Why Cisco Is Building a CDN

According to Dan Rayburn, Cisco Systems (NASDAQ:CSCO, news, filings) is out in the market buying third party datacenter space. Why? To build its own content delivery network.  If one wants to compete with one’s customers, you would think last month’s very public entrance into the server market with its new Unified Computing System would suffice.   But now they are considering taking on Akamai as well? What gives?  Actually, there’s a perfectly logical reason.

Personally, I think this move is akin to Google’s development and release of Chrome. Google doesn’t expect to make money off of Chrome, they only hope to shape the browsers of the future by showing them where they ought to go.  It’s about influence: shepherding an industry they care about so that it goes where they want it to go.  Likewise, any CDN offering by Cisco is unlikely to bring them substantial revenues – it just isn’t big enough.  And with carriers like AT&T, Verizon, DT, and BT entering the CDN space, they would be competing with even more of their own, very large customers.

Rather, if this report is true then what Cisco is hoping to accomplish is probably a live commercial demonstration of where Cisco thinks the CDN of the future ought to go.  This means that they have a strong opinion about what CDNs ought to be doing, and they intend to bring attention to it and to use their influence to push things in a favorable direction.   In parallel, they will have a platform on which they can put their own theories to the test so that they can better serve this market.   So yes, they may build out a CDN, but it won’t be extensive and it is unlikely to be aggressively priced.  Rather, they will seek to shake up the industry in terms of capabilities and technological development.

In other words, what Cisco wants from a CDN probably isn’t to deliver all the world’s video, it’s to be sure that they are the ones selling all the gear to those who do.  Still, it will be quite interesting if they do put one together.

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Categories: Content Distribution · Telecom Equipment · Video