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26 August 2021

Ramp’s eCDN love triangle seeks suitor, after Microsoft sparks M&A storm

With the ink barely dry on the announcement that Microsoft is acquiring peer to peer (P2P) technology provider Peer5, there has been a lingering assumption that suppliers of similar P2P-based video support software for the computing colossus’ Teams communications platform will be extradited as a result.

Boston-based enterprise CDN (eCDN) outfit Ramp is one such company. Speaking with co-CEO Neal Stanton this week, we were pleased to hear that the reality isn’t so black and white. His relaxed demeanor was almost too palpable; answering questions faster than we can ask them, confident in the knowledge that something significant is brewing.

With this in mind, before we drill down into the gory details, why didn’t Microsoft just acquire Ramp instead of Peer5 – removing the need to juggle integrations of multiple eCDN delivery architectures from numerous suppliers?

The simple answer is that even if Microsoft decides to roll out Peer5’s decentralized mesh networking software across the board, its WebRTC-based eCDN approach – with load balancing and auto scaling for optimizing video at scale – is not a magic remedy for all businesses in all scenarios.

While conventional server-based CDN delivery isn’t going anywhere fast, which is why most P2P models come with an option to instantly switch to an underlying CDN if devices are struggling to send or receive data, there are additional options out there for the eCDN sector.

Ramp’s eCDN is a triple-decker offering encompassing caching and multicast alongside P2P delivery. Customers can mix and match from these three very different technologies for their enterprise networking needs, or go all-in on any single option. Whatever approach a customer chooses from Ramp’s eCDN love triangle, having multicast and caching options to optimize bandwidth when a P2P approach is struggling to perform at its most efficient, for example when conducting a conference call to thousands of employees or sharing critical video files internally at scale, helps IT teams sleep at night.

It could be as simple as certain websites hosted in certain countries not playing ball with WebRTC, a problem which can be exacerbated in heavily security conscious sectors such as governmental departments. Vulnerabilities in a P2P approach can arise when establishing peers, as this involves mapping the entire network and determining subsets, which – for some organizations – is a scary prospect. The wrong person at the right time could gain insights into the P2P network, so a multicast eCDN approach is considered much more secure, and because the Wide Area Network (WAN) is the most expensive part of the enterprise network, people want to protect it, which is why Ramp can provide benefits of low utilization of the WAN for streaming video.

Ramp’s Omnicache offering does what is says on the tin, automatically caching video closer to end users to reduce traffic, while the multicast protocol is seen as the most efficient way to securely stream live video, as this sends a single video stream to everyone in the audience without guzzling more bandwidth than is necessary. Ramp’s P2P technology works much the same as similar offerings, taking a simple browser-based WebRTC approach capable of turning devices on the network into peers for sharing resources and enabling real-time communications while reducing friction against user participation.

For Ramp, it has the most users on multicast, yet its Omnicache product offering is the biggest revenue earner for the company, while P2P is the fastest growing arm of the three-pronged business model.

Interestingly though, Stanton explained that P2P is still the least efficient of the three in an eCDN environment, achieving bandwidth savings of between 70% to 80%, while its Omnicache technology can save something like 94% to 99% of bandwidth on the enterprise network, but even this is eclipsed by the multicast protocol which consistently saves 99% of bandwidth and is also the most secure due to being 100% behind the firewall, we are told.

However, multicast runs into a problem because of the impending end of support for Microsoft and Cisco multicast servers, combined with the shift away from Flash. Ramp’s Multicast+ technology claims to be the only multicast method for HLS and DASH video – overlaying existing network infrastructure to deliver stable video to all viewers by acting as common distribution infrastructure for all enterprise streaming platforms.

Stanton responded with a not-so-subtle suggestion that Ramp could be next in the takeover crosshairs. He claims Microsoft has triggered an M&A storm – shaking up the eCDN industry in a positive way that has sent Ramp’s valuation rocketing overnight.

Experience tells us to take these press-friendly M&A nuggets with a pinch of salt, rather than gospel, particularly in a field like P2P in which people have been promising explosive uptake every year for the past four or five years.

“Someone had to light the match, and we have to deliver what they need. We have patents in multicast so that makes it hard for people to just jump into this market, they must acquire their way in,” said Stanton. We are informed these are “very effective” patents related to Ramp’s method of using forward error correction in UDP multicast streams.

So, by continuing to integrate Ramp’s technology in Microsoft Teams together with Peer5’s, Microsoft becomes a differentiator for multi-national enterprises with thousands of employees licensing the Teams platform as their go-to conferencing platform of choice. Having this eCDN flexibility is a no-brainer from the Microsoft point of view, yet a rival communications platform could be shrewd, by acquiring Ramp’s intellectual property in its entirety and removing its technology from Microsoft Teams altogether, as well as others where Ramp is integrated.

However, the impression from our conversation with Stanton is that no one wants this to happen. This is a tightknit community and Stanton did his best to downplay any pot-stirring we attempted, using that dreaded word “frenemies” to describe Ramp’s peers.

“Some customers have a preference for others like Peer5, so there is a need to integrate multiple methods into the infrastructure,” he added. However, noting that Peer5 has been picked out by Microsoft for its simplicity could be interpreted in different ways.

We mentioned StriveCast earlier, a German start-up with which we think Ramp shares more DNA than it does with Peer5. Not only are both Ramp and StriveCast eCDN models integrated into MS Teams, but OTT video software developer Kaltura is another company leaning on both Ramp and StriveCast for eCDN support for business customers. A key difference is that Strivecast has an operator customer with Swisscom, while Ramp’s offering is not so much targeted at the operator market.

That said, since pivoting away from the CMS space in 2015 after selling off assets, the now 30-person Ramp team has been fully focused on enterprise. The company has of course looked at OTT, before and since Stanton took the co-CEO position in early 2019, but the company has not seen anywhere near as much demand in the media sector to propagate its technology. “We don’t see the likes of Comcast etc. taking advantage of P2P,” is a comment that could go either way in the next few years.

There was time for a quick case study before wrapping up, as Stanton told us of a recent UK government department which rolled out a program using Ramp technology to get people back into the office. This client initially licensed enough for 1,000 concurrent users, but decided almost immediately to bump this up to 2,000 just in case, which Stanton highlighted as an example of how flexible not only Ramp’s technology is, but also the ease of its licensing structure, as no one need break the bank or worry about sneaky additional fees.