Starting a Business and Running it are Two Different Things

Having been in the CDN business for a few years, I’m always shocked at companies that willingly step into this market. The latest? Google.

http://tech.slashdot.org/story/11/07/28/1232258/Google-Announces-Google-CDN

Although the CDN market is heavily commoditized, that is not the issue. There is plenty of revenue to make in value-added services and, most of all, the expertise to help customers deliver high-quality events.

And that’s the key thing here. Just because you have the servers, the bandwidth, and the software doesn’t mean you can successfully run a CDN. This is a 24/7/365 business. When you are delivering mission critical content (whether web pages or videos), customers want to be assured that there won’t be an hiccups and if there are, knowledgeable people on staff are dealing with it before the customer has to ask. I believe that Google will discover over the next 12 months the operational intensity required to operate a high-performance CDN to content publishers and companies that rely on their websites. We’ve seen it before with companies like AT&T and Microsoft. It simply does not make economical sense to jump into this market unless the CDN portion is simply one element of a larger service offering that helps companies tackle multiple challenges.

Although I appreciate Google’s software, their manpower, their technical and intellectual capital, I don’t believe that using the Google CDN will be the right choice for many customers. It may be like Amazon’s AWS: a sacrifice early on of performance for lower cost.