Akamai: We're a Cloud Provider, Not a CDN

During Wednesday's first-quarter earnings call, Akamai Technologies Inc. (AKAM) CEO Paul Sagan might have signaled a shift in describing the company as a cloud computing provider, moving away from dreaded term "CDN" (content delivery network).

According to the transcript of Wednesday's call you'll find only about 10 mentions of "delivery" or "content delivery," some of which are tied to the description of what other competitors have to offer. But do a search for "cloud" or "cloud computing" and you'll see that Sagan mentioned those terms 14 times.

More important than the number of times those terms were used is how they were used. Over the call and in the question and answer section, Sagan pointed to the opportunity that the company sees in offering cloud services.

"As our clients evolve more and more to take advantage of cloud computing, we're continuing to invest in even more advanced solutions to help them realize the full potential of network computing over the Internet," Sagan said.

While acknowledging that cloud computing "happens to be the phrase of the day that everyone wants to use," Sagan went on to justify how Akamai and its distributed architecture fit into the market for cloud services.

"It's really about network and distributed computing, and virtualizing infrastructure rather than dedicating a machine, or a license, or a person for each instance of an application or each end-users use of it," Sagan said.

It could be, in fact, that Akamai's always been a "cloud computing" provider. But now that the marketing jargon has become "hot," they are looking to take advantage of that.

In fact, Sagan suggested that Akamai was offering "cloud computing" services long before they were hip. Referring to cloud computing as "the idea of dynamic, adaptive computing capabilities," Sagan said, "This is an idea that we've been talking about at Akamai since we started more than 10 years ago."

Sagan went on to point to the company's edge computing and application acceleration offerings as examples of cloud services"

"We're already delivering on much of the promise of cloud computing with our edge computing offerings, which we introduced almost six years ago," Sagan said. "This is where we host and deliver applications from the Akamai cloud. The tens of thousands of servers we control around the world and manage like one big resource on behalf of our clients.

"In addition, our Application Acceleration Solutions, which we began rolling out in 2005, are designed to offer a cloud-based solution to the majority of enterprises that want to maintain a centralized computing infrastructure and make their applications available to a globally-distributed user base."

While much of the broader CDN market is focused on more commodotized bit delivery for media and entertainment customers, it will be interesting to see if Akamai's new cloud messaging starts to catch on.

Disclosure: No positions

Comments

[Matthew Gal...:]

I'm not sure that I agree with your last sentence, "catch on". Akamai revenue is 4x the size of the next largest player in the market Limelight and outgrew them even on a percentage basis in 2008. Akamai's. Application delivery has been growing strongly, and the cloud branding strikes me as being more relevant to investors than the customers buying their services.

May 01 08:30 AM

[Lightway:]

Glad to see a mainstream CEO is calling cloud computing for what it is - "the phrase of the day that everyone wants to use." Your analysis that they are using the "cloud" term to take advantage of marketing services they have already been using is very astute, and glad to see more people picking up on this, as there is nothing revolutionary nor disruptive about the cloud.

Cloud computing has been around since the .com era. There is nothing new about it, it's just a marketing theme along the lines of Web 2.0. I guess since I've been using TurboTax on the web, I've been using "cloud computing" for over 10 years now.

Matthew makes a good point, the cloud branding is there for investors.

Cloud is just sexy terminology to make investors excited, but it's really just a term for something that has already existed for many years now.

Personally, I am hoping to see more adoption of "the Grid," which is in its infancy, and has more disruptive potential, than "the Cloud."

Check out XtreemOS, which is a pioneer in real-time, WAN based grid computing:

www.xtreemos.org/

May 01 07:34 PM