Apple Building Out Their Own CDN To Deliver Content To Consumers
Over the past year, there has been speculation of when or if Apple would build out their own content delivery network for the purpose of delivering content to consumers. To date, all of the CDN deployments done by Apple …
Context & Ripple Effects
Speculation about an Apple-owned CDN has been circulating for the past year, and this report confirms the company is moving beyond the limited deployments it has used so far for its own software distribution toward delivering consumer-facing content itself. The move sits on top of a long arc of Apple's cloud-video ambitions: back in March 2010 it was already working on storing users' video in the cloud, and by mid-2010 observers judged its cloud service not fully baked — delivery quality has been a persistent gap between Apple's content ambitions and its infrastructure.
The breadth of pickup matters here: the Wall Street Journal, MacRumors, 9to5Mac, Data Center Knowledge and others all ran the story on or about February 3, 2014, signaling that infrastructure watchers see this as more than a routine data-center expansion — it touches the commercial relationship between the biggest content owners and the CDN industry.
First-order effects
- Apple begins shifting consumer content delivery onto infrastructure it controls directly, reducing its dependence on third-party CDN contracts for the traffic generated by iTunes, iCloud and streaming media.
- The CDN vendors that currently carry Apple's traffic face losing one of the highest-volume accounts in the market, since Apple's deployments to date have been internal rather than consumer-facing.
Second-order effects
- If Apple delivers its own traffic at the edge, competing CDN providers lose pricing leverage with other large media customers who can now benchmark what self-delivery costs, pressuring contract renewals across the sector.
- A major self-delivering content owner changes the interconnect conversation with ISPs, since Apple would need direct capacity arrangements rather than relying on a CDN's existing relationships.
Third-order effects
- If the pattern holds, the largest internet content owners progressively verticalize their delivery stacks, structurally shrinking the merchant CDN market to mid-tier publishers and reshaping how content-to-consumer infrastructure is financed.
- Buyer-led infrastructure buildouts of this kind push carriers and ISPs into a new role negotiating paid interconnects directly with content owners rather than transiting through intermediaries.
The trend: Hyperscale content owners are moving from renting third-party CDNs to owning their delivery infrastructure, with Apple's buildout as the latest instance of buyer-led infrastructure investment.