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Pricing transparency and CDNs

by Lydia Leong  |  December 22, 2008  |  3 Comments

It is possible that I am going to turn out to be mildly wrong about something. I predicted that neither Amazon’s CloudFront CDN nor the comparable Rackspace/Limelight offering (Mosso Cloud Files) would really impact the mainstream CDN market. I am no longer as certain that’s going to be the case, as it appears that behavioral economics play into these decisions more than one might expect. The impact is subtle, but I think it’s there.

I’m not talking about the giant video deals, mind you; those guys already get prices well below that of the cloud CDNs. I’m talking about the classic bread-and-butter of the CDN market, the e-commerce and enterprise customers, significant B2B and B2C brands that have traditionally been Akamai loyalists, or been scattered with smaller players like Mirror Image.

Simply put, the cloud CDNs put indirect pressure on mainstream CDN prices, and will absorb some new mainstream (enterprise but low-volume) clients, for a simple reason: Their pricing is transparent. $0.22/GB for Rackspace/Limelight. $0.20/GB for SoftLayer/Internap. $0.17/GB for Amazon CloudFront. And so on.

Transparent pricing forces people to rationalize what they’re buying. If I can buy Limelight service on zero commit for $0.22/GB, there’s a fair chance that I’m going to start wondering just what exactly Akamai is giving me that’s worth paying $2.50/GB for on a multi-TB commit. Now, the answer to that might be, “DSA Secure that speeds up my global e-commerce transactions and is invaluable to my business”, but that answer might also be, “The same old basic static caching I’ve been doing forever and have been blindly signing renewals for.” It is going to get me to wonder things like, “What are the actual competitive costs of the services I am using?” and, “What is the business value of what I’m buying?” It might not alter what people buy, but it will certainly alter their perception of value.

Since grim October, businesses have really cared about what things cost and what benefit they’re getting out of them. Transparent pricing really amps up the scrutiny, as I’m discovering as I talk to clients about CDN services. And remember that people can be predictably irrational.

While I’m on the topic of cloud CDNs: There have been two recent sets of public performance measurements for Rackspace (Mosso) Cloud Files on Limelight. One is part of a review by Matthew Sacks, and the other is Rackspace’s own posting of Gomez metrics comparing Cloud Files with Amazon CloudFront. The Limelight performance is, unsurprisingly, overwhelmingly better.

What I haven’t seen yet is a direct performance comparison of regular Limelight and Rackspace+Limelight. The footprint appears to be the same, but differences in cache hit ratios (likely, given that stuff on Cloud Files will likely get fewer eyeballs) and the like will create performance differences on a practical level. I assume it creates no differences for testing purposes, though (i.e., the usual “put a 10k file on two CDNs”), unless Limelight prioritizes Cloud Files requests differently.

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Category: infrastructure  

Tags: akam  cdn  cloud  llnw  rax  

Lydia Leong
VP Distinguished Analyst
16 years at Gartner
23 years IT industry

Lydia Leong covers cloud computing and infrastructure strategies, along with a broad range of topics related to the transformation of IT organizations, data centers, and technology providers.Read Full Bio

Thoughts on Pricing transparency and CDNs

  1. […] December 23, 2008 by MatthewSacks  In a review about the impact to the technology indusitry from smaller CDN’s such as Amazon’s CloudFront and Mosso’s CloudFiles, she mentions the review of CloudFiles done on The Bitsource blog. Read Lydia’s review here: […]

  2. Cloud9 says:

    I know this article is focusing on the Mosso Cloud Servers, but here’s a heads up on something for Mosso’s Cloud Files.

    I’m sure many of your readers are interested in an easy way to manage their Cloud Files containers and objects .. especially, for those who’d like to have more than one user but don’t want to give out access to their whole admin panel!! There are many options to access Cloud Files by a single user, but we needed a way to create sub accounts, assign containers, etc..

    Enter, Cloud9.
    Cloud9 is a new web-based service that allows users, or Web Designers/Programmers, to manage their Cloud Files more easily. It’s accessible, secure and fast. Basically, it improves upon the Mosso Cloud Files manager in these ways:

    1) Multiple file uploads!! Up to 20 at a time! No more waiting, file after file, or trying to teach our clients how to use Cyberduck / FireUploader, et al. Easy online access from nearly anywhere.

    2) You can create unlimited ‘user’ accounts and give them access only to containers that you assign to them. Unlimited Users, Unlimited Containers.

    3) You, as the admin, stay in complete control over the users, containers, objects (files), etc. You have global read/write/delete access.

    4) Each user can manage their own objects (files), upload/delete, etc. as well as add containers to their user account without taking up your valuable time.

    5) It’s super easy for you and your clients to use.

    6) Each file name listed in a container is pre-linked to the file, so using the URL for that file is as easy as, Right Click, Copy Link!

    So, be sure to check it out.. it’s pre-launch time and everything is getting the file check off for the launch date… Cloud9 will be issuing a limited number of FREE accounts during the beta phase. After which, the service will start a little above that Venti Mocha Frap you had last week, and will offer plans for different usage limits :)

    Cloud9 Website

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