CDNs Need to Meet Demand of 38.5B Connected Devices by 2020

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In a 2016 Content Delivery Summit opening keynote, Jack Waters, CTO of Level 3, talked about his company’s beginnings, its current state, and the need for content delivery networks (CDNs) to meet video demand.

Quoting the Cisco VNI Global IP Traffic Forecast (2014 to 2019) report, Waters noted, “The sum of all forms of IP video will continue in the range of 90 percent of total IP traffic”.

Waters tied that in to the history of Level 3, including the acquisition of two companies—Savvis Communications and Servecast—about a decade ago.

“That’s the reason we bought those two companies in 2007,” Waters said. “It was inevitable that video traffic would grow dramatically.”

Today, Level 3 has about 12,500 employees and $8 billion in revenue.

“When I joined the company there were 10 people, so it’s changed a little bit since its humble beginnings in 1997,” Waters said.

Waters then noted several trends, including a statistic that predicted there will be 38.5 billion connected devices by 2020.

“Anyone think it will be more?” Waters asked. “I do. Think of all the devices that can be connected and it’s really easy to get to 100 billion devices in 5 to 10 years.”

When it comes to media consumption, Waters pointed out that the technology needed for playback and the bandwidth to deliver premium content have only developed in the last decade.

“The last ten years of technology evolution has been the fastest that certainly I’ve ever seen,” Waters said. “Sixteen years ago, what was the speed you connected to the internet? 56k? Dial-up. The access speeds have increased dramatically.”

Along with these increased speeds comes the ability to access content anywhere.

“These days, it’s very rare to carry our content with us,” Waters said, noting that a woman sitting near him at dinner the previous evening was watching Game of Thrones on her iPad.

As video has evolved from SD to HD to 3D to 4K to UHD HDR and VR, viewer expectations have grown, as well.

“Customers are very sophisticated, caring about time to first byte, video start failure, and other key elements," Waters said. But customer needs can change very quickly.

“In one year, and this is reflective of the industry, the industry shifted from almost no HTTP delivery to all HTTP delivery across our entire platform. This means, for us, that we have to support those kinds of shifts on our platform.”

Waters also covered the issue of capacity.

“What’s the busiest day of the year for CDNs?” Waters asked. “For us, it’s the day after Christmas. Our traffic is typically up 70 percent on that day.” That's followed by two other major spikes: the launch date for key software updates and the release of a largely-followed OTT program.

“Our lawyers won’t let us say who this is,” Waters said, pointing to a slide that showed a traffic spike after a popular program's release on OTT. The graph showed a 10x traffic increase.

“In one hour, we see over 3,200 different devices,” Waters said, adding that the most interesting number is Roku with over 30 million requests in a given hour.

“That’s just from one device type,” Waters said. “Video will be the majority of traffic as far as I can see. We are in this business for the long haul, and we believe that this network that started out on a napkin, and now touches most of the world, will be a large part of carrying this traffic.”

An audience member asked about the total revenue from CDN services.

“Of our $8 billion of revenue, CDN is a small part of our total revenue,” Waters said. “CDN is another tool in our toolkit to satisfy customer demand. Is it an important part along with all the other services that we sell? Absolutely.”

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