Here are some broadband highlights for the fourth quarter of 2012 from Akamai’s official press release

• Quarter-over-quarter, the global average connection speed rose 5 percent to 2.9 Mbps
• On a year-over-year basis, average connection speeds grew by 25 percent. South Korea had an average speed of 14 Mbps while Japan came in second with 10.8 Mbps and the U.S. came in the eighth spot with 7.4 Mbps.
• Year-over-year, global average peak connection speeds once again demonstrated significant improvement, rising 35 percent. Hong Kong came in first with peak speed of 57.5 Mbps while South Korea came in at 49.3 Mbps. The United States came in 13th at 31.5 Mbps.
• Global broadband adoption rates are closer to 42 percent while high broadband (higher than 10 Mbps) adoption rates are at 11 percent. In South Korea, nearly 49 percent of connections qualify as high-broadband, followed by Japan with 39 percent and the U.S. at 19 percent. South Korea has 86 percent broadband penetration, while the U.S. stands at 64 percent.
• The average connection speeds on surveyed mobile networks ranged from just over 8.0 Mbps to 345 kbps.
• Ericsson, which partners with Akamai, said that mobile data traffic doubled from the fourth quarter of 2011 to the fourth quarter of 2012. It was up a whopping 28 percent between the third and fourth quarter of 2012.
• In Europe, Romania lead the charts with a fourth quarter average peak connection speed of 42.6 Mbps, followed by Switzerland with 34.2 Mbps and Belgium at 33.4 Mbps. In comparison, Hong Kong average peak connection clocked in at 57.5 Mbps.
• About 23 percent of Swiss connections are 10 Mbps or higher, followed by Netherlands which has 21 percent high-broadband adoption rate, just ahead of Sweden with 19 percent.

Here is a look at the U.S. broadband scenario.

• Vermont is the fastest state with average connection speed of 10.8 Mbps, followed by Delaware with 10.6 Mbps.
• Akamai said that the average peak connection speed increased by 1.7 percent in the fourth quarter of 2012 to 43.1 Mbps, with Vermont again topping the charts with 41.4 Mbps.
• When it comes to high-broadband, nearly 34 percent of broadband connections in New Hampshire are above 10 Mbps, followed by Washington D.C. with 33 percent and New Jersey, also at 33 percent. Thanks to the presence of Verizon FiOS, New Jersey saw a 12 percent quarter over quarter growth in high-broadband connections.
• In terms of broadband adoption, Delaware is tops with 87 percent of its connections faster than 4 Mbps, followed by New Hampshire (87 percent) and Rhode Island (83 percent.)

As you might have noticed: if you are a small country (or a smaller state), you can have really high broadband adoption because it is easier to build out your broadband infrastructure. Of course, it also helps if there are people willing to spend money on this stuff.

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Now, CDN.net can’t quite rival the likes of Akamai, Limelight or Level3 in terms of points of presence (PoPs): OnApp’s federation includes just over 150 PoPs, whereas Akamai, for example, has around 1,200 (also, CDN.net itself has launched with just 30 PoPs, although it says more can be added according to demand). However, its services are flexible and available on a pay-per-use basis, allowing it to target smaller businesses rather than blue-chip customers.

And now London-based OnApp is taking on the big CDN players by gunning for their resellers.

Business-in-a-box

It’s doing so by essentially giving those resellers a CDN business-in-a-box. OnApp has “open-sourced” the tools used to build CDN.net, so now service providers – whether or not they are currently in OnApp’s federation, such as PEER1 and UK2 are – can roll out their own rival. The package contains a customer portal, configuration and reporting tools and billing functionality, and it will be available to providers for a usage-derived monthly fee with no long-term contract and no minimum bandwidth commitments.

According to OnApp Federation managing director Stuart Simms, flexibility is again the key here, as service providers can use the ready-made storefront to sell specialized CDN services. What’s more, he promised, OnApp is promising greater profitability than the Akamais and Level3s of this world can offer:

“The OnApp federation is a diverse community of service providers, and now there’s an easy way to tap into that rich resource, and create unique CDN services based on whatever attributes are important to you and your customers — location, speed, quality and more. You can build CDNs across a handful of locations, or across the world; offer more attractive pricing for end users; and still get more margin than you would from legacy vendors, who have to recoup the cost of the entire network.”

