3Crowd Attempts to Aggregate Aggregators
3Crowd, a company that came out of stealth mode just a few months ago, is attempting a Big Idea: aggregate the delivery services of Content Delivery Network (CDN) service providers.
Having raised $6.6 million from Canaan Partners and Storm Ventures, the company released its CrowdDirector product in a bid to change the dynamics of video delivery.
"With CrowdMonitor and CrowdDirector, we're giving the world just a tiny view of the foundation we're building to enable a new type of Content Delivery System," the company blog announced a few weeks before going public with CrowdDirector. "We are using the idea of a crowd or crowd-sourcing to leverage multiple CDNs that can be monitored, managed, and deployed as one single service."
The company prices a basic CDN load-balancer service, CrowdDirector Basic, at a contract price of $150 per month.
In order to change the way CDN delivery is done, the company needed to attract more than just funding. In late July, the company announced three executive hires in product management, operations, and finance. The three new hires join co-founders Chris Wallace and Barrett Lyon, the latter known already in the industry as co-founder of BitGravity.
Bill Shetti joined as director of product, from Storm Ventures, an investor in 3Crowd.
"Bill has a wealth of experience in product management from positions with leading companies, including Cisco," a company blog post revealed. "His role will be to engineer and shape 3Crowd's unique product offerings."
Nathan Hickson, who was named 3Crowd's director of operations is a veteran of both YouTube and, more recently, Google, which 3Crowd notes as experience that will benefit its customers.
"Nathan was instrumental in the growth of scalable content delivery and network infrastructure," the company stated. "We are confident that Nathan will drive our operational success in terms of creativity, efficiency, and execution."
Even the company's finance hire has a strong delivery technology background: Steven Machado, 3Crowd's new vice president of finance was on the founding team of Exodus Communications, and had worked with 3Crowd's co-founder Chris Wallace in executive roles.
If the company clears the technological hurdles of aggregating the services of multiple Content Delivery Networks, will that be enough to compel use of 3Crowd's services?
The company believes there is a two-fold approach, combining flexibility and financial benefits.
"[The services] will have significant implications on performance and vendor flexibility," the company notes, and will "not only impact the business of current content providers, but also re-orient the economics and invite a new generation of providers to participate in the market."
Beyond the flexibility of load balancing and business-rules-based use of various CDNs, 3Crowd also feels the business models around CDN delivery need to be fixed, as they lag the technology innovation that occurred around the YouTube revolution in viral content.
"With the video explosion there were no equal innovations on content providers' side of the ledger," the company notes. "As a result, a lot of online video developers are now struggling to find a profitable balance between creating great content and their cost of delivering it to consumers."
The company hopes to address one of the major financial stumbling blocks: the balance between fixed price product placement fees and the need to let a video's growth as an online viral phenomenon continue unchecked. With traditional broadcast, a fixed delivery cost formula helps content creators choose an appropriate fixed cost placement fee, something that has yet to catch on in the online video world mainly due to the cost of delivery.
"If a video with a fixed product placement fee of $1,000 goes viral and costs $10,000 to deliver, the content creator just lost $9,000," the company stated. "CDNs and carriers are all designed to allow this to happen and as a result the content creators put less video online, put lower quality video online, and are severely held back from creating their visions. . . . If we do our job right, Internet streaming will be more affordable than traditional broadcast systems and together will have success."
The biggest issue, it appears, may be the company's ability to get the CDNs to cooperate with its meta-load-balancing scheme, as all but the simplest of pan-CDN implementations would require access into the "hooks" or SDKs (software development kits) that the CDNs provide to their customers for better integration into software applications. While this may be less of an issue for online video platforms, or even Amazon's S3, it may prove an issue for coordination with the legacy CDNs.
"It's our vision to provide services that help the entire Internet content industry thrive-a very ambitious goal," said Barrett Lyon, co-founder and CEO of 3Crowd Technologies. "But we feel that as we continue to release new innovations and technologies we will be helping everyone keep pace with the exploding demands of online video and global reach. Some of our customers use CrowdDirector to take advantage of the strengths and avoid the weaknesses of CDNs."
To that end, 3Crowd recently announced that certification of CDNs is forthcoming, with CDNetworks and Edgecast being the first CDNs participating in the certification process.
3Crowd will base its certification on three criteria that play into 3Crowd's approach: performance and bandwidth use; implementation of security features including URL signing and tokenized URLs, token authentication, and blocking parameters; and rich-media delivery capabilities including HTTP seeking, progressive download, and HTML5.
"Connecting our customers with smoothly integrated CDN partners helps everyone involved," said Lyon. "This program lets CDNs stand apart in a crowded market while ensuring customers get fantastic services. We are committed to integrating with CDNs to make them part of an on-demand community of providers, as well as exposing CDNs to potential new leads and revenue streams."
Initial CDNs participating in the program include: CDNetworks, and Edgecast.
CDN pricing remains constant at the moment, so don't expect a big drop in 2009.
The CDN market has grown an a remarkable rate thanks to the increased prominence of online video, and that trend doesn't appear to be slowing down.