Apple Dropping Akamai in Favor of Google? I Don't Buy It

That's the question that dozens of people have been speculating on and asking me about this morning. Swiss American Securities, a division of Credit Suisse is saying that it has learned that Apple will no longer use Akamai. They see Apple dumping Akamai for a Google-based content distribution network and expect Apple to announce that next week at Macworld.

I don't have any details on this "rumor" either way, but I highly doubt it and don't believe the information. Apple has spent many years working with Akamai to get the iTunes service down to a science and Akamai has a large infrastructure in place specifically for delivering live QuickTime content. I don't see Google building out a QuickTime infrastructure and supporting the kind of delivery Apple needs. I know many will say they are Google, they can build anything they want. Yes, they can, to a degree. But what would Google get from delivering Apple's content? How does this tie into Google's core advertising business? And what does Apple get from this? Maybe a lower price but it would have to be more than that for Apple to move CDN providers.

I just don't buy it. I don't see any value that Google or Apple would get from doing this. Now Apple could work with Google on some video initiatives and partner on things for the iPhone, Apple TV and what not, that would not surprise anyone. But replacing Akamai for Google for all of its content delivery, I don't see the rationale.

There was an Apple RFP out in the market a few months back for some CDN business, but it was not for all of their content, was not a large deal and from what I understand, Apple pretty recently re-signed with Akamai.

Update: Swiss American Securities just called me after reading my blog post to let me know that they have no record of any at Swiss American Securities saying that Apple plans to drop Akamai and switch to Google for their content delivery.

Many analysts all sent me the same supposed quote this morning from Swiss American Securities but interestingly enough, no one seems to know where the quote actually came from, who said it, and where it was first reported.

Another reason why I am glad I am not a financial analyst. Way too much speculation without facts.

Comments

[Grammar Guy:]

"I don't see the rational."

Don't you mean:

"I don't see the rationale."

2008 Jan 10 04:41 PM

[Grammar Guy #2:]

There is another mistake in that same sentence ("its" not "it's")

"But replacing Akamai for Google for all of it's content delivery, I don't see the rational."

should be

"But replacing Akamai for Google for all of its content delivery, I don't see the rationale."

2008 Jan 10 04:58 PM

[Ira Pfeifer:]

This rumor floated around my office today as well, and I'm betting this all stemmed from a misattributed and misinterpreted quote of tech pundit Robert Cringely's 2008 predictions column from last week.

2008 Jan 10 05:12 PM

[ET:]

Apple may simply be looking to create a situation where they're capable of multicasting from the iTunes hub more efficiently; and maybe don't "buy it" because you don't understand the issues surrounding webcast/ broadcast.

2008 Jan 11 11:05 AM

[brewer:]

Apple should have Akamai and Google as well. Video streaming and viewing is going finally breakthrough on iTunes, and that it a huge bandwidth hog.

Perhaps Apple has a higher def video system they are ready to roll out. iPod touch is really taking off for younger people watching video on the go.

2008 Jan 11 11:18 AM

[ET:]

Yes Brewer. Apple may be looking to create a secondary system on top of their existing relationship with Akemai – let’s call it a privately peered network (like an access road built right next to and running along with a major highway) tied into the major data centers because of the stress on Akemai’s network (with Apple's new offerings) - it would be increased so dramatically due to their new content offerings that they’re looking to limit any possible liabilities/ points of failure that could/ would affect their products, services and stock. Secondly, the solution that I've all to briefly mentioned would reduce their operating expenses with Akemai dramatically.

2008 Jan 11 11:29 AM

[NDG:]

For what it is worth, here is the link to Cringely's prediction...
www.pbs.org/cringely/p...

Funny how rumours build...

2008 Jan 14 04:16 PM