Remember that CDN is only part of OnApp’s strategy: storage is another big piece, and compute capacity is coming up too. So this “instant CDN” package, as OnApp calls it, is a model for other virtual service provider packages that will come out later this year.

New entrants

The key here is that these packages are no longer restricted to those service providers who were already offering up their data center resources to be sliced and diced in OnApp’s federation. Now those resources can be exploited by entirely virtual service providers who have no physical infrastructure of their own to offer, but who are willing to pay those fees to OnApp and, in turn, the real infrastructure owners who are making this all possible.

Back to Simms:

“Opening up the federation is the next phase in its growth. It’s great news for our customers, because it’ll drive more traffic for the companies supplying the federation. It’s great news for other service providers, who can take advantage of our CDN service alongside their existing services.

“We’ll see other companies using the network too — technology companies who have struggled with the capital expense of building their own network, who can now focus on innovation. We’ve created a launch pad and channel for business applications, games, social media apps, app stores and all kinds of innovative new services that need global performance and reach, out of the box.”

OnApp said this week that it has almost 600 service provider customers in 68 countries, who are all running clouds based on the company’s orchestration software (which was how OnApp first created its federation). The firm claims this makes it “the most widely used public cloud platform on the market today”.

Of course, this scale doesn’t translate directly into PoPs, and those contemplating reselling OnApp’s CDN are still going to get more reach from Akamai, Limelight et al. However, for a lot of providers – both real and wannabe virtual – OnApp’s terms may prove mightily tempting.

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While public cloud services, including content delivery networks (CDNs), are usually very reliable, no one is perfect. Outages happen, and as a result some companies find themselves looking into multi-cloud strategies to ensure redundancy (and to optimize performance and cost). The issue is that cloud costs and resource allocation are complex — hence the emergence of a new breed of cloud mediation services such as Rightscale and Cedexis.

DT is preparing two complementary services in this space. The first is NetAnalyze, which draws on the billion network measurements that DT’s “community” takes every day, spanning 32,000 networks in 230 countries. Webmasters can put the NetAnalyze tag on their site and visiting customers will then automatically generate anonymized measurement for metrics like throughput and response time.

Then NetOptimize kicks in. When a customer requests the website from wherever they are located, NetOptimize will use the NetAnalyze metrics to determine which provider will deliver the content most quickly, and automatically route the content accordingly. Pricing for this load-balancing service is pay-per-use. The result, in theory, is better performance and lower risk of outages, and also better price-to-performance ratios, given the ability to hop between different providers according to needs.

DT’s website also touts the fact that such multi-sourcing approaches make it easier to avoid vendor lock-in. The company says NetAnalyze and NetOptimize make it possible to “form a unified strategy across multiple platforms (cloud, data center or CDN)”.

A glance at the NetOptimize portal (which appears to default to Japanese, at least from my end) shows that the service covers numerous clouds and CDNs. On the cloud side, we have locations for Amazon EC2, Google App Engine, GoGrid, InstaCompute, Internap AgileCLOUD, Joyent, PhoenixNAP, Profitbricks, Rackspace Cloud, Softlayer and Windows Azure. For CDN, there’s Akamai, Azure, BitGravity, CacheFly, CDN77, CDNetworks, CDNVideo, ChinaCache, ChinaNetCenter, CloudFlare, Cloudfront, Edgecast, Fastly, Fastweb, Highwinds, Internap AgileCAST, Internode, Level3, Limelight, NetDNA, Ngenix, OnApp, Pacnet, UPX CloudCache and Yacast.

I’ve asked DT for further details of the service, such as when they intend to officially take the wraps off it, and will add their response when I get it.

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OnApp started out selling cloud orchestration software to hosting providers that wanted to get into the public cloud business. Over time, the firm built a sizeable federation of service provider customers, giving them the ability to use each others’ spare capacity – federated CDN launched in 2011; then came distributed storage; and federated compute capacity is next on the horizon.

