ChinaNetCenter Enters The Mobile Web Acceleration Market

As the market for web acceleration services continues to grow, driven primarily by mobile usage, ChinaNetCenter has thrown their hat into the ring with a new mobile application acceleration solution. The company, which has more than 500 POPs in China and more than two dozen POPs outside of China, is using an adaptive policy based solution. It integrates their mobile application acceleration SDK, what they call mSDK, with an intelligent context aware technology designed to get information from the mobile end, such as the brand, OS version, network type and app’s quality of service.

The company says it’s very easy to integrate their mSDK to iOS and Android and that it takes one developer less than 30 min to integrate it into their native app with less than four lines of code. Because all of their CDN cache servers have what they call an mSmart component that communicates with the mSDK, it allows them to optimize every TCP/UDP connection. Their platform also decides the priority of the content being delivered, ensures that the highest priority content is transmitted first, and selectively queues content in the system buffer.

The company said they found that regular connection optimization methods in the industry like TCP/Http Keep Alive and Google SPDY contributes very little improvement, because they have the side effect of involving more competition for the limited available bandwidth. So ChinaNetCenter uses a proprietary intelligent adaptive protocol to control the connection that decides the adaptive policy for transmission and content and optimization parameters based on environment information gathered by the mSDK.

By the end of 2013, China had over 618 million Internet users, 80 percent of which access the Web via their smartphones. At the same time, a huge amount of startups are bringing mobile apps on the market and traditional enterprises are also working to migrate existing application to the mobile platform. In early 2013, one of the biggest online map application companies came to ChinaNetCenter for help to improve their mobile end-user performance. The customer complained that while they were already using a CDN, when they looked at the performance numbers, it simply wasn’t effective for mobile clients. They were considering disabling mobile viewing all together as they didn’t want to provide a bad user experience.

This is something I hear often from content owners, that traditional CDNs aren’t providing a true platform for mobile content acceleration. While some CDNs like Akamai have been in the mobile acceleration market for a while, and smaller CDNs like EdgeCast and Fastly are also focusing on this segment, most CDNs don’t really address the performance issues around delivering content to mobile. It’s one of the reasons why new startups like Instart Logic have emerged in the industry, specifically to focus on improving the performance of content delivered across mobile devices.

ChinaNetCenter said their customer’s install base of 100M users for their online map application app saw an average performance gain of over 40%, and in some low speed wireless network environments, the performance gain was as high as 100%. Earlier this year, the biggest online reading application in China also started using ChinaNetCenter’s mobile application acceleration platform and saw their app’s utilization ratio increase by 20%. Another customer, a local airline in the country, saw their order rate conversion increase by 10% through their app’s performance improvement.

For web browsing, mobile content consumption is the future and multiple vendors are now focusing on acceleration technologies to address the specific issues caused by wireless networks, which tend to have high latency and a large percentage of packet loss. With their new solution in the market, we can now count ChinaNetCenter as yet another vendor who has recently entered the mobile application acceleration market, with more to come.

Aereo Had 77,596 Customers At End Of 2013: Didn’t Understand The Market

Documents filed by Aereo with the U.S. Copyright Office have finally disclosed how many subscribers they had for their streaming service and the numbers show, it simply wasn’t a service that many consumers wanted. At the end of 2013, Aereo had only 77,596 total customers. About 27,000 of those were in the NYC area, 12,000 were from Boston and 10,000 from Atlanta. For all the talk by those in the industry and members of the media of how “innovative” or “disruptive” Aereo was, the reality is that the only number that matters for a subscription business is how many customers it has. That’s it. That number determines revenue, P&L and whether or not the company survives with their offering in the market. [See: Barry Diller’s OTT Service Aereo Is Dead On Arrival]

Aereo failed because they didn’t understand the market they were in and set expectations with themselves, that were completely unrealistic. They argued that the cable companies model of bundling channels was bad, yet Aereo themselves bundled all their channels into one monthly fee as well. For all the talk by Aereo of a la carte, Aereo didn’t allow you to pay only for the channels you wanted. You had to pay a monthly fee to get channels broadcast in foreign languages, even if you couldn’t watch them. In reality, Aereo was just like the cable TV model, but with less choice, poorer video quality, less device support and fewer options overall.

