Last week seemed to be the week of many CDN rumors, one of which was Microsoft being interested in buying Limelight Networks. While I have no idea if that is the case, the blog posts and articles that followed the rumor were a great example showcasing how many people really don’t understand the product offering that the different CDN providers have in the market today. Too many are still comparing one CDN provider to another unfairly. The term "content delivery" is used way too generically these days and folks tend to speak to it as if it covers every type of content under the sun, even when it doesn’t.

Update: I am getting a lot of comments from those who are saying that Limelight does lots of other kinds of delivery and my choice of the word "only" is incorrect. While I know they do some, the majority of what they deliver is video and rich media content. But I did contradic myself when I said "only" video but then also said "mostly" video in another post. To be exact, I should have said "mostly" video in this post as well.

Numerous blogs all talked about how it would make sense for Microsoft to buy Limelight Networks so that Microsoft could accelerate it’s own CDN build-out. SiliconAlleyInsider.com speculated that, "perhaps it (Microsoft) believes Limelight’s infrastructure and expertise will help accelerate its transition to cloud computing. Specifically, instead of buying CDN services from Akamai, et al, Microsoft could now float MSN, Office Live, Silverlight, and other Software-As-A-Service products on top of the Limelight infrastructure." How is that? Limelight Networks does not offer application delivery, software as
a service, static caching and most other forms of content delivery over their network today. Limelight specializes in running a network that is optimized specifically for the delivery of video content only. So Microsoft acquiring Limelight does nothing in the way of advancing their "cloud computing".

On the same day of this rumor, DataCenterKnowledge.com reported on some of the details surrounding the build-out by Microsoft of it’s own "edge network". This gave some good insight into what Microsoft is working on however, the Microsoft person quoted in the post never used the word video. They said "edge network". Most video delivered on the Internet today is not delivered from the edge and most video is not cached like many seem to think. So what kind of content exactly is this Microsoft network going to deliver? I’d love to see a follow up story by DataCenterKnowledge.com talking to that.

Around the same time as this rumor, GigaOM.com ran a short post about Limelight’s share price and revenue guidance and said, "Limelight
spends about 60 cents on every $1 it earns just to provide service,
whereas Akamai spends about 30 cents, I’m not sure how low Limelight
can go. Or for how long." Yes, those numbers are correct, but not
in the context they reported them. No one knows how much it costs
Akamai to operate their network specific for video since they delivery
many kinds of content. Again, Limelight delivers only video, so
comparing Limelight’s costs to deliver one kind of content, to Akamai’s
costs to deliver many kinds of content, is not a fair comparison. Using
those numbers in that context is just plain wrong and set expectations wrong in the market.

I’ve said it many times before on my blog, you can only compare the CDN service from one company to another and not the companies themselves. The CDNs are out in the market making very clear statements about what they do and do not offer, yet it seems like no one wants to listen. At Akamai’s recent analyst day, what did they focus most of their time on? Not CDN, but application delivery. They are trying to tell the market they do more than just content delivery of static images and video content. Limelight on the other hand is trying to educate the market about how they only delivery video and are the specialists when it comes to that kind of content. Level 3 is focusing on offering a bundled service of transit, co-lo, static CDN delivery, streaming etc…. same with Internap who is focusing on multiple products. In most cases, the CDNs are delivering a clear message to the market on what they do and do not offer in the way of a product portfolio yet it seems very few are paying attention to that and have a clear grasp of the products that make up the numbers.

All week long I’ve gotten lots of questions about Apple’s new movie download service and what this means to Akamai. There is a lot of speculation out there about Apple’s new service, but now that it has been officially released, I’m not sure why analysts who cover Akamai are so concerned about the impact they think this has on Akamai?

For starters, we all think that Akamai is delivering this content, but I have yet to hear anyone from Akamai confirm this in any public forum. Be that as it may, lets assume Akamai is delivering this content for Apple. What’s the big deal? This is one customer, adding a video offering to the market that is anything but mainstream. Akamai is not going to be delivering so many movies over the next 2 months that it’s going to have any large impact on Akamai’s earnings for Q1. Apple’s new movie service is anything but mainstream and won’t me mainstream anytime soon. For starters, the service has a very limited library and the content only last 24 hours, which is going to turn a lot of people off. You can’t transfer any of the videos to any iPod except for the absolute latest versions, the HD movies are not available expect when rented from an Apple TV device and for all of Apple’s talk about their new MacBook Air, who’s going to rent a movie to play back on that thing when the speakers in the new laptop are only in mono?

Bottom line, the new Apple movie rental service is a start, but it’s not going to revolutionize the video market for movies anytime soon. Widespread adoption won’t happen when you need a device to rent movies and when the amount of time you can watch them for is so limited. The number of Apple TV’s that have been sold is very small and even if Apple sells a few million of them this year, that’s anything but mainstream. Analysts know that the way any company like Akamai grows is by signing up many new customers or upgrading many current customers each quarter. Rarely does one customer have a direct impact on any vendor that results in a big spike in revenue in such a short period of time.

That’s not to say that a new service like this by Apple is not good for Akamai or any CDN in the long run, but it is way too early to tell what real impact it will have on revenue and we won’t be able to judge that impact for many quarters to come.

Swiss American Securities just called me after reading my blog post to let me know that they have no record of anyone at Swiss American Securities saying that Apple plans to drop Akamai and switch to Google for their content delivery.

Many analysts all sent me the same supposed quote this morning from Swiss American Securities but interestingly enough, no one seems to know where the quote actually came from, who said it, and where it was first reported.

