Today Amazon Web Services launched the beta version of its content delivery network service called CloudFront. As Om mentioned in September when the service was announced, this is a good move for Amazon, (s AMZN) and something that may put the hurt on fellow CDNs such as Limelight (s LLNW) and Akamai (s AKAM). Amazon will charge a usage-based fee, rather than a long-term contract, bringing CDN prices even lower for smaller web players who don’t have the scale to negotiate lower prices. Here’s how it works from the release:
The service caches copies of content close to end users for low latency delivery, while also providing fast, sustained data transfer rates needed to deliver popular objects to end users at scale. CloudFront works seamlessly with Amazon S3, where users store the original versions of objects delivered through the service. Customers need only put their objects into an Amazon S3 bucket and then register that bucket with the new service using a simple API call, which then returns a domain name used to access content through the network of edge locations.
Werner Vogels, CTO of Amazon, explains all about CloudFront on his blog.
A content delivery service that would extend Amazon S3 has been something that is very high on the wish list of our customers. They were already successfully using Amazon S3 for some of their content distribution needs, but many wanted the choice to do so with even lower latency and with higher data transfer rates to any place in the world.
He goes on to explain:
Using Amazon CloudFront is dead simple. Many of our private beta customers have reported that it only took them 10-15 minutes from the moment that they first signed up for the service to the moment that Amazon CloudFront was distributing their content.
The second Amazon Web Services principle that sets Amazon CloudFront apart is that no upfront commitments are necessary and you only pay for what you have used. There are no upfront fees or high volume requirements and no negotiations are necessary because we have published low prices from the start.
The second point is the more disruptive one. When Amazon announced its CDN in September we wrote,
Akamai is less likely to be impacted in the near term, but it further commoditizes the CDN business and forces a big shakeout in the industry, taking down the small and the weak. Akamai has been focusing on value-add services, as a way to stay ahead of the commoditization of the basic CDN services.
With prices ranging from 17 cents per gigabyte for the first 10 terabytes sent out a month, to 9 cents per GB for everything over 150 TB, the service seems to undercut the pricing offered by other CDNs for small to medium sized customers. It might be a good thing that Akamai’s looking at diversifying into online advertising.