5 Reasons Behind The Growth of CDNs in The Market

Asia is home to several countries with the largest number of internet users globally. According to Statista, as of January 2021, China ranked first with around 939,8 million internet users while India achieved second place with 624 million internet users. Based on a report by Google and Temasek, by the end of 2020, the total number of internet users in six Southeast Asian countries including Indonesia increased to 400 million. The growing number of internet users and massive mobile internet consumption are the reasons why content providers —  social networking sites, online marketplaces, audio and video streaming services, and gaming services — continue to thrive in the area, rising the demand for content delivery networks (CDNs).

With a CAGR at 33%, the Asia Pacific region is currently the area with the most significant CDN market growth number, and there are a number of unique situations which become the reasons why the Asia market keeps driving the development of CDN services.

A Tight Competition Among Content Providers
As mentioned, Asia’s massive number of internet users and volume of internet consumption have stimulated the growth of various online content providers in the area. As they compete for a larger user base and a bigger revenue, these content providers are involved in a fierce rivalry which requires them to be better than the others. As users continue to raise their expectations, content providers are forced to look for the most effective yet affordable ways to provide personalized and interactive content to their users in as real-time as possible. This is where CDNs come as an alternative for these providers to ensure better content delivery and, finally, better user experience.

The Development of 5G and Edge Computing
So far, the Asia Pacific region represents some of the most advanced 5G markets, with South Korea, Australia, Japan, and China leading the way. With the features it offers, including reliability, ultra low latency, and higher bandwidth, 5G will provide better support for content delivery such as AR and VR for communication purposes, ultra HD videos for AI-based security and medical procedures, and real-time interactive streams for automated driving and cloud gaming. These use cases will also require the edge to handle the computing, storage, and load balancing to unload traffic from the central network and avoid any bottleneck. CDNs have been developed around the growth of 5G and edge computing to support these purposes.

Massive Mobile Ecosystem
The mobile ecosystem in Asia is another factor that drives the growth of CDNs in the area. Asia is one of the world's fastest-growing regions for mobile subscriptions, and this strong mobile-focused ecosystem has made content consumption thrive. Mobile-focused optimizations, such as device detection and network detection, are being shifted to the edge to deliver the most suitable content to users across different mobile devices in the shortest amount of time. Today’s CDNs have been transformed to allow computing power on the edge due to this need. 

Digital Transformation in All Sectors
With countries like China and India, Asia is one of the regions with the fastest-growing economies in the world. The major factor behind this growth is the digital transformation in the industries, including healthcare, retail, and BFSI (Banking, Financial Services, and Insurance) sectors which have occured in the past few years. This massive digital transformation across industries have stimulated various digitalization initiatives such as e-commerce, cashless transactions, automated manufacturing processes, intelligent security, smart mobility, and smart city. CDNs play a key role in the success of these initiatives by ensuring high content performance and improved security.

The Rise of E-learning
Since 2020, the online education industry has been one of the fastest-growing industries in China, Southeast Asia, and India. Nonetheless, the process doesn’t come without challenges. A significant volume of traffic may cause some issues in latency and delivery that online education platforms and content providers should be aware of. Some of the industry’s pain points include unpredictable network latency, distributed lecturers and students, multi-directional communications, and audio and video lagging. Due to its nature, using CDNs is a key to ensure stable and secure user experience.

In reference to the landscape, we can see that the current state of the Asia market is only the beginning of bigger growth and transformation in the future, and it seems like the regional CDN market will continue to grow in the next 5-10 years. We can expect to see a larger number of CDN providers in Asian countries, and Indonesia will be one of the countries that contribute to the number.