Table of Contents
Deployment Complexity Remains the Largest Constraint
Transparent caching (TC) is the most cost-effective medium today for service providers to deliver OTT video with the kind of QoS demanded by consumers. This study covers the state of the global TC market, examining the drivers and restraints for growth, pricing, technology, demand, and geographical trends. Market growth by region—North America and Latin America, Europe and Middle East, and Asia Pacific—is forecasted. This study highlights the TC market for vendors offering the solution as a stand-alone product. In addition, an in-depth analysis of the competitive situation, including vendors' market shares, is provided, along with profiles of the key vendors in the industry. The base year is 2012, with forecasts running through 2017.
• Many telcos, multiple system operators (MSOs), and mobile operators are actively looking at transparent caching (TC) as a required element in their network to control over-the-top (OTT) content consumption and to provide the best possible end-to-end user experience. It is a unique technology that simultaneously benefits a content owner, a network operator, and, most importantly, a broadband or wireless subscriber.
• TC is the most cost-effective medium today for service providers to deliver OTT video with the kind of quality of service (QoS) demanded by consumers. Once considered a cost-savings initiative, it is now viewed as an investment, providing demonstrable return on investment (ROI) by enabling service providers to better monetize their video services.
• This study highlights the TC market for vendors offering the solution as a stand-alone product. However, content delivery and Web acceleration vendors are moving towards integrating TC technology into a broader set of Web-optimization platforms.
• This will create a bigger ecosystem, faster deployment, and more traction for TC technology as a whole, but it will also cause TC to no longer be thought of as a stand-alone offering in the market.
• The market began consolidating late last year with 2 TC vendors being acquired: Akamai acquired Verivue in November 2012 for their TC and licensed content delivery network (CDN) platform, and Allot Communications acquired Oversi Networks in September 2012 specifically for their TC technology.
• As video streaming and rich-media downloads continue to flood operator networks, TC offers a two-fold value proposition. The first is to reduce infrastructure and bandwidth costs associated with OTT content, and the second is to differentiate their consumer broadband service and deliver better user performance by eliminating any potential delays associated with the Internet, or even the content origin.
• With so many benefits from intelligent caching, why is it only now beginning to gain traction? The reality is that caching in this manner is technically challenging and takes many months, if not years, to deploy on a global scale; however, deployments on a regional level are much faster, with many taking only a few weeks to roll out.
• The global TC industry is expected to grow at a compound annual growth rate (CAGR) of X% from 2012 to 2017. About X vendors offer some kind of TC solution, with a few of them partnering or reselling solutions from some of the leading technology companies in the market.
1. While the technology is mature, adoption remains low as operators are still hesitant and limited in their deployments.
2. Home to larger numbers of MSOs, Asia-Pacific (APAC) and Latin America (LA) contain richer hunting grounds for the TC market than those in North America (NA).
3. Indirect competition from Google and deployed caches by Netflix still act as barriers to growth in NA.
4. Limited appreciation of TC’s value proposition remains a challenge; consumer education remains a key growth strategy.
5. Over time, TC will no longer be sold as a stand-alone product; it will become part of a larger Web-optimization platform.
Europe, Middle East, and Africa (EMEA)
Global TC Market—Regional Market Life Cycle Discussion
EMEA is currently the largest market for TC deployments. A key reason for adoption of TC in Africa and the Middle East in particular is non-intuitive—it is driven by governments to enable enforcement of state regulations and censorship on Internet content. Deployment by European operators is for the conventional reason of seeking to optimize networks for efficient and scalable video delivery.
APAC closely follows EMEA in terms of market life cycle. Similar to the Middle East, some governments in APAC are very strict about the content allowed to the general public, and TC solutions provide a feasible medium to regulate the online content. The market is expected to open up further over the forecast period as a greater number of deployments occur, particularly in emerging markets.
NA remains the most challenging market, as there are only a few MSOs countrywide, in contrast to the 10s or even 100s of MSOs that operate in other countries. Demand for TC in NA is hitting a tipping point only now as video consumption skyrockets and traffic congestion can no longer be ignored. As a result, NA is expected to provide high monetization opportunities in anotherX months.
LA is the smallest contributor in the market this year. The industry is almost at the start of its life cycle in this region and infrastructure issues still hamper the market’s pace. Thus, there is a network investment surge in countries such as Mexico and Brazil, coupled with growing competition among triple-play service providers and Pay TV service providers, which will drive this market upward on the maturity curve over the next Xto Xmonths.
Key Questions This Study Will Answer
• Is the market growing? How long will it continue to grow and at what rate?
• Are the existing competitors structured correctly to meet customer needs?
• Will these companies/products/services continue to exist, or will they be acquired by other companies? Will these products/services become features in other markets?
• What are the current pricing trends in the market, and how are competitors continuing to provide value-priced products?
• Are the products and services offered today meeting customer needs, or is additional product development needed?
• What regional trends exist in TC solutions, and what do they mean for vendors’ global growth strategies?
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