To its list of many assets, Apple has reportedly added a content delivery network (CDN). This network is said to be live throughout the U.S. and some areas in Europe.
The CDN's existence was discovered through trace-routes run by Dan Rayburn, a principal analyst at Frost & Sullivan. It is being used to distribute updates to the operating system, but is expected to eventually also be employed for streaming delivery of music, video and apps.
The delivery of Apple's desktop and OS dates have, on occasion, been hampered by network capacities. Although Apple is expected to move transmission of much of its content and software to its CDN, Rayburn speculates that the company will not completely transfer everything, but will continue to employ third-party networks.
Apple Paying Comcast
CDNs are private content distribution networks that physically locate content-bearing servers around a given market so as to speed up delivery from the nearest server.
As the CDN comes up to speed, the tech giant will be less reliant on such commercial CDNs as Akamai and Level 3. Rayburn has said he believes Apple has as much as 10 times the capacity it is currently using. The company has reportedly been building up its capacity over the last 12 months.
But Apple is also apparently paying Comcast and other ISPs. On Streaming Media Blog, where he is executive vice president, Rayburn reported that the company "has interconnect deals in place with multiple ISPs, including Comcast and others, and has paid to get direct access to their networks." This would connect the CDN to the big ISPs, similar to the arrangement that Netflix has.
Akshay Sharma, Research Director with industry research firm , told us that the CDN offers several advantages to the company.
'Connecting the Dots'
He pointed to the operational cost savings of not paying a CDN provider, but also to the "innovation angle potentially by connecting the dots."
"Apple already controls the hardware, the OS, as well as the iTunes/App store platforms," Sharma said. "Except for the network connections, they can control the customer experience [and] I could see Apple TV going beyond and leveraging this end-to-end."
He noted that, for a company like Apple that "has the wherewithal to accomplish this," owning the CDN can make sense so it can "innovate around it or control the experiences better." Microsoft, YouTube and Netflix have similarly created their own CDN networks. Consumers, content providers and developers will most likely not notice any difference than if Apple used a contracted CDN for everything, unless the company decides to develop new services around its CDN, Sharma said.
Glenn Hower, research analyst with Parks Associates, told us that Amazon, YouTube, and Microsoft "have steadily increased their CDN , and Yahoo is on its way after acquiring PeerCDN a few months ago."
"If -based or streaming media are in a company's portfolio," he said, "then deploying a CDN might become necessary to keep up."