The CEO of Aereo said they could sign up 350,000 subscribers in the major cities, yet the company ran out of capacity and had technical issues in NYC, when they had less than 7% of that number of customers. When management and Barry Diller are out in the public saying that between 25M-30M people wanted their service, it shows just how out of touch they were with the market. Consumers want choice, they want subscription services with a deep catalog of content to choose from. They want high-quality video, with support on all devices. Aereo didn’t have any of these with limited device support, small number of channels and streaming video quality that was on average, a third of what services like MLB.TV offer today.

Aereo raised $100M, yet couldn’t even scale the business to 100,000 subs. At 100,000 subs, that would be less than one tenth, of one percent, of the cable TV subscription market. Aereo didn’t fail because of the U.S. Supreme Court ruling, Aereo failed from day one because it was selling a service in the market that not enough consumers wanted. Aereo should be a lesson to others that just because technology allows you to bring a service to the market that does not mean the service is something consumers want, or are willing to pay for. If there is no tangible business model behind the technology you bring to the market, then how the service works does not matter. Aereo put technology before business, and that always leads to failure, when it comes to consumer services.

Speakers Wanted: Content Management; OTT & TV Everywhere; Video Monetization; Formats, Protocols & Standards

1280x427xHyatt-Regency-Huntington-Beach-Resort-and-Spa-Hotel-Exterior-Dusk.jpg.pagespeed.ic.LX9aXziG-nI’m currently working on the advance program for the next Streaming Media West show, taking place November 18-19 at the Hyatt Regency Huntington Beach Resort & Spa in CA. The call for speakers and presenters is still open, and right now, here are some of the themes, topics and verticals that I am programming content for:

  • Encoding & Transcoding
  • Content Management & Branding
  • OTT and TV Everywhere
  • Monetizing Content Across Multiplatforms
  • Media, Entertainment & Broadcast
  • Formats, Protocols & Standards
  • Live Webcasting
  • Enterprise & Education

I’m open to all ideas and suggestions right now, from content owners AND vendors. I’ll be placing speakers much earlier this year, so NOW is the time to reach out to me. I’m still looking for additional moderators, (vendors ok) who know how to organize a good panel and conversation and drill down into real details.

I will be confirming speaking spots much earlier this year and companies that take weeks or months to decide what they want to do will lose out. So if you are interested in speaking on a round table panel, doing a technical how-to presentation, have a good case study or want to be involved in some other way, please email/call me right away. (917-523-4562/email) I will be publishing the advance program by the end of this month, so time is running out to get your ideas in.

Verizon Looking To Challenge Akamai With New Cloud-Based Web Application Firewall Service

This morning, Verizon announced a new cloud-based web application firewall (WAF) service as part of their Verizon Digital Media Services Defend product suite, which includes built-in protection against network-layer distributed denial of service attacks and origin-cloaking capabilities via Origin Shield. Verizon has launched the offering as a beta product for the next few months, with plans to have it go gold in Q4. Verizon has long been in the business of remotely managing security devices for their customers through their Verizon Security division, with thousands of customers. Some of these security technologies belong on-premise – such as network firewalls and intrusion protection systems, whereas other areas of security, such as those applied to websites and web applications, may be better done in the cloud. This fact has not been lost on Verizon and they are making a big entrance into the market with anti-DDoS, origin protection, and web application firewall solutions built into their recently acquired EdgeCast CDN platform.

For those new to web application firewalls, or WAF’s, they are primarily used to protect websites and web applications by inspecting HTTP/S traffic to ensure the HTTP/S requests are not being used to attack. While WAF’s have traditionally been deployed on-premise – now the trend is to move this service to the cloud for all the standard benefits of cost savings, on-demand scalability, always-on capabilities and faster time to market. While Verizon is not the first to the market with security offerings, we all know Akamai’s been in the security space for a while, Verizon says there are some key differences in how their platform operates. While most WAFs share a similar core approach in that they are inspecting HTTP/S traffic (requests) for attacks, Verizon says their WAF is delivering a set of capabilities previously unseen in the cloud-based WAF market by taking advantage of their existing EdgeCast content delivery network (CDN) for both scale and automation.

