Thunder to bring new technology to fight price war in the CDN industry or enter the Warring States Period

The CDN industry, which has the reputation of “policing traffic jams on the Internet”, entered the “Warring States Period” in 2015. First, freshly introduced Ali and Tencent announced significant price cuts. Last week, Thunder announced a new technology based on wireless nodes to land on the market. The price drop was nearly one-third, and the company dubbed the CDN industry duopoly cyberspace technology and Lanyin Technology.
The CDN is a content distribution network, which is an important means to relieve network congestion and improve the response speed of Internet services, such as traffic police who can ease traffic congestion. In North America, more than half of Internet traffic is distributed through the CDN.

China's CDN industry has grown rapidly in recent years. Now, the dual-oligopolistic structure of ChinaNetCenter, which is listed on the GEM, and Lancome, which is listed on the US stock market, have led the industry. Netizen Technology's net profit for the third consecutive year was 104 million, 237 million and 484 million yuan, respectively, and its performance was doubled. Among them, the gross profit margin of CDN in 2014 was 46.85%, which was higher than 24.99% of IDC (Internet data center, such as server hosting). .

At the 7th China Cloud Computing Conference just concluded last week, Chen Lei, chief technology officer of Thunder and general manager of Netcore Technology, bombarded the CDN industry: expensive, black, and chaotic. He said that the industry is complex and opaque, and the cheapest to buy CDNs from leading companies is about RMB 15,000/G per month and RMB 30,000 per month.


According to reports, the Thunder CDN bandwidth price dropped to 9999 yuan/G/month, which is 1/3 lower than that of leading enterprises; at the same time, video transmission saves 50% of traffic. The core approach of Thunder CDN is to use crowdfunding methods to allow more users to actively contribute bandwidth and traffic to other users. That is, users can obtain Internet resources from more recent places, such as LANs and intra-cell pull data, making services faster.

In the past two years, with the high profitability of CDN and its value as a cloud computing portal, the potential of big data has been gradually recognized. Giants such as Ali, Tencent, video, and games have started to build CDNs themselves, and some have begun to open commercial use. Telecom Unicom is merging the CDN market. The CDN market ushered in unprecedented fierce competition.

On May 22, Alibaba Cloud announced that it would cut the CDN tariff by a maximum of 21.2%. Aliyun said that since the price reduction, the price was only one-third of that of ChinaNetCenter. On the 26th, Tencent Cloud CDN announced the highest reduction of 25%. On the 27th, Baidu Cloud accelerated the release of a big move, saying that it will accelerate the distribution of content with its mysterious partners.

After the BATs with the same technical strength and funds have stepped in and stirred up the CDN market, what direction will the industry develop?

At the shareholders' meeting on the 5th, what the shareholders asked most was how much the Ali CDN had impacted the company. In response, Liu Chengyan, chairman of ChinaNetCenter, stated that the main customer groups of ChinaNetCloud and Aliyun are not the same, and the services and business models provided are also different. Netbook Technology provides personalized and customized services for large customers. In contrast, meeting individual needs requires strong technical capabilities and rich resources to support. Therefore, there is no comparison between the price of Cyberspace Technology and Ali Cloud.

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