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Analyst: Outsourced content delivery improves user experience

As businesses rely more and more on their Web sites, Web-based applications and high-bandwidth technologies like video conferencing and content delivery are becoming a must. Yet enterprises now may choose whether to install and maintain their own content delivery services or to let go of the reins and try outsourcing. While most are reluctant to outsource content delivery, Henry Goldberg, a senior analyst at the Scottsdale, Ariz.-based research firm In-Stat/MDR, told that the results of a new market survey show that outsourcing has some important benefits.

What are the important things to look out for when considering a vendor?
Most content delivery service providers guarantee 100% uptime. However, service-level agreements on performance vary greatly. Some do not have any guarantee on performance. A number of them guarantee that they will outperform the origin server. A few others have stronger guarantees, saying that they will outperform the top Web sites in the world, as measured by a third party. Customers need to look for some sort of third-party verification of performance. What other features are service providers beginning to offer?
Some of the service providers are offering Secure Sockets Layer (SSL) encryption and are integrating them with authentication services. Some are offering the delivery of content based on location, so businesses can offer advertising based on a user's location, or change the language of a site based on a user's location. Others are doing e-commerce. Akamai Technologies Inc., for example, has an effective way of making sure that your e-commerce traffic gets to the origin server as smoothly and quickly as possible. Others are offering streaming. There are a number of new features.


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What is driving growth in the content delivery market?
Companies see these services as an effective way of delivering Internet access to applications, Web site content video and audio downloads. Companies may start by using these services to deliver high-bandwidth images, then a whole Web site might follow. Our aggregate estimate of growth for next year is about 20%. Is there more growth with service providers or the hardware manufacturers?
That estimate is for service providers. In our survey of 485 companies, the majority of those using some sort of content delivery technology provided it themselves: 32% installed and managed their own systems versus 13% that used a service. Why do companies look for content delivery services?
One of the key benefits is getting faster response times that can be delivered to an end user. If you are a content provider, that can be very valuable. If an end user has a great experience, they will be motivated to use your site again. Greater reliability is another [advantage]. Content delivery service providers will guarantee that content is available all the time and that sites will not break down under crowded conditions. You can also reduce your own investments in infrastructure. If you did it yourself, you have to build your infrastructure to serve peak conditions. If you are a news Web site, you want to be able to handle peak traffic during a major event. If you look at providing all the bandwidth and server space to handle that peak event, then it become a less effective way to go. Are companies starting to buy content delivery services instead?
We will see some migration. It depends on how effective vendors are at convincing users that there are advantages to outsourcing, and there are advantages: lower capital investments, fewer demands on the IT staff [and] outsourced systems are more easily scalable if the service provider does a good job. Plus, [a company] can meet peak demand without incurring the costs associated with capital investments. Why do companies need to be persuaded to outsource?
In our survey, 60% of companies that used in-house content delivery systems said that their IT staffs preferred managing it [themselves] to outsourcing it, and 20% cited lower cost. But that is a largely incorrect perception. For example, with an outsourced service, a number of companies can share a server that can better accommodate a peak in demand from one company. With an in-house service, a server has to be dedicated to content delivery. IT staffing for in-house systems can also be a burden.

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