Amazon’s (AMZN) CDN Won’t Kill Akamai (AKAM), Limelight (LLNW)

Image (AMZN) is jumping into the content delivery network (CDN) market. Smart move. But it won’t be a significant threat to industry leaders Akamai (AKAM) or Limelight (LLNW) any time soon.

That’s because it’s not supposed to: Amazon is targeting the users of its other cloud services like S3, EC2, etc. In fact, it requires that its CDN clients use its S3 storage system, which pretty much ensures that it won’t steal any of the CDNs’ huge media and enterprise customers any time soon.

And as industry analyst Dan Rayburn — who’s been briefed on Amazon’s plans — notes, Amazon’s service won’t help with “live broadcasting, Flash, Silverlight, transcoding, authentication, and reporting and analytics specific to video” — all features that the big guys offer. 

So while Amazon could easily build out these services to compete with Akamai and Limelight down the road, its initial push will be to steal customers away from smaller CDNs like Cachefly, BitGravity, or Panther Express — full disclosure, a company we share investors, a chairman, and office space with.

Most telling: Whether Amazon will eventually move its video on demand streaming service or MP3 download service to its own CDN — or whether it’ll keep using Limelight.

See Also:
Limelight Networks Q2 Solid, Big Spending Ahead
Akamai CEO: Media And Entertainment Business Growing Slower Online
Amazon Launches Video Streaming Service: Look Out iTunes, Hulu, Netflix