However, until now OnApp’s game has been all about helping service providers make the most of their spare resources within the federation – one provider may lack a point of presence (PoP) in a certain location but be able to use that of a fellow federation member, for example. CDN.net is OnApp’s first attempt at selling that federated capacity directly to end users, in this case companies that want to boost the performance of their websites in various locations around the globe.

CDN.net offers access to over 150 PoPs, which is not as extensive a network as those offered by Akamai and Limelight, but way bigger than those from smaller players such as Yottaa, MaxCDN and CacheFly — it’s even slightly more wide-ranging than CDNetworks’ network. However, according to CDN.net marketing manager James Fletcher, the real selling point is CDN.net’s flexibility and pay-by-usage pricing:

“It allows the end user to be in control of what they are purchasing … We saw in the marketplace that you can buy CDN and get a one-size-fits all solution, but that doesn’t work for everyone. The end result is you pay for resources and locations you don’t use. The CDN.net vision allows you to spin up on the fly and provision and customize as you need to.”

At launch, CDN.net will only include 30 PoPs with a focus on Europe, North America and Asia-Pacific. However, OnApp is working to add locations in emerging markets and users will be able to add locations based on demand. “If the customer comes along and wants somewhere in South Africa, we can work with the service provider network to get one up and running,” Fletcher explained. Livestreaming capabilities will also go live soon.

Ultimately, OnApp is trying to “help line the pockets of the service providers”, as Fletcher put it, but it’s also quietly becoming one of Europe’s most significant cloud players, perhaps the most significant. Others have talked about or even attempted this kind of federated model, but no-one has achieved the sort of scale that OnApp can boast – scale that it achieved by stealth, but that it’s now starting to exploit in earnest.

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Overall revenue from IaaS and Platform as a Service (PaaS) made up just 15 percent of the overall cloud infrastructure market, although they were the fastest growing categories. That’s hardly a surprise given the cash funneled into these arenas, not only by Amazon but by Rackspace, HP, IBM, Red Hat, and all the telcos.

According to a post by Telegeography, a Synergy partner and the company behind all the cool fiber pipeline maps:

“In the past year, IaaS and PaaS revenues increased 55% and 57%, respectively. Amazon dominates the IaaS segment, accounting for 36% of revenues, and is quickly approaching PaaS leader Salesforce’s 19% market share. Although well behind Akamai and Level 3 in theCDN/ADN segment, Amazon holds the number three spot with a 7% market share.”

Rackspace, because of its roots as opposed to its budding OpenStack cloud business,  leads the managed hosting segment, followed by Verizon and NTT. Across all segments, Amazon is the market leader in North America and NTT leads in Asia. Europe, the Middle East and Africa or EMEA is a battle ground hotly contested by  France Telecom-Orange, British Telecom, and Deutsche Telekom.

Content Delivery Network (CDN) leader Akamai remains at the front of the pack in that category, followed by Level3 and Amazon.

Numbers like these are fascinating snapshots of what will doubtless be a changing market. I was surprised to see Amazon so strong in PaaS — it was ranked second after Salesforce.com.  Amazon’s Elastic Beanstalk PaaS just doesn’t seem to have that much traction — but definitions of PaaS vary and the array of higher-level services that Amazon offers atop its IaaS foundation (but aren’t considered Elastic Beanstalk) could be considered PaaS-like.  Salesforce.com’s PaaS tally presumably includes both Force.com and Heroku.

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In a new report, the big researcher estimates that the public cloud market overall will grow 18.5 percent, to $131 billion, in 2017 from $111 billion in 2012. Under this broad umbrella term for public cloud services, Gartner includes the usual suspects — Infrastructure as a Service (IaaS) a la Amazon and the growing crowd of OpenStack-based public cloud providers.

The public cloud IaaS and file and storage represents the fastest growing part of public cloud services, growing 42.4 percent in 2012 alone to $6.1 billion. With growth accelerating to 47.3 percent, it’s expected to hit $9 billion in 2013. Gartner research director Ed Anderson said that’s happening as more companies go beyond the usual development and test scenarios to more for-real production deployments — a topic we’ll doubtless touch on at GigaOM’s Structure: Data event in New York March 20-21.

