Pando Disrupts Some CDN Business

Written by Ryan Lawler

Thursday, March 5. 2009 at 05:25 PM EST Post a comment

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With some new business from online gaming company Nexon America, peer-to-peer (P2P) technology firm Pando Networks Inc. is showing how it can help deliver downloads faster and cheaper than through traditional content delivery networks (CDNs).

Pando announced today that its P2P technology is being used to accelerate the delivery and lower the cost of downloads for Nexon's massively multiplayer online role-player games (MMORPGs).

By using a mix of CDN servers and peer nodes, Pando CEO Robert Levitan says that Nexon was able to increase the completion rates of its downloads by more than 10 percent when compared with using traditional CDN services. 

At the same time, the company was able to substantially reduce its costs for CDN delivery. Levitan estimates that by implementing Pando's P2P "Content Delivery Cloud," Nexon has been able to offload about 80 percent of its traffic from its CDN partners.

That's bad news for Akamai Technologies Inc. (Nasdaq: AKAM) and CDNetworks Co. Ltd. , both of which have been named as CDN providers for the gaming company.

"Nexon had been a pretty big customer of CDN services. But since they've been working with us, their need for CDNs has been diminished," Levitan says.

While the deal shows how Pando is able to win some business by providing even lower costs than some CDN providers, it also shows that the company is looking beyond just the major media companies and video providers that it had focused on almost exclusively.

"We got caught up in the sexiness of video and big brands. Our technology still works [with video], but we realized that it works really well in the game and software space," Levitan says.

In most cases, Levitan says gaming and software companies are easier to work with and have shorter lead times than those in the online video space.

"When you work with a game company, all they care about is how fast you can deliver the file, and what's the cost," Levitan says. 

Pando may be branching out into game and software downloads, but that doesn't mean it's given up on video delivery just yet. Pando is being used in conjunction with Level 3's CDN for delivery of NBC Universal 's NBC Direct video download service, and Levitan says the company is in trials with two other big broadcasters that may end up using its technology.

"All these video companies are going to incorporate P2P -- there's no doubt in my mind," Levitan says. "But what we've accepted is, they have a long-term plan and they need to change how they do business... and we're going to help them do it."