Amazon (AMZN) announced the roll-out of its long-expected content delivery service, calling it “Cloudfront.” One common reaction: The service will disrupt CDN leaders Akamai (AKAM) or Limelight (LLNW). Not immediately.
Why? Our own Dan Frommer laid out the case in September:
Amazon.com is jumping into the content delivery network market. Smart move. But it won’t be a significant threat to industry leaders Akamai or Limelight 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.
Frommer adds: Moreover, the type of customers that use Amazon Web Services and who might use Amazon’s CDN aren’t the kind of customers that Limelight or Akamai’s sales force are interested in signing up. They’re much more interested in big media and enterprise customers who need the capacity they offer, and who spend thousands of dollars a month on CDN service. Not small-time startups.
NOW WATCH: Tech Insider videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.