Gartner also includes “cloud-based advertising services” as another hot sub-category. I assume this includes such offerings as Akamai’s new ad integration service plus, perhaps, SaaS based ad and marketing tools a la Salesforce.com. I’ve asked Gartner for some clarification on this so stay tuned. Update: Gartner defines Cloud advertising as “processes that support the selection, transaction, and delivery of advertising and ad-related data where content and price are determined at the time of end-user access, usually by an auction mechanism that matches bidders with impressions as they become available.” Relevant vendors include AOL, Apple, AppNexus, Baidu, Facebook, Google, Microsoft, OpenX and Yahoo.

The report also shows geographic differences persisting. According to Anderson:

“Although forecast growth is generally high across all regions, the adoption of cloud services varies significantly by country. Providers should not assume that a generic strategy applied to specific countries or regions of the world will produce the same outcome when applied to other countries, even countries with similar market characteristics … Local economic factors, regulatory issues, the local political climate, the diverse landscape of global and local providers, including noncloud providers, and other country-specific factors ensure a unique marketplace in each country and region.”

North America is the most enthusiastic adopter of public cloud services, with Gartner expecting it to account for 59 percent of all new spending in the overall category from now until 2016. Despite local challenges, Western Europe is projected to remain number 2, with public cloud expected to account for 24 percent of spending in the category. But, as expected, the highest growth rates will be seen in emerging markets in Asia (especially in Indonesia and India), China and Latin America.

So now comes the hard part: Remembering to come back and re-check this prediction in three or four years.

This story was updated at 5:05 a.m. PDT to include Gartner’s definition of cloud-based advertising services.

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Big companies — and Cedexis’s customers include EuroDisney, Hermes and Nissan — need to make sure their e-commerce sites run smoothly, that pages load fast, that content gets delivered optimally around the globe. A service that can quickly flag when an application or server is approaching overutilization and automatically redeploy would be a very valuable. The new data from inside customer shops augments data Cedexis already gleans from Radar, a crowdsourced service that collects data about cloud and CDN performance around the world.

“Fusion Radar collects data from outside all the various clouds … [and] Fusion gives us the inside-out view that you’d normally get from a server vendor or monitoring provider,” Cedexis CMO Rob Malnati said in an interview. The company said Fusion can also tap into Catchpoint, Keynote and Gomez to detect slowing e-commerce processes and sniff out cloud outages early, using data from Amazon, Rackspace, SoftLayer and other cloud service providers.

If it works as advertised, Fusion could help alleviate operational headaches for enterprise customers.

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Terms of the deal, announced Thursday, were not disclosed but the move is a natural for Radware, a Tel Aviv-based application delivery vendor.

And it’s not unprecedented. Almost a year ago to the day, content delivery network (CDN) leader Akamai bought Blaze to speed up performance for people using web and mobile applications.

As GigaOM’s Stacey Higginbotham wrote at the time, in buying Blaze:

” … Akamai is acknowledging that web sites today are accessed in more places … but also that the sites themselves are different. They use richer media and offer links back to more applications. Things like sharing something on Twitter or liking it on Facebook via a simple button add seconds to load times and complexity to the overall site. Complicated CSS scripts and lagging ad networks don’t help either.”

This addiction to speed doesn’t just apply to consumer apps — more mobile workers expect their Salesforce.com other SaaS apps to respond fast. That’s why acquiring technology that can deliver rich content quickly over wireless connections to any device is a good idea.

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Bear in mind that OnApp was only spun out of British hosting provider UK2 a couple of years ago, with software that lets other providers build their own public clouds. The idea there is to help these other hosting providers – OnApp now counts more than 500 of them as customers — ward off the threat that is Amazon, but in the process the company has steadily used that growing federation to diversify into new lines of business.

In 2011, OnApp launched a content delivery network (CDN) based on those service providers’ spare network capacity. There are around 130 points of presence (PoPs) in that network across 40 countries – each provider gets paid for the traffic going over its own PoP, and OnApp gets a 10 percent cut. In 2012, the company took on EMC by doing pretty much the same thing with OnApp Storage, using its customers’ commodity servers to support a distributed storage system that’s controlled by OnApp.

