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Doing the content shuffle

Some users shift control from hosters to CDNs.

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SUNNYVALE, CALIF. - Spikes in traffic don't worry McAfee.com CIO Doug Cavit.

The security software vendor expects a major new virus will cause a considerable jump in traffic, such as the 1.3 million hits seen one day in February after the Anna Kournikova bug. Typically, the site fields about 800,000 per day.

Cavit doesn't worry because McAfee is one of a number of companies that is moving more of its traffic out of data centers and onto networks provided by content-delivery firms. While the trend doesn't necessarily threaten the future of Web hosting companies such as Exodus and Digex, with some large firms moving data out of hosting facilities and into networks run by companies such as Akamai and Adero, it blurs the lines between CDNs and hosters.

Take McAfee.com: During the past year or so, Cavit has pulled more than five dozen servers out of collocation facilities and now runs about 60% of his traffic on Akamai's content delivery network (CDN). McAfee has about 250 servers in-house, but Cavit says he's kept that number flat, eliminating the need for collocation because of the Akamai service.

Moving traffic onto a network "has so many advantages in terms of ease, in terms of speed, in terms of diversity and security, that it really obsoletes the whole concept of using a traditional co-host," he says. "There's no reason to have to add thousands of servers and build out a bunch of bandwidth when you can just throw it at a service like Akamai and have it take off and do what it needs to do."

CDNs deliver content from geographically dispersed servers (Akamai has 8,000) that sit on the edge of various networks (473 in Akamai's case). Not all CDNs are as big as Akamai, however, and there is the issue of how to deliver content over disparate CDNs, a concept known as peering. Content Bridge, backed by Inktomi and others, and Content Alliance, backed by Cisco, are two industry groups that were formed to tackle the problem.

But the benefits remain. Because CDN servers are typically located within ISP territories, the number of users is limited by the capacity of that ISP. The servers are shared, so when some sites are busy and others aren't, the busy sites get the extra capacity they need. In the traditional data center scenario, the number of users is virtually unlimited, and businesses often must keep extra servers and bandwidth on hand to accommodate sudden spikes in online traffic.

"So it's really nice if you're running something that may have traffic spikes or even if you have a steady flow of traffic, because you never have to buy another piece of iron again," Cavit says. "All you're buying is a service, and there's no iron to manage or anything else to worry about."

Some analysts say companies, such as Akamai, are slowly chipping away at the Web hosting business. "Every dollar that is served out of an Akamai cache is not being served from the data centers of Exodus or Global Center or Digex or Genuity," says Lydia Leong, a principal analyst at Gartner Dataquest.

CDNs used to only cache static content, but now products such as Akamai's EdgeSuite can deliver dynamic pieces, moving CDNs even further into the Web hosting realm. That means a broader range of content that once was confined to hosted servers - such as stock quotes or sports scores that change frequently - can be cached and delivered by a CDN.

Signe Furlong, product manager at Akamai, however, is careful to stress that Akamai looks at hosting companies as partners, not competitors. She says the Akamai technology is a value-added service that hosters can provide. Indeed, Akamai has partnered with hosters such as NaviSite, Digex and IBM Global Services. Exodus, while not an Akamai partner, has teamed with companies including Mirror Image to create its own CDNs.

"We're seeing great growth in that area," says Scott Emo, director of product marketing for Exodus. He says companies want the increased speed and performance that comes with CDNs.

While in some sense that may take away from the traditional hosting business, Emo says Exodus is benefiting from selling CDN service, and is freeing up space in its data centers to bring in more customers who likely will seek higher-revenue-generating managed services.

Tim Wilson, chief marketing officer at Digital Island, says there's no question that the line between hosting and CDNs is blurring.

"We saw this blur coming early on and we said, 'You can't be in the hosting business without edge computing, and you can't be in edge computing without hosting,'" he says. So Digital Island merged with CDN Sandpiper Networks in 1999.

"And what gets done at the edge and what gets done at the core - frankly, our customers don't care," Wilson says. "They want performance and they want to manage costs."

That's what Gene Rekos, CTO of teen.com was looking for when he started reviewing CDNs such as Akamai, Digital Island and Mirror Image. Rekos says he chose Mirror Image because of its partnership with Exodus, which hosts his servers. He dealt with the Exodus project manager he came to trust and is billed for CDN service on his Exodus bill.

"It just made a lot of sense," Rekos says. "Exodus was a company we already felt good about."

For Dwight Gibbs, CTO of the Motley Fool, Exodus' CDN offering wasn't the answer. "It's excellent, but if you have customers who aren't on the Exodus network, it's not as good a solution," he says.

The Motley Fool has been using Akamai's service for about two years, and Gibbs plans to use the EdgeSuite service to move 90% of the site's traffic to CDNs by year-end.

"The load of our entire infrastructure drops dramatically, and we have much fewer boxes to support," Gibbs says, but he adds that there will always be a need to have servers in data centers - it just won't be as great.


While some customers may like the idea of using content delivery networks as their strategic data delivery system, the support isn't exactly filling the coffers of two of the technology's rivals. Last week Inktomi said it expects to report second-quarter revenue of $36 million to $38 million, and a loss of about 25 cents per share - compared to analyst estimates of $65 million in revenue and a 4-cent loss. Actual results will be reported April 19. The firm also says it will reduce its workforce by 250 people, or about 20%.

Akamai then announced similar money troubles, saying its first-quarter revenue is expected to come in between $39 million and $41 million, rather than the projected $45 million. The company also plans to lay off about 200 workers, or 14% of its workforce. It will report results April 18.

Both companies build technology that speeds the delivery of Web pages by storing it in caches closer to customers. Akamai offers a subscription-based service aimed at content providers, while Inktomi sells primarily to carriers, telephone companies and service providers.

The companies blamed their monetary shortfalls on the slowing economy and the continuing demise of its dot-com customers.

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