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Often outspoken, rarely without an opinion, and indeed, a technology entrepreneur with proven success, it would be difficult to find another character like James ‘the dealmaker’ Segil, president and co-founder of Edgecast Networks in the telecoms market.
While it is clear the publically held companies Akamai and Limelight are largely dominating the CDN ecosystem at present, Segil’s drive, determination and vision has ensured Edgecast, the smallest of the three, is still considered in the same breath as its larger rivals. The company has to date established relationships and secured partnerships with some of the largest carriers in the world to licence its CDN platform.
What is most striking about Segil, and has been since he first began to develop Edgecast in 2004 with his three partners, is his passion for CDN as a technological platform and his belief in the role it plays in the wider telecoms ecosystem.
“CDN plays a critical role in keeping the web up and running. I believe the internet would not have developed as quickly as it has without CDN. There is clearly a push towards rich media and cutting-edge technology which consumers are demanding and that innovative web and tech companies are creating. It is the CDN that steps in to enable the web to deliver content as fast as it does these days.”
The burden of peering
Rich media content is a relatively new platform and a phenomenon that is increasing traffic on networks rapidly – effectively it means there is a sharp navigation away from services that a telco network has traditionally catered for. For Segil, this is where the problem exists for carriers and remains the challenge – for these companies to adapt their businesses for the delivery of content. Presently, the model established by carriers is an interconnection agreement with other carriers to enable the exchange of traffic, largely through an IP-layer.
Through the advent of CDN, operating as its own private network and also by playing a role in proxying as an over-the-top backbone provider, the way traffic moves across the internet, as well as the economics of the internet is changing dramatically. “By establishing a range of peering connections many years ago there is an added burden on the carriers because they are on a settlement free basis,” says Segil. “The fact is the cost of upkeep on these interconnections has dramatically increased compared to the economic benefits or values of having settlement connections.”
He continues: “Effectively, you end up with a lot of arbitrage between the retail and wholesale sides and you end up with certain backbone carriers acting differently in accessing networks so there are a lot of challenges in scaling the internet given all the challenges that exist with peering.” The solution, Segil believes, to replace this dated legacy interconnection structure is of course, CDN.
Building a CDN
Clearly, Segil sees a role for CDN in this industry beyond just providing the cache for internet content. When Capacity interviewed Segil in September on the role CDN plays in integrating content creation with traditional operators his message was clear – any operator that does not invest in content could lose its place in the next-generation ecosystem.
Segil’s stance has slightly changed since then, and while he does not question the value of a CDN platform, he believes it all depends on the amount of scale an operator has, specifically because of the amount of investment required to run a CDN platform. “The top tiers of content distributors like Microsoft, Google, Yahoo!, Apple, Netflix and potentially Facebook are all good candidates for owning and operating their own CDN,” he says. “For these companies it becomes economically beneficial to build out their own infrastructure and get a better cost basis and better control – which on a return on investment analysis yielded a higher return than if they outsource 100% of their CDN.”
Considering Edgecast’s fundamental licensing operation, a trend towards an internal build of CDN is not in the company’s best interests because the larger carriers presently outsource Edgecast’s CDN platform to be deployed on their networks. Regardless, Segil is strong in his views on the role of operators and content creators when it comes to CDN and how they should be integrating the technology on their networks.
“A performance prioritised service like content delivery is not necessarily in the role of a carrier, or the role of a content creator,” he says. “If you want to be good at what you do, and that is to optimise delivery by performance, there needs to be a specific focus and specific investment involved. In its first iteration, CDN was not meant as a standalone business offering. It is meant to enable the content provider to more effectively deliver content. However, I do concede access CDN might very well eventually evolve into a business.”
For Tier 1 carriers and Tier 1 backbone providers, Segil maintains his opinion that CDN is not optional – “every top tier company is investing in CDN and should,” he states. He veers towards a different view in regards to the smaller operators and believes the sheer cost and scale required to adopt a CDN could mean there is sometimes not a business case for the Tier-2 and Tier-3 carriers and regional operators to invest in the technology because their networks do not generate enough content to the caches.
“There are a lot factors involved and a lot of services companies need to be offering before they make this substantial investment,” he says. “Do they offer IPTV? Do they have an association with international transit and how does that affect their networks? How tied in are they with peering agreements and interconnection?” he asks. “If you deploy multiple nodes on networks and reduce the costs through this way then great. If a company is operating within a small geography, but does not have enough end-users or subs in aggregated locations it is hard to justify CDN.”
Efficient use of a CDN platform
The question now for Segil is how the CDN platform can develop and evolve to enable a more efficient service. There is the case to consider that CDN is still relatively premature in its development, and with content continually being delivered on networks by CDNs like Akamai, Limelight and Edgecast, there is a feeling amongst sectors of the industry that certain content types, specifically video, in addition to the CDN relationship with carriers, is not working in the best possible way.
“We have thought long and hard about how to service the carrier community,” says Segil. “Running and managing a CDN is a complex business, and while we are a profitable company, as an operator we have had some harsh lessons in this sub-sector, and tried to pass these on to our carrier customers. Scaling the internet is the biggest challenge, especially with the amount of demand coming in from the end user.
We are seeing, in real time, the effect of HD and IPTV along with the onslaught of mobile which is what we need to tailor our offering towards to accommodate such services. But I must stress, while the CDN is an important component to deal with this, it is not the only component. There is a lot of innovation occurring in terms of routing and the fabric of how carriers and systems interconnect in terms of optimisation and upgrades of network from a 10Gbps standard to a 100Gbps standard – that is going to help.” Segil believes the next step for CDN to provide better scale for the internet is by offering an open access wholesale platform, with Edgecast driving development towards this.
“The open CDN platform works to interconnect and federate traffic between any operator that licences our technology and deploys it, and any other carrier that has licenced our technology and deploys it. Through this, it enables the carriers to buy and sell capacity on a wholesale basis from one another,” says Segil.
“As we add additional carriers to our alliance of this open CDN it enables further deals and trades. This is the first iteration of the exchange. The second phase is to enable an interconnection with third party caching appliances, for us to connect to Cisco, Alcatel-Lucent or Juniper, which will also enable an exchange of CDN capacity with our own platform.” He continues: “This phase brings together a carrier community and a software vendor community – ultimately enabling a faster and more efficient access to the services the end-user now demands.”
Edgecast Networks
History: The company was co-founded in 2006 by technology entrepreneurs Alex Kazerani, James Segil, Phil Goldsmith and Lior Elazary.
CEO: Alex Kazerani.
Ownership: Privately-owned.
Customers: Edgecast directly connects to 1150 user networks. The company has also signed peering agreements with many of the major carriers including Pacnet. Edgecast has 3000 customers including: IMAX, EMI music publishing, BREAK.com, Gawker, Wordpress, Tumblr, Kelloggs, Widgetbox, Linked-In, ESPN and Yahoo!
Network: Edgecast has a global footprint with 21 PoPs covering four continents. Locations include; Atlanta, Chicago, Dallas, Los Angeles, Miami, New York, San Jose, Seattle, Washington DC, Amsterdam, Frankfurt, London, Madrid, Paris, Hong Kong, Singapore, Tokyo and Sydney.
Products and Services: Whole site acceleration, software distribution, E-commerce, wholesale CDN, caching, application delivery, streaming, analytics, storage, cloud storage, data centre and security.
