Akamai’s WAN Opportunity, Glue Networks

In October 2013, Akamai announced a strategic partnership with Cisco, whereas Akamai would add its CDN functionality into the Cisco Routers, making Akamai a B2B CDN or WAN as-a-service; offering a first-mile to last-mile file delivery and caching service. The purpