addition, PEW and others don’t take into account upgrades that Verizon or others make in their network for current
customers. When I started with Verizon, I had a 15Mbps connection. Over
the past few years, it’s been upgraded to 20Mbps. Yet, since I am not a
"new" customer signing up, my increase in speed is not shown in the PEW
report as they are counting new broadband subscribers only. I’m not a new
subscriber, but I have a faster connection which should account for
something.

Also, most of these reports only take into account wired broadband connections to the home. What about broadband connections for small businesses, where a lot of people access the Internet every day? Or from an enterprise? If we are trying to get a true picture of how people access the Internet, then connections at small businesses, of which there where over 30 million in 2007, have to fit into the overall picture. Why aren’t those included? Many people spend the majority of their time on the Internet during the day, from work. Why is it that the home market for broadband seems to be the one that we look at, by itself, and then devise all of our statistics from that one segment?

Some sites are also saying that, "broadband growth over the previous 12 or 13 months has dramatically tapered off." From 2006-2007 broadband growth was 12% and from 2007-2008 it was 17%. The PEW report says the growth was "comparable" yet many took that to mean slowing. Why is 5% growth year over year considered slow? And how can you say what the true growth rate for 2008 is when the year is only half over? If you are dealing with numbers and data, give it to your readers straight. Don’t try and make it sound worse or better than it is just to make a good headline. The data speaks for itself.

The drawing for the Roku Netflix Set Top Box is now over. Congrats to Robert Schumann who was selected as the winner using a random number picker website. I should have another set top box related product giveaway later in the week.

When Akamai sued Limelight Networks over patent infringement, many speculated that customers would shy away from Limelight and that it would be hard for them to sign new business going forward. While Limelight’s revenue has been flat for the past three quarters and it has had to focus some of its attention on the legal proceedings, Limelight is still signing new business and expanding their relationships with current customers.

This morning, Limelight announced some traffic numbers for a special online Disney event where users could watch the full-length Disney Channel Original Movie “Camp Rock.” What wasn’t mentioned in the release is that the Disney Internet Group, which Limelight has worked with for the past few years, has just recently expanded their relationship with Limelight and renewed their contract for content delivery services across many of Disney’s online properties including Disney Online, ABC.com, ESPN.com, Club Penguin and others. Limelight will be providing a variety of CDN services for on-demand video delivery, webcasting events, website acceleration and professional services.

I have also learned that Microsoft, which already has a 5-year deal with Limelight, has just recently expanded their contract with Limelight for a large volume of additional services. Terms of the new business were not disclosed to me but I expect we’ll hear more about it on Limelight’s next earnings call. I also see that about two weeks ago, Limelight launched a new blog on their website at blog.llnw.com

For me, I’m not surprised to see Limelight still signing new business. Over the past 10 years there have been numerous CDN patent suits across a lot of companies and to date, no CDN has even been shut down and had to turn customers off. I have yet to hear of any CDN customer who has ever been affected by any of the suits and while I’m sure many customers are interested to see what happens in court, it’s still about running their content business as usual.

Yesterday, there was a lot of talk about AT&T and their CDN announcement and as usual, a lot of questions, mostly from Wall Street, on what this means to Akamai and the rest of the CDN industry. While many sites covered the news, I saw very few sites give more details on what, if any, impact this has on the market. Lots of re-hash of the press release with very little additional info or data to compare AT&T’s plans with the rest of the market.

To me, the important take away of the announcement was AT&T’s appointment of Cathy Martine as the executive vice president of Content Distribution. AT&T has had technical folks working on their CDN offering since last year, but to date, did not have anyone leading the business. It’s really hard to start any new product offering in the market if no one is responsible for it on the business side, which AT&T now has. A 25+ year veteran at AT&T, Cathy formerly launched and ran their VoIP product line but will now focus solely on the CDN business. Late yesterday, I had a chance to speak to Cathy and some of her technical team to get my questions answered.

A lot of news sites and blogs had some pretty big headlines about how AT&T is going to challenge Akamai and Limelight with their CDN offering, but those are just headlines, written to make noise. The fact is, Cathy and her team were very realistic in knowing that you don’t build capacity overnight and challenge the leaders in the market with a press release. They know it will take time to build out the right level of capacity and additional services around the product offering before you can compare yourself to leaders in the industry. At no time did Cathy or her team call out Akamai or Limelight in my conversation with them or make wild claims about dominating the market.

On the call, AT&T clearly understood what it’s limitations are today with their offering and how they will stack up against other competitors by the end of the year, when their initial build-out is complete. As I reported in May, AT&T plans to have 400Gbps of global capacity for all of their CDN offerings by the end of the year. To put that in perspective, that would be 20% of Limelights capacity today and less than 25% of Level 3’s CDN capacity. Wall Street analysts, I love ya, but please, keep things in perspective.

