New Zealand: A Case Study on Winning Big in “Small” Markets
When you think of booming internet markets, New Zealand might be the last country that comes to mind. With a population smaller than that of New York City, it hardly seems like a bustling hub of internet activity.
But sometimes, counterintuitively, you have to think small to win big, and New Zealand is a perfect example. It’s a seemingly small market where internet usage exploded after quality increased.
Video and digital media content was initially being sent from Sydney to New Zealand via subsea cables. The distance between Auckland and Sydney is approximately 1,339 miles, or roughly the distance between Atlanta and New York City, so it’s clear why sending a movie or game from Sydney to a customer in New Zealand wasn’t going to be a good experience. There were a plethora of issues affecting the quality of programming, from the fact that most content providers were trying to access New Zealand via limited bandwidth from Australia to the occasional shark chomping on underwater cables.
We put our newest generation point of presence (PoP) in Auckland, where we could reach the population mass majority quickly and conveniently. That meant when 10,000 people in New Zealand wanted to stream the same movie, we didn’t have to send 10,000 separate copies of the movie across the submarine cables from Sydney, dodging sharks the entire way — we could merely send one copy to Auckland, cache it locally and then deliver the individual copies from there.
We anticipated seeing a 20–30 percent performance improvement in New Zealand, but it ended up being so much more. We saw buffering (the dreaded spinning wheel) reduce by more than 65 percent on some of our larger video customers’ platforms. We saw response time (the time between clicking play, to seeing it play) reduce by more than 44 percent. And, we saw throughput (the speed of the content being delivered, or the bit rate) increase by more than 52 percent. These drastic improvements meant consumers were able to use their last-mile connections to their fullest potential.
Anticipating first- and second-wave surges
Any expansion into a new market involves a “decompression effect,” where the existing traffic to that region magnifies by a certain percentage. This is because the internet and our Edgecast Content Delivery Network (CDN) mostly carry video these days, and most videos use adaptive bit rate protocols that dynamically adjust the video quality to the available bandwidth. So when the available bandwidth goes up — by localizing content, removing bottlenecks and decreasing the distance to viewers’ eyeballs — the bit rate goes up, and we start to see more traffic. In New Zealand, we saw traffic practically double overnight with this decompression factor, or the “first wave” of traffic increased.
On top of that, users began to have a better experience with content, games, websites, applications and social media platforms, so they started to consume more. If a website or application loads quickly, a user is likely to use it more. If a game can now be delivered to a phone in seconds, a user is more likely to play. If a video has higher resolution and starts playing instantaneously, a user will happily watch more. Then, that user may begin talking, tweeting, pinning, posting, liking, snapping and sharing about her great user experience with content from our customers, who happen to be the leading content publishers, distributors and creators from around the world. The end result is that others begin flocking to the same fast-loading, amazing-quality outlets.
This word-of-mouth generated from better user experiences leads to what we call the “second wave” of traffic surging. We plan for this surge based on historical data by tracking this growth with our forecasting, baseline, monitoring and reporting tools. When we look at a graph of internet usage growth in a specific market, we tend to spot the first jump right when we localize to the geographic area. We’ll then see the second jump after the improved user experience catches on. And to build a great network, you have to understand and plan for both waves.
Creating the right relationships to scale
Of course, expanding into a new market also requires the ability to scale up easily, in anticipation of success. In New Zealand, we began planning for scaling up by choosing the right location: Auckland provides a centralized hub for the population.
The right relationships and partnerships within a market are also critical, and that starts with the data center, which must provide enough space for the necessary infrastructure, and also additional space as we are always growing and always expanding. That’s not all we need from an ideal data center; it’s got to have enough power to run the equipment and to keep it nice and cool, and remote hands must service the gear on a 24 x 7 basis for 100 percent reliability and availability.
The second key relationship is on the network side. A CDN is only as good as the networks it connects to. Having good relationships with the local networks in a given region is crucial. These relationships are how we are able to respond quickly to any growth, by obtaining more capacity on the downstream network.
Additionally, it’s important to be able to rapidly comply with any changes in industry standards. This process is where all of our CDN’s forecasting tools become very important, because the more we can provide insight into a potential demand, the better our relationship is going to be with the local networks.
Looking into the future
There are many other locations just like New Zealand where a single PoP could make a huge difference in providing quality content to a given region. These days, for example, an area in South Africa might be served from as far away as London, which is over 8,600 miles in distance, or 6.4x further than the distance between Sydney and Auckland. Imagine what a single, local PoP could do there.
That’s why we’re working to establish a CDN presence in all main geographies and markets; we are imminently launching a PoP in Johannesburg, South Africa, for example. We are constantly evaluating network topology and bottlenecks that exist on the internet to expand intelligently and efficiently. Even in these relatively small markets, we want to go big and go strong — it’s part of our DNA.