The next 5-10 years could be a prime time for the global content delivery network (CDN) market, thanks to high-speed network rollout, reduced data cost, rising demand for video/OTT services, and the surging internet consumption in all formats during and post the pandemic.
While North America still dominates with the largest market share, the Asia Pacific region is showing the strongest growth momentum with a CAGR at 33%. The disruptive growth is due to the growing number of internet subscribers, the massive mobile internet consumption, and the thriving of eCommerce, live gaming, and online education in Asia, especially in India, China, Southeast Asia. As such, we see all major global CDN vendors investing in the region to cater to the rising demands. Meanwhile, a wider spectrum of local players is adding content delivery solutions into their service offerings, including local Telcos, hosting service providers, and all kinds of specialty-focused technology platforms.
Yet, not everyone can truly capitalize on this opportunity. Global providers need to understand what’s unique in the region and develop their service roadmap accordingly to compete in the Asia market. Now let’s take a close look at the uniqueness of the Asia market and how it’s driving the evolution of CDN services.
Serverless Edge Platform
Asia has the world’s largest internet user base with over 850 million in China alone, almost three times that of the US. Southeast Asia, as another example, is home to more than 350 million internet users; its internet market size is expected to triple in 5 years, reaching $300 billion in 2025 and making it the fastest-growing internet economy in the world. The huge volume of internet consumption has made a massive number of online content services to bloom in the area. TikTok is a great example. The byproduct of it, however, is fierce competition between content providers across industry verticals. As end-users continue to raise their expectation of user experience, content providers are forced to seek out effective ways to reduce cost while providing personalized and interactive content to their users in as real-time as possible. As this cascades down to the content delivery network underneath, the CDN is required to evolve from “delivering” and doing basic caching and routing logics to becoming a full-set programmable edge. The market is expecting to integrate CDN functions as an extension of their overall development cycle to run codes on the edge as close to the end-user as possible to maximize performance. Even though this is a technology gap between the US-based providers and Asia-based providers, Asia-based providers are transforming to a serverless edge platform at a much faster speed because of the massive growth in market size.
The second market attribute that drives CDN evolution in Asia is the highly developed mobile ecosystem. Asia is one of the world’s fastest-growing regions for mobile subscriptions and home to over half of the total global subscribers. Internet users in these regions, more than anywhere else, have formed strong mobile internet habits. The mobile-focused ecosystem has made e-commerce, gaming, short-videos, and social entertainment quickly thrive. This is another driver behind the transformation of CDN providers to enable computing power on the edge. Mobile-focused optimizations such as device detection and network detection are being shifted to the edge to serve the most suitable content to users across different mobile devices in the shortest amount of time. CDN providers, when building edge nodes, are required to have direct connectivity with mobile ISPs. This is a unique challenge in China and Southeast Asia as local ISPs have very minimum peering with each other. Also, because all major local ISPs (including mobile) are government-owned, they have strict regulations on working with foreign entities. This has made deploying edge nodes in those countries an extremely strategic task for any edge providers.
Edge computing in the 5G/IoT era
From an infrastructure perspective, the development of 5G will have a major impact on what CDN service will look like in this area of the coming decade. The Asia Pacific represents some of the most advanced 5G markets, with South Korea, Australia, Japan, and China leading the way. China alone, expects to have 460 million 5G users by 2025. With the 5G features eMBB (enhanced mobile broadband) and uRLLC (ultra reliable & low latency communications)rolling out, we will see more content in AR, VR, and omnidirectional communication; there will be massive consumption of ultra HD videos in industrial scenarios such as intelligent security for manufacturing and remote medication; Cloud gaming and unmanned driving will place higher requirements for network latency and reliability. These use case scenarios will require the edge to possess advanced capabilities in compute, storage, and load-balancing to powerfully offload traffic from the central network. The content delivery technologies also need to be more specialized and customized for specific services and applications. When we reach the stage of mMTC (massive machine type of communications), as a gigantic amount of devices are connected to the internet, the edge will have to handle a massive amount of computing and storage to enable IoT application scenarios such as oil and gas transmission, temperature monitor and humidity control, etc; the edge nodes will have to be placed in higher density as well to achieve better accuracy, making the network structure different from what we have today.
Real-time Live Streaming
Additionally, content is also driving CDN and CDN-related technologies to evolve in Asia. With the world’s largest live streaming user base, China’s live streaming industry has grown rapidly during the past decade. In 2019, China officially started this “Live Streaming Plus Era” where the live streaming platform no longer just focuses on entertainment. Instead, it has become the foundation of any online content across almost every industry; an enormous amount of content is being transformed into the live streaming format and new business models are being built around it. Traditional industries such as government, enterprises, and education are all using live streaming to reach broader audiences and to increase user engagement. “Live-e-commerce”, the fastest growing live streaming sector, generated $61 billion in 2019 which is expected to double in 2020. COVID-19 pandemic has only accelerated the trend.
As such, the surging demand for interactive content with real-time latency, high resolution, and personalization is forcing live streaming platforms to seek solutions throughout the whole workflow to optimize viewing experience. A few key areas we are seeing changes are around the streaming protocols, the codec, and the edge network.
For protocols, as the content is becoming more real-time, live streaming platforms are starting to experiment with RTP like WebRTC, SRT, and other UDP-based private protocol for real-time communications. For codecs, companies are exploring newer codecs such as AV1 for higher efficiency. China also formed an Audio and Video coding standard workgroup which developed AVS based on international standard. The second generation, AVS2, is focusing on HDTV and 4K video, and the newest release of AVS3 is focusing on 8K and omnidirectional 360-degree video. CDN providers in Asia are required to support a wide range of streaming technologies from RTMP to RTP, push video processing such as watermarking, transcoding to the edge, etc. Besides, the delivery architecture for the live streaming platform is also changing as the users are more distributed and the content is more interactive. Live streaming platforms need to deploy multiple origins across the country to reduce the middle mile latency and partner with Asian providers like BaishanCloud who has extensive coverage from tier 1 to tier 3 cities in most countries in Asia, so the broadcaster can push the stream to the closest ingest point and the viewers can pull the stream from the closest edge.
With unparalleled needs for live streaming content and the more mature live streaming ecosystem in Asia, the live streaming technology could be one technology to be dominated by Asia-based CDN providers in the future.
Secure Access Service Edge
Lastly, like other parts of the world, Asia is seeing the trend of network and security converging in the cloud, in line with what Gartner describes through the concept of SASE — Secure Access Service Edge. As traditional networks and network security architectures are becoming increasingly ineffective and an increasing amount of users, devices, applications, services, and data located outside of an enterprise than inside, the need to combine the network-as-a-service capabilities (CDN, SD-WAN, WAN optimization, etc.) with the Security-as-a-Service (SWG, CASB, FWaaS, etc.) to support the dynamic secure access at the edge is emerging. The content delivery service providers, well positioned to provide a secure compliance gate for identity and access management for SaaS or IaaS end-points with their distributed edge architecture, are looking into a new architecture not centered around data centers, but the cloud edge. While the goal is integrated network security service and access control delivered from and managed on a single cloud platform, the industry is still exploring the best path to it.
To access more content related to cross-border content delivery, streaming best practices, edge security, and tech trends in Asia, please visit www.baishancloud.com for more information.