The idea that AT&T is going to put any of the other CDNs out of business or grab a lot of market share anytime soon, will not happen. That’s not my opinion, it’s fact, based on their current product offering and the amount of time it takes to really build out a competitive service. Could AT&T be a real competitor sometime next year? Yes. But to what degree, with what level of service, in what vertical markets and with how robust of an offering we don’t know, and won’t for a long time. And while today’s announcement talks to the enterprise market, there is no suite yet of solutions specifically tailored to media and entertainment customers and AT&T is not yet in Adobe’s Certified Flash Video Streaming Service provider program. It’s also too early to know what kind of pricing AT&T is going to offer in the market and how they will compare to the competition.

Too many people who watch the CDN market want to talk about capacity and say how easy it is to "turn up" capacity? They say why can’t AT&T build out the same amount of capacity Akamai has within a year? Capacity is needed on many levels besides the pipe. What about the volume of servers needed? For instance, how long do people think it would take to deploy 10,000 servers? That’s not a fast process. Ans what about the capacity for customer service and support? Capacity is not built out overnight and it’s only one piece of what is needed to have a true solution. How do you handle live events, ingressing streams, transcoding video, managing content, provide reporting and do authentication amongst other things. A lot goes into a CDN offering, especially if you want to target Fortune 1000 customers in the long run. AT&T knows that for awhile, they have to target smaller customers,
who have simpler needs and will stay away from any live streaming that
has the potential to have large traffic spikes.

Not to mention you also have to price, package, productize and market the service, something AT&T is clearly aware of. Cathy said that over the next few months, AT&T plans to make it easier for potential customers to contact AT&T and get CDN quotes out the door quickly. That being said, AT&T has a lot of work to do and realistically, in my eyes, it will be a good 18 months before we know if they can seriously challenge any of the top providers. Owning the network is a good first step, but it takes a lot more than
that to be a real competitor. Last year, we had only 3 companies (Akamai, Limelight, CDNetworks) who offer
CDN services doing more than $40 million a year in CDN
revenue.

While Cathy would not give specifics on any potential acquisitions, she did say that AT&T was open mined on any partnerships or acquisitions that could speed their time to market. Now that AT&T has officially announced Cathy’s role, she’s getting a lot of inquires and requests, as expected, from companies who want something from AT&T. We also discussed the current state of the CDN market as it pertains to IP lawsuits and at this time, AT&T said they did not believe that their CDN product offering is infringing on any currently granted patents. That’s an answer I expect any company to give, but the real question, which we will find out at AT&T grows, is whether or not other CDNs think they are infringing.

For now, AT&T is not putting any growth numbers or projections on the CDN business for this year or 2009, which makes sense since they will be spending that time to build out the service. It’s very similar to Level 3’s approach to the market where AT&T wants to control the entire ecosystem for content owners and will have to spend a few years, and more money, to truly build it out. The bottom line is that AT&T is new to the market, just starting to offer their service and is not seriously challenging any of the CDN leaders for the next year.

While AT&T is one to watch, we should also all keep a clear head and not declare other CDNs to be dead just because telcos like AT&T and Level 3 are entering the market. Right now, the telcos are the underdogs and are behind in the market trying to play catch up to CDNs who have been building out and growing for years. The telcos have a lot of work to do, have a lot of money to spend and need to show real revenue before anyone can declare them a winner. It’s also crucial for the telcos to operate their CDN business like a quick and nimble startup if they want to be successful, which is something very difficult to do inside such a large company. It will be fun to watch.

Last quarter, StreamingMedia.com conducted a survey on the costs of CDN services specific to streaming and video delivery. This report is now available for purchase for only $795 and includes all the raw data and summary charts with answers on
pricing trends, traffic growth, contract terms, formats used, bitrate
growth, P2P interest and the most important factors when choosing a
CDN. All the raw data on over 25 questions is included along with pie
charts on each question. (All end-user customer names and company
info has been removed)

I have already released some of the highlights of the report for free here on the blog and you can see some of them below.

• 52% Have No Commit Contracts, 63% Use One CDN Vendor
• 62% of Customers Surveyed Say Pricing Flat Year Over Year
• Price and Customer Service Ranked Most Important
• Reporting and Analytics Number One Complaint of CDN Customers

Rather than only providing the pie charts like most research houses do, I wanted to make sure we provided all of the raw data as well so that you can parse the numbers based on exactly what you want to know. You can break the numbers down based on a specific industry vertical, size of customer or pricing metric used and we’ve kept the report affordable to be able to get it into the hands of as many folks as possible. Anyone who purchases the report will also have access to me to ask any follow up questions or talk through any of the data with me.