Another reason why I am glad I am not a financial analyst. Way too much speculation without facts.

That’s the question that dozens of people have been speculating on and asking me about this morning. Swiss American Securities, a division of Credit Suisse is saying that it has learned that Apple will no longer use Akamai. They see Apple dumping Akamai for a Google-based content distribution network and expect Apple to announce that next week at Macworld.

I don’t have any details on this "rumor" either way, but I highly doubt it and don’t believe the information. Apple has spent many years working with Akamai to get the iTunes service down to a science and Akamai has a large infrastructure in place specifically for delivering live QuickTime content. I don’t see Google building out a QuickTime infrastructure and supporting the kind of delivery Apple needs. I know many will say they are Google, they can build anything they want. Yes, they can, to a degree. But what would Google get from delivering Apple’s content? How does this tie into Google’s core advertising business? And what does Apple get from this? Maybe a lower price but it would have to be more than that for Apple to move CDN providers.

I just don’t buy it. I don’t see any value that Google or Apple would get from doing this. Now Apple could work with Google on some video initiatives and partner on things for the iPhone, Apple TV and what not, that would not surprise anyone. But replacing Akamai for Google for all of its content delivery, I don’t see the rationale.

There was an Apple RFP out in the market a few months back for some CDN business, but it was not for all of their content, was not a large deal and from what I understand, Apple pretty recently re-signed with Akamai.

UPDATE: Drawing is now closed. Tom Russo was selected as the winner using a random number picker website.

I have a brand new TiVo Series 2 DVR that TiVo sent me that I no longer need as I have upgraded to Verizon’s FiOS TV service with their DVR. The unit records 80 hours and is brand new, with remote, but not with the original box or manual. No service is included, you will need to pay the monthly TiVo service fee.

To qualify to win the unit, all you have to do is leave one comment on this post with a working
e-mail address. I will pick one user a week from today using a random number picker website and
ship it out to the winner at no cost.

If any company is interested in getting exposure for their video
related product on my blog and is willing to give away the product, contact me.
I will post pictures of the product, link to the company website and
either write a product review or link to other reviews on the web. It’s
great exposure on a blog that does over 300,000 page views a month.

Over the past few years, the Streaming Media East and West shows have been growing nicely for us on all fronts and in particular the conference side of the business. We now produce three major shows each year in NY, CA and London. Combined, these shows average over 300 speakers and 75+ sessions that I have to develop programming for.

I am looking to hire someone who is interested in helping me plan and shape the conference agenda for the NY and CA shows and be a co-chair of the show. This is a highly visibility position which will put you in front of a lot of industry people, get you major exposure and give you first-hand experience in what it takes to produce a major conference. You will also have an opportunity to help educate and shape the industry based on the agenda you help develop.

The work involves helping to plan and write session topics, organize and outline the major subjects that need to be covered, invite and confirm speakers, work with moderators and helping with online marketing and promotion. It’s the type of job ideal for someone who wants more exposure in the industry, has industry contacts, knows what the hot topics are and is not afraid of speaking in front of an audience. I am looking for someone who loves this industry as much as I do and takes pride in wanting to help educate and grow the industry for everyone’s benefit.

This is a part-time opportunity and can be done remotely. The majority of the work is done within a month’s time frame and then there is a lot of follow up work for a few months until the show. It’s mostly lots of e-mails and some phone calls.

If you are interested, please reach out to me and let me know in detail what your expertise is. Please keep in mind, this is the type of job that you have to love to do in order to program a really great conference. You don’t need to eat, sleep and breathe online video as much as I do, but you really have to be into it or else it shows in the program.

I am constantly asked by people how I got my name out there, how I branded myself and what it took to get involved in so many facets of the online video industry. This is a great opportunity for the right person to start to brand themselves if you are organized, write well, have the pulse of the industry and are good at doing smart marketing and promotion. If that is you, please contact me.

I’ve gotten a hold of the filing and all of the documents associated with the Level 3 patent infringement suit against Limelight Networks as it pertains to Limelight’s CDN offering. (Download Suit)

The filing talks to four CDN specific Level 3 patents including 6,185,598 – 6,473,405 – 6,654,807 – 7,054,935 some of which were originally granted to Sandpiper Networks back in 1998. After quickly reading through all of the documents two major things come to light.

The first is that the filing states that Level 3 sent Limelight a letter in February of 2007 informing Limelight of various patents owned by Level 3 that pertain to content delivery. Level 3 believes that after Limelight received knowledge of these Level 3 patents that Limelight did not re-design its CDN offering to avoid the claims of the Level 3 patents. While I don’t expect Limelight to be able to talk about the suit publicly, the fact that Limelight had knowledge of the patents for nearly all of 2007 and didn’t feel the need to license the patents from Level 3, that would leave one to think that Limelight feels it is not infringing on the patents or feels strongly that the patents will not hold up in court. UPDATE: On Monday Dec. 31st, Limelight issued a statement saying they "believe that these allegations are without merit, and intends to defend itself vigorously."

The second thing to note in the filing is that Level 3 says it is suffering damages in "an amount not yet determined" and as of the filing, Level 3 is not asking for any specific amount in damages.

For those who I know are going to ask, I don’t expect this suit to stop any potential customers from using Limelight networks. The CDN space has seen many patent suits over the past 10 years and typically, customers don’t have any real concern as nearly all of the major CDNs have gone through patent suits at one time or another.

Note: While I have worked as a consultant and expert witness on various patent suits pertaining to IP based video, I am not working on this case and have never worked on any lawsuit involving any content delivery network.