For example, the Verizon WAF enables rule updates and WAF instances (rules are procedures that control access to websites) to be pushed out to all their CDN points of presence worldwide in less than 5 minutes. This means that once a new type of vulnerability is identified, new rules can be applied almost instantaneously thereby minimizing the exposure. And given that their WAF is tightly integrated into their CDN platform, customers are able to control (on a per domain or multiple domain basis) exactly what traffic types (e.g. HTML) and/or object types (e.g. json, jpg, etc.) they want to process through the WAF, minimizing both their expense and the amount of incremental performance overhead added to their traffic. Verizon is focusing a lot of the fact that they have a whole lot more rules available in their first version of their WAF product than other vendors do.

By implementing both the OWASP ModSecurity core rule set and the ModSecurity commercial rule set from Trustwave, their customers are provided with the broadest set of rules available on the market. Include the EdgeCast security rules within their HTTP/S caching engine that can be applied to their HTTP/S traffic, and you really do have very deep and broad set of tools to that enable a higher degree of general protection. I think the Trustwave partnership is important to mention as it brings a ton of “black hat” credibility to the table for EdgeCast as a vendor as Trustwave’s technology is considered top notch. The WAF also provides thousands of rules that are custom-built for specific applications like Microsoft SharePoint or Apache servers which makes sense for enterprise customers looking for quick out of the box implementations. From what EdgeCast tells me, they plan on leveraging their Verizon Security division as part of their ongoing roadmap as the Verizon Security folks have a ton of threat intelligence domain experience and can help the EdgeCast team enhance their WAF capabilities even further.

While version 1.0 of Verizon’s WAF hits all the basics and also offers some nice differentiators, it is not without some shortcomings. These include more complete protection against certain types of application layer DDoS attacks, bot mitigation technology, additional reporting, SIEM integration, and the advanced learning features found on some of the higher-end WAF appliances. Verizon EdgeCast has shown me that they have all of these on their roadmap and will be rolling out these capabilities over the next 12 months. They have a pretty good track record adding new capabilities quickly so I’m pretty confident that they will address these deficiencies soon.

The projected market growth for WAFs is anywhere from 18-30% in 2013 with an overall market value of over $250M per year, (Source: Gartner said 30% growth in 2013 and greater than $337M revenue in 2013, TechNavio said 18% growth) and the complementary market for anti-DDoS services is over $500M per year (2014 estimates, IDC) and growing at close to 20% 2012-2017 (source: Infonetics). Hardware-based deployments are dominated by companies such as Imperva, Check Point Software, and Trustwave. Verizon’s WAF will be competing with cloud-based WAF vendors including Akamai, Incapsula (Imperva), CloudFlare, and Qualys – which is also in beta test with their offering.

Some Akamai customers I have spoken to have voiced discontent with the high setup fees and high ongoing monthly recurring costs, along with the lack of control associated with their WAF offering. To date, the only viable alternative to their WAF has been on-premise appliances. That is about to change, and given Verizon’s prior experience re-selling Akamai’s solutions, I think they are better prepared than anyone to compete head to head. EdgeCast says in the case of any customer using Akamai’s stand-alone WAF or Kona bundle, the Verizon WAF supports a much more extensive set of WAF rules without the need for expensive professional services. It also provides the ability to selectively control what traffic and objects are processed through the WAF; deep visibility into what the WAF is actually seeing; a much higher degree of usability and configurability; and less exposure to the risk of attack from new threats given what EdgeCast says is the ability to push out rules updates more than 900% faster than what is offered by other WAF solutions in the market today. Pricing I’ve seen from both vendors indicated that the EdgeCast WAF service will come in very far below what Akamai is charging – both lower set up fees and lower recurring monthly fees. We’ll know more once we see deal flow in the market.

Verizon’s WAF is well suited for mid-sized and enterprise class organizations and provides many reasons to choose it over competing offerings. In combination with other existing Verizon offerings, such as the Verizon anti-DDoS, threat management, and managed security services, Verizon is able to offer a web site security portfolio that few others can deliver. To date, Akamai’s not had much in the way of cloud-based competitors since Qualys’s cloud-based WAF is focused just on Amazon EC2 or VMware’s vCenter. And the other cloud-based WAFs such as Incapsula and Cloudflare are focused almost entirely on the SMB marketplace. Verizon’s WAF is specifically targeting the same enterprise class customers Akamai is, so we’ll have to keep an eye on what kind of traction Verizon can get with their offering and if Verizon has any impact on driving down pricing for these services industry wide.

