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Global vs. regional service providers: weighing the options

(Image credit: Image Credit: Flex)

When expanding into new a new market or territory, finding the right technology partners is critical to success. While many service providers in DNS, content delivery (CDN), and cloud compute have global networks with wide reach, they don’t always address the needs of a business seeking to reach key constituencies in different markets around the world. Some markets, such as China, present unique challenges and your application can benefit from the use of specialised providers based in those regions.

As we approach the end of the year, many companies are looking at their goals for next year. Typically, there are two key drivers: key performance indicators (KPIs) and budget. This presents a great opportunity to evaluate whether your company’s current mix of providers is meeting your needs. Adding a regional provider to your mix can often help you cut costs while achieving a business objective in a key market, but there are there are a few key considerations to keep in mind when evaluating that can help you avoid some of the pitfalls that come with working with multiple vendors.

Delivering applications in other countries

On the surface the internet feels ubiquitous - beneath the hood however, it’s anything but.  The mechanics of delivering your bits to users in different countries can vary dramatically. For instance, many are familiar with the so-called Great Firewall of China, a giant perimeter network that inspects all traffic that flows in and out of China. Everything that traverses that Firewall is inspected, and the government can decide to reject it. Singapore has implemented a similar filter using DNS to inspect web requests; if you go to a webpage that the government deems unethical, it will prevent the user from connecting and display a warning. Turkey has also made headlines for blocking entire sites like Twitter, Wikipedia, and YouTube in response to content that federal officials took umbrage with.

Often there are also regulatory hurdles involved. China provides another example here - if you have content hosted on infrastructure within the country you need to procure an internet content provider (ICP) license, which registers you with the government. Similar challenges exist in several countries across Asia.

Beyond the regulatory landscape, some regions also have technological hurdles that make it very difficult to deploy infrastructure locally. When you’re looking to better service users in one of these areas, it’s critical that you do it with a partner who is based in that area. They will have a deep understanding of the market and the unique way the internet works there, and can help to ensure you’re complying with local rules and regulations.

CDN and cloud providers are not immune to these technical and regulatory challenges, which often means larger, international providers haven’t always chosen to go into these markets as deeply as one might expect, either because it’s difficult or the return on investment is low. In countries like Brazil and Turkey - nations that are both very well connected to the internet – these challenges create an opportunity for local players to build compelling offerings. These local providers are able to flourish and build businesses that complete with the global titans because they perform so much better in that region.

Go global or stay local?

A benefit of working with one of the major CDN providers is that they may offer 20 different services – some around content protection, some around security or video acceleration and so on. In many cases they can offer additional technologies and services that can be very beneficial.

As your company grows though, often the fundamental reason you chose the provider to begin with – accelerating your traffic – becomes much more important, and this is where adding a specialised local provider is often worth looking at. Once you begin to think about your user contingency in South America, for instance, your company will benefit from a specialist who is focused on one problem in one region. Instead of getting 20 different services from them, you get the one service you absolutely need in that region.

So, which is better: a global or a local service provider? It comes down to the objectives of your business. Most companies are looking to serve a global audience, but is there a region or specific countries that you want to improve performance for or go to market in? The breadth of services of a larger provider can be valuable when you’re building a company or online presence, but sometimes depth or reach in a particular region is more useful. They each serve different purposes, and one is not necessarily better than the other.

The good news is that these days the question of “global or local” is becoming less of a an ultimatum and more of a choice, as intelligent DNS platforms and infrastructure as code frameworks like Ansible and Terraform allow you to escape vendor lock-in and use the right tool for the job.

Managing multiple service providers

Companies often start out by using a large provider’s proprietary APIs or technologies because they are good shortcuts to getting a product developed and launched. At a certain scale though, as companies look to go multi-cloud, multi-DNS, and multi-CDN, a new challenge presents itself: these providers’ features were not always designed to be interoperable, and all of the features you rely on might not always be available from every provider.

Avoiding vendor lock-in is a critical issue to consider from day one of building your application. It is a good practice in general to have more than one vendor that can serve your core needs as a way of protecting and future-proofing your business. Is your vendor going to suddenly raise prices a key region? Are they going to discontinue a product you rely on? A best practice is to plan for these contingencies: understand what the common functionality is across all of your providers, and then implement or build tools that will allow your application to be as portable and platform agnostic as possible. 

Creating the right mix

Owning as much of the stack as you can and building your applications to run on any platform future-proofs your business so you can make easy moves when your business objectives change. The less locked-in you are to a vendor, the easier it is for you to adjust to market conditions.

Global providers offer a compelling way to get your application to market, but each region of the world can have its own unique set of technical and regulatory hurdles that these vendors are not always equipped to handle. Working with a regional provider is often the best way to navigate these challenges, and their focus can also bring performance benefits and cost savings. It’s important to consider your objectives and your market position as you work to find the right mix of providers. Whatever mix you end up with, the result will be increased agility that can help you react to changing market or business requirements, redundancy that protects against outages and vendor lock-in, and increased reach, presence, and performance that will help your business succeed in any market.

Jonathan Sullivan, Co-founder, chief product officer, NS1
Image Credit: Flex