(Source: Shutterstock)
Akamai Technologies, Inc. (NASDAQ:AKAM) is the granddaddy of Content Delivery Network (“CDN”), in business for more than 2 decades and transporting an estimated 25% of all web traffic. Akamai provides more locations, or points of presence (“POPs”), than all of its competitors combined with 300,000 servers in 4,000+ locations.
To be clear, the CDN market is quite mature with little apparent upside apart from increased traffic over time. The market for CDN customers is close to saturation and enterprises tend to disappear once they reach a certain size. They employ their own performance metrics and often decide that they can do better elsewhere, leading them to abandon their existing provider in favor of a competitor. As an example, Netflix (NFLX) was once an Akamai customer but subsequently abandoned Akamai due to apparent performance issues.
Fastly - A Disruptive Competitor?
Another area of concern for Akamai are so-called upstarts such as Fastly, Inc. (FSLY), that claim to be market disruptors. In Fastly’s case, it claims to be disruptive by providing fewer but more powerful POPs with solid-state storage and large cache situated in strategic locations. By employing this strategy, Fastly believes it will improve the cache hit ratio for static applications and event-driven content. The improved cache hit ratio will compensate for the additional transmission time between source and server due to the greater distance away from the source. And the strategy will also lead to reduced costs as less POPs need to be supported. The rationale for Fastly’s approach is as follows:
They’ve all built their architectures based on the conditions that were prevalent 15 to 20 years ago. To their credit, legacy vendors actually made the right design decision at the time — back then the latency (the time taken for data to travel) from your home to an internet backbone, often over dialup, was
Digital Transformation is a once-in-a-lifetime investment opportunity fueled by the need for businesses to convert to the new digital era or risk being left behind. And the pandemic has dramatically accelerated this paradigm shift. You can take advantage of this opportunity by subscribing to the Digital Transformation marketplace service.
