Despite all its success over the last decade, for years Apple has been derided as being bad at the cloud. In an era where content was increasingly streamed to myriad devices and files were accessed via applications like Dropbox, Apple was still pushing downloads, complex DRM and authorized computers while struggling to give its iCloud product the basic features and performance that people expected from a cloud service.
But as the stakes have risen, Apple has been building out some impressive infrastructure that rivals that of the large internet companies like Google and Facebook. Apple’s data centers have expanded and it has hired people who are not only mimicking the big names, but leading in areas like solar power. And with yesterday’s news that Apple has built a mammoth content delivery network it’s becoming clear that Apple recognizes the economics and tradeoffs of the cloud world and is taking notes from its rivals like Google and Facebook in building out both services, but also competitive advantages.
Take the CDN news from yesterday. Dan Rayburn, an industry analyst and consultant, published trace route scans showing a working Apple CDN and speculated on the size of Apple’s network. He, and the media, made much of Apple’s paid peering arrangements with ISPs in stark contrast to Netflix, which has been fighting the ISPs on this issue tooth and nail.
But Apple doesn’t care about paying for peering, because Apple isn’t building a low-cost, lean Web operation. Unlike Google, Amazon and others who have to compete on price and whose cost of doing business is based almost entirely on delivering bits, Apple makes devices.
And yes, it’s aware that those devices benefit from easy access to content, hence the dedication to iTunes and attention paid to developers to get products in the App Store. But Apple wants to focus on optimizing those devices by making its own chips and controlling the software that runs on them, preferring a strategy that emphasize a high quality mobile device married to basic web services.
By adding a CDN Apple is making the concession to the digital realm and content, acknowledging that just like in controls as much of the development of its physical products it also needs to control the execution and distribution of its digital products. So like Google, Microsoft, Facebook, Amazon and Netflix, it is building a CDN with servers located in data centers or central offices of the ISPs.
It’s unclear if Apple built specialty servers like Netflix did –which conserve both space and power to make them more palatable to their ISP hosts — but it is clear from Rayburn’s post that Apple has signed paid interconnection agreements with the ISPs.
For me, a larger question about Apple’s CDN strategy is what it plans to deliver over the network. Rayburn mentions the upcoming software updates for iOS, but you don’t build a CDN for one-off events. You build out a CDN because you want to deliver a lot of data consistently and under your own control.
As Craig Labovitz, the CEO of Deepfield Networks told me yesterday, Apple’s move isn’t about cost, but about quality. When it comes to these big web giants, the decision to build a CDN is dictated not only by cost — and possibly not even by cost — but more because it wants to own more of the distribution network so the end users get the best experience.
As ISPs argue that video has made their networks more congested, and consumers complain of problems, it stands to reason that Apple, with its focus on the consumer experience, will sidestep those arguments with its own CDN and the concessions to the last-mile access providers. Plus, given the persistent rumors about Apple’s plans to launch some kind of dedicated streaming video service, along with acquisitions it has made recently for other types of content streaming services, Apple clearly understands the way entertainment is heading and is building the infrastructure to support it.