The Google CDN

cables

It's perhaps not a coincidence that the Google CDN project is gaining a higher profile just now. Last week YouTube began offering a larger number of videos in high definition (HD), which means it must deliver many millions of videos in even larger file sizes. The leading CDN providers, Akamai Technologies (AKAM) and Limelight Networks (LLNW), have long predicted that HD video would be a game changer for them, fundamentally altering the math of network capacity and shifting more content to CDNs.

Google isn't alone. Microsoft (MSFT) is also working with Limelight to construct its own CDN, which it calls an Edge Content Network. The project is driven by the enormous volume of traffic Microsoft anticipates on its network, as discussed by Microsoft's Senior VP of Global Foundation Services, Debra Chrapaty.

“In environments like ours, we could look at network costs, if we continue to scale and support the world’s data, in the billions of dollars," Chrapaty said last year. "The numbers are really enormous.”

Google's looking at the same numbers, and Amazon has clearly been working on content distribution ahead of the launch of its own CDN offering. The huge players  are not alone, as caching is playing a larger role in the broader Internet economy, as noted this morning by Rob Powell at Telecom Ramblings.

"What has to happen here someday, as content grows and caching becomes all important is that new relationships beyond peering and transit need to evolve," Rob writes. "So where do we go from here?  I wish I knew, I only know that as CDNs become more important, traditional transit and peering become less so. The business relationships between CDNs and ISPs will likely come to dominate the economics of the internet, and right now there are no rules to the new game."