CDSP Market Remains Untapped

The market for a new breed of service provider, Content Delivery Service Providers (CDSPs) will grow to $875 million by 2003, according to research by The Yankee Group.

CDSPs are deploying a broad-reaching virtual server network across multiple carrier networks, with the promise of speeding Web site performance by decentralizing content delivery and moving it to the edge of networks. CDSPs could prove very valuable to sites under a lot of stress, such as e-tailers during the holiday season.

“In the thick of this holiday season, Web sites that cannot scale to accommodate peak loads or supply sluggish performance will not only lose revenue but will be penalized by Wall Street as well,” said Alex Benik, associate analyst for The Yankee Group Data Communications Planning Service. “Any company that wants to have a successful commerce-enabled presence on today’s Web must address its content delivery needs.”

According to The Yankee Group’s report “Content Delivery Services: Coming to a Server Near You,” there will be an opportunity for both CDSP and Web hosting providers to offer services in this still-undeveloped market. The market opportunity for Web hosting providers to offer content delivery services is expected to grow to $587 million in 2003, the report found.

What is already starting to emerge is a hybrid strategy from some Web hosting providers that have begun to resell the services of CDSPs in addition to their own services, allowing them to offer their clients a full suite of content delivery services. This rapidly growing market has seen an explosion of interest from the financial community in the second half of 1999, and content delivery has quickly become Wall Street’s darling in the Internet infrastructure space. CDSPs’ caching and load balancing vendors have achieved astronomical market valuations based on the promise of speeding content on the Internet, but according to The Yankee Group, this is only the beginnning.

CDSPs will seek to become a highly distributed platform from other types of applications, including personalization and the tuning of content for specific devices and access speeds, The Yankee Group’s report found.

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