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Microsoft to Build Its Own CDN

Microsoft announced this week that it will begin providing on-demand access to the full versions of retail video games. That means titles like BioShock (6 Ggigabytes) and Mass Effect (7 GB) can be downloaded through the Xbox Live online gaming service, which has more than 17 million members. The growth of these type of bandwidth-draining services has been a major driver in Microsoft’s decision to build its own content delivery network.

This news is hot on the heels of the planned purchase of a new Chicago Data-center worth 185 Million.

Jeff Cohen, the general manager of Microsoft’s Edge Computing Network, discussed the company’s content delivery infrastructure in his May 11 keynote at the first Content Delivery Summit. Cohen said video delivery accounted for just 10 percent of Microsoft’s content delivery in 2007, but has since grown to 40 percent, consuming as much bandwidth as the company’s “large file” downloads of software and security updates.

“The content is exploding,” Cohen said at the event, part of Streaming Media East. But the barrier to entry for the CDN market is steep. ”It takes a huge amount of capital to get into this space, even for Microsoft.”

That’s why Microsoft uses its Edge Content Network to deliver about 40 percent of the content on its network, while farming out the remaining 60 percent to existing CDN partners including Akamai (AKAM), Limelight Networks (LLNW), Level 3 (LVLT) and ChinaCache.

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