Voxel Takes Aim at CDNs, Amazon S3 Service

Voxel, a New York-based startup, wants to upend the content delivery network business by offering an ultra low-cost service that rides on the back of Amazon’s S3 offering. It’s a move that is sure to further exacerbate the woes of the CDN business, which has already been wracked by price wars.

Raj Dutt, Voxel’s founder and CEO, has been fighting the odds since the day he started his company back in 1999. His idea of providing Linux-based app hosting was ahead of its time; it’s only recently that the world has started to come around to his way of thinking. Similarly, when everyone was jettisoning their fiber assets, Dutt’s company bulked up on dark fiber, becoming a major fiber and infrastructure owner in New York and New Jersey before expanding to San Jose, Palo Alto and other major Internet hubs. Now he’s betting big on offering low-priced CDN services — and effectively daring others in the space to compete.

“[The] hosting business has become commoditized and [the] same is going to happen to [the] CDN business,” says Dutt. “[What] we are trying to do is pretty much accelerate that.” While CDN providers may blanch, startups should take note, for this VoxCAST CDN could prove to be a money-saver for them. Why? Many of them are using S3 for content delivery and as a CDN replacement. While some would like to sign up for CDN services, they either can’t afford it or they’re turned off by the opaque nature of the CDN business. Most importantly, the CDN operators want to lock users into long-term contracts, something many startups are (understandably) reluctant to do.

Voxel thinks its new VoxCAST CDN is a better option. For S3 customers, such as Facebook app developers, for example, Voxel will pull content from Amazon’s S3, cache it on its edge devices and then serve it up from those devices. Since the company owns data centers and fiber in most major Internet hubs and has interconnection arrangements with many other carriers, it can deliver content cheaply. (See the Voxel web site for details on pricing and comparison with other services.)

Will this antagonize Amazon? Dutt doesn’t think so. “We think S3 is awesome, but it isn’t the best tool to deliver massive amounts of rich media,” he says. Will the idea work? Well it makes lot of sense. And the CDN business could use some transparency. If it does works, however, it won’t be such good news for the current crop of CDN players such as Limelight Networks, Akamai, Internap and Level 3 — not to mention all those startups just jumping into the CDN business.