The deployment of "rich-media" files across verticals such as entertainment, enterprise, and media is on the upswing. This, along with increased broadband penetration, will fuel growth in the world content delivery network (CDN) market.
New analysis from Frost & Sullivan (financialservices.frost.com), Global Content Delivery Networks Market - Investment Analysis, reveals that this market earned revenues of $725.0 million in 2007 and estimates this to reach $2.6 billion mark by 2012.
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"The cumulative effect of factors such as "rich-media" files across verticals, coupled with enhanced broadband penetration, are reflected in strong market expansion, with revenues for the world CDN market projected to grow at a CAGR of 31.1 percent, during the period 2007 to 2012," notes Frost & Sullivan Financial Analyst Swarna Pasupathi. "Venture capital (VC) investors are eyeing myriad opportunities, including new ways to make their return on investments, which includes innovative and patented CDN participants that are vital for next generation web content delivery."
The world CDN market consists of the video and the non-video segments; the former growing at a much faster CAGR of 32.6 percent compared to the non-video segment's anticipated growth of 29.2 percent, during the period 2007 to 2012.
However, a primary concern for the market is the high popularity of peer-to-peer (P2P) technologies, with torrents and self-hosted content delivery being a threat to the growth of the world CDN market.
"Trends indicate an increase in demand for higher quality content distribution and this is expected to have a restraining impact on traditional CDN participants who are being over taken by P2P participants," adds Pasupathi. "Though the success of P2P is speculative, evolving P2P technology will have an impact on the growing CDN market."
The future of the world CDN market will compel market participants to develop a diversified product portfolio that supports efficient content delivery. Acquisition or partnership of traditional CDN participants with innovative P2P-technology will occur over the long term to enhance current CDN offerings and overcome competition from P2P participants.
"CDN participants operating predominantly in the video CDN segment and focusing on the BRIC and APAC regions will attract VC investors during the period 2007 to 2012," concludes Pasupathi. "The increased deployment of 'rich-media' content across entertainment, media, and enterprise verticals is the key contributing factor to the overall growth of the video CDN market."
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