All that is made possible through OnApp’s marketplace and now, flush with fresh funding, OnApp is going to use that marketplace to do the same thing with compute capacity, chief commercial officer Kosten Metreweli told me:

“Adding compute is the most immediate thing. The end customer could now go to [OnApp's customer] and say, ‘I want to spin this up in Tokyo and Moscow’. They can come to our marketplace, buy compute capacity in those locations and also have the application automatically replicated across those locations as well. It makes it much simpler to roll out true global cloud applications.”

There have of course been other marketplaces for compute capacity, such as SpotCloud. On that subject, Metreweli drew a comparison with OnApp CDN competitor XDN, pointing out that OnApp already has a huge customer base brimming with capacity. “The trouble is, they were setting up a market stall in the middle of an empty street,” he suggested.

And he’s not just blowing hot air. In terms of CDN scale, OnApp remains behind market leader Akamai and Limelight but it’s way out in front of Amazon CloudFront and has roughly the same number of PoPs as CDNetworks. OnApp Storage is a newer product, but the company gets to draw on the same customer base there. And those customers can’t hang around these days — not with Amazon breathing down their necks.

“For the majority of service providers, they’d much rather get going with their cloud service, then put their differentiation on top of that,” Metreweli said.

Apart from its compute play, OnApp also intends to use its newfound funding for market expansion – 40 percent of its business is in North America and it really wants to invade non-English-speaking territories. It also intends to turn its storage play, currently bundled with OnApp Cloud, into a standalone product.

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The rest of the world is faring well, too, in terms of boosting speeds. The fastest countries in the world when measured by average speeds are South Korea and Japan. And as you can see from the chart below, South Korea has managed to get over half of its population buying speeds of 10 Mbps or more. The U.S. is more in line with the global average, but has seen a significant boost in “high” broadband adoption.

What the latest version of the Akamai report shows is how much difference there can be in broadband quality even within countries. It also illustrates the difference in speeds between wireline and mobile connection (only seven mobile carriers even provide Akamai’s 4 Mbps definition of broadband). As our own country attempts to build out gigabit cities near universities – or in at least one city in every state – it’s worth pointing out that the future is clearly here in terms of faster broadband, but it’s unevenly distributed among the types of broadband and within countries.

As a side note, Google Fiber, the gigabit network built in Kansas City (both in Missouri and Kansas sides of town), was perhaps the biggest broadband story of 2012 but doesn’t have a direct impact yet on Akamai’s third quarter numbers in terms of speeds. The first Google Fiber deployment occurred during the fourth quarter, with the launch happening in the third. Yet Kansas saw both a boost in broadband adoption as well as higher average connection speeds that grew to 5.5 Mbps.

Some more fun facts about worldwide connectivity from the report:

• China is still the No. 1 origination country for attack traffic from a quarter-to-quarter basis. It saw a marked increase in the percentage of attack traffic, such as hacking –from 16 percent in the second quarter to 33 percent in the third. In contrast the U.S., which holds the No. 2 spot for origination of attacks saw its attack traffic rise from 12 percent in the second quarter to 13 percent in the third. See other origination countries below:



• Hong Kong’s 54.1 Mbps average peak connection speed (an average of the highest speeds in the country and inclusive of “speed boosting technologies”) in the third quarter marks the first time that an average peak connection speed has exceeded 50 Mbps.
• The average peak connection speed in India has increased nearly 140 percent since the third quarter of 2007, while China’s has increased nearly 250 percent over the same period. In comparison, the U.S. has seen its average peak connection speeds increase by 200 percent during that time frame.
• In the mobile world, only seven providers had average connection speeds in the “broadband” (greater than 4 Mbps) range. None of them were in the U.S. Akamai doesn’t name carriers, only listing them by country.
• An additional 68 mobile providers had average connection speeds greater than 1 Mbps in the third quarter.
• Average speeds of mobile connections measured from three U.S. providers topped out 2.7 Mbps, and the peaks topped 9.8 Mbps at one provider.

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