Cashing in on Internet caching services

The IT staff at CNBC.com had a problem. The performance of their Web site varied dramatically depending on where users were located around the globe. For some, the pages popped up instantly. For others, too many seconds would drag on before the financial headlines, photos, charts and stock ticker appeared.

Programming for such a diverse user experience was difficult.

Enter Sandpiper Networks, a Thousand Oaks, Calif., provider of Internet caching services. CNBC.com struck a deal with Sandpiper to send its graphics - which represent about 20% of the site's content - over Sandpiper's worldwide network of high-speed servers. CNBC.com serves up the rest of the content itself. After relaunching the site in June with Sandpiper's services, CNBC.com was able to standardize the experience of end users and serve more of them.

"More people get a good experience with the content we have," says Michael Whelan, who was vice president of technology for CNBC and now is a Teaneck, N.J.-based consultant. "Site traffic is growing very dramatically. Now we're going to look more deeply at the site architecture to see if there are other parts we could change to improve user performance . . . to see if we could use the Sandpiper services more effectively."

Sandpiper represents a new breed of companies offering Internet caching or content delivery services. These companies - which include Akamai, Digital Island and Mirror Image - improve the performance of Web sites by putting copies of the content in caching devices that are close to end users. The end users call up the local copy rather than pulling the information from the originating server located somewhere across the Internet. The services conduct constant monitoring to keep the local content up to date with the originating server.

Popularized during the last six months, these services are used by many of the largest Web sites to handle embedded objects in Web pages, such as company logos, ad banners and graphics. They work best for content that is served up regularly rather than dynamic content created on the fly for an end user. Another popular use is for the delivery of large files, such as software programs or manuals. These caching companies also plan to deliver streaming video and audio with new offerings announced in recent weeks.

Internet analysts say these companies are poised for significant growth. Internet caching services are "going to be one of the biggest growth markets on the 'Net for the next three years," predicts Al Lill, vice president and research director for Gartner Group. "It's a virtual no-brainer. [For customers,] the risks associated with these services are so low."

Overall, the worldwide Internet caching market, including service providers, is expected to grow from $269 million in 1999 to nearly $2.2 billion in 2003, according to Internet Research Group of Los Altos, Calif. Enterprise sales are expected to increase from $110 million to $1.4 billion.

One reason for the popularity of the services is that in addition to speeding the performance of Web sites, they also reduce bandwidth costs. This is especially true overseas. Similar to the telephone system, Internet caching services cut network costs by serving content locally rather than incurring a long-distance charge.

The services boost reliability by mirroring a Web site's content on distributed servers. Some of the services use multiple ISP networks, so they can route around slowdowns on the Internet. In addition, they work with customers' existing caching hardware and software products from vendors such as Inktomi and Cacheflow.

Migrating to one of the services is easy, users say. It takes only a few hours at most for a Web site developer to do the coding necessary to take advantage of caching services. And that time should be reduced as Web site development tools add features that allow developers to build caching into their applications.

Customers can roll out Internet caching services gradually, migrating graphics first and later adding other content. To help customers feel in control of their content, service providers offer real-time monitoring tools and historical analysis. The tools help customers track how many hits their Web site is getting each day, where the traffic is coming from and other trends that they would watch if they were managing all of their own content.

One concern Web site developers have about these services is security. Some customers want to apply cookies to content served remotely, while others want support for passwords and digital signatures to ensure that only certain people can view documents replicated around the world. Service providers offer different options when it comes to security.

Security was a major concern for Finjan Software of San Jose, which uses Digital Island's caching service to distribute its security software. Finjan's Web site supports more than 30 software downloads per day, with some as big as 50M bytes.

"We can't afford to be hacked," says Dave Kroll, director of corporate marketing. That's why Finjan tapped Digital Island's password protected service to distribute upgrades and provide customer service. Finjan also benefits from performance improvements by using the Digital Island service. "They've definitely pruned off seconds from the end users' experience," Kroll says.

Before Web site developers hand over their content to an outside vendor, CNBC.com's Whelan recommends signing an agreement that mandates a level of quality of service that is better than they can provide on their own. "We were very concerned about reliability, and we have that built into our service-level agreement," Whelan says. "They have to serve the right data and have to do a better job of serving that data than we could in terms of speed."

Although caching services are used mainly for Internet applications, analysts see great potential for the technology in intranets and extranets. "As new e-business applications roll out, as businesses upgrade to Office 2000, and as HTML traffic booms on corporate intranets and extranets over the next five years, we expect caching applications within enterprises to grow significantly," states a report from the Internet Research Group.