Major CDNs to Add P2P Capabilities

The potential of peer-to-peer (P2P) technology for large file delivery has been well documented for some time. What's been less clear is how and when P2P would impact the commercial content delivery network (CDN) market. Thus far the disruptive potential of P2P has been offset by technical and security considerations of the enterprise businesses that represent the most significant chunk of the commercial CDN market.

A tipping point for the P2P and CDN markets appears at hand, according to Dan Rayburn at the Business of Online Video blog, who reports that major content delivery providers are adding peer-to-peer capabilities. Dan writes:

Dan's pretty plugged into the CDN market, and while he's not naming names, he says the new services will likely be announced in the fourth quarter and launch in early 2008.

Rayburn sees the CDNs' integration of P2P as a positive step, as it allows the industry to focus on using the best technology for a particular delivery task, rather than a controversy over which protocol is being used. VeriSign was an early adopter of this approach with its Intelligent CDN, which builds on its acquisition of the KonTiki P2P platform.

The latest news raises the prospect of more deals, as CDN companies looking to add P2P capabilities may find it easier and faster to buy than build. Akamai acquired P2P specialist Red Swoosh in a $15 million deal in April. P2P-focused CDNs with visibility include CacheLogic and Pando (see NewTeeVee for more).

Will the CDNs' integration of P2P impact demand for data center space? Content delivery networks are significant colo and peering customers for major players in the data center space, making a large-scale shift to P2P technology a potential demand issue. My hunch is that many large customers still have reservations about P2P, and the adoption of P2P technologies by CDNs is a strategic move to blunt the competitive threat from pure-play P2P CDN providers, rather than a wholesale shift in delivery methods.