Even If The Supreme Court Ruled In Aereo’s Favor, It Still Had No Viable Business Model

Those who have read my blog before know that I have criticized Aereo’s business from day one. [See: Barry Diller’s OTT Service Aereo Is Dead On Arrival] Not from the standpoint of whether or not the service was operating legally, but rather with the perspective that when it comes right down to it, Aereo’s service simply isn’t compelling for the majority of consumers and never would be. Aereo offers very little in the way of content, with few choices, only average video quality, on only a few devices, with buggy DVR software. This is the exact opposite of what the vast majority of consumers are looking for in the market when it comes to how they want to consume premium content.

As a whole, the media’s coverage of Aereo has been poor in that it hasn’t fostered a conversation about what consumers want and whether or not Aereo was actually providing it. The story should not be about Aereo’s technology, or size of their antennas, but rather about the business models that their technology could or could not support. There is no value of any technology if it is packaged and brought to the market as a service that consumers are not willing to pay for in volume. Many in the media have been blinded by Aereo, thinking and predicting that their technology was going to replace or displace cable TV, that many simply can’t see the reality. Aereo failed not because it was found to infringe upon the rights of copyright holders, but because their offering wasn’t one that was compelling, reliable or in demand by consumers. Many want to talk about the technology, but few ever questioned Aereo’s business model. That has to change.

Netflix and other services have taught us that consumers want a lot of content choice, they want a deep catalog of content to pick from, they want it on all of their devices, they expect the quality of the video to be very good and the service to be easy to use. This isn’t what Aereo offered. For all the talk by Aereo and some members of the media on how Aereo allowed consumers “to pay only for the channels they want without being tied to cable companies”, the fact is that Aereo didn’t allow for that at all. A USA Today article writes that a “passionate base of a la carte TV fans is cringing”, because with Aereo “consumers can choose to pay only for the channels they want without being tied to cable companies. No, they can’t.

Aereo doesn’t have an a la carte offering of any kind. Aereo offers only one package, without the ability for users to only pick the channels they want. Of the 35 channels offered in the NYC area, Aereo doesn’t allow users to strip out the 10 channels that are broadcast in foreign languages and pay a lower price each month. No, like the cable TV market, Aereo forces users to pay for channels they may not have any ability to watch or have any interest in using. So for all the posturing by Aereo on how it was different from the cable TV industry, the fact is, their packaging was exactly the same. Aereo themselves used the term a la carte when they would talk about their service, when in reality, there is no a la carte at all.

The real discussion should be about what consumers are willing to pay for, what type of content they want to watch, how they want to consume it, what quality they want it in, and the business models that most resonate with them be it subscription, rental, PPV or download to own. Focusing on the size of Aereo’s antennas or how much consumers hate paying their cable bill isn’t the real story. Outside of the copyright issues, there is nothing to debate. The fact that Aereo’s service has been in the market for almost two and a half years, and they haven’t even penetrated 1% of the cable TV market, shows that it’s not the technology that was holding back their business, but rather consumer demand for such a service.

If Aereo came to the market and said it was a niche service and that a small percentage of consumers would want it that would have been accurate. But Aereo’s CEO and Barry Diller’s kept saying the opposite, stating that 25-30 million consumers in the U.S. would pay for such a service, with no data or previous use cases of any kind to back up such statements. Aereo set expectations they could not live up to and weren’t being realistic with themselves, or others in the industry. Just look at this video on Aereo’s website that gives an inside look at their technology where their Chief Commercial Officer says that consumers can access Aereo,”from any device that is Internet connected”. Any device? That’s simply not accurate.

Aereo didn’t understand what consumers are willing to pay for, how to package their service to truly stand apart from cable TV, or how important video quality really is. Aereo set themselves up for failure from day one. They have no one to blame but themselves. The Supreme Court ruling isn’t what stopped Aereo’s business from being successful, it was Aereo’s insistence that their technology would drive demand for their limited service that the majority of consumers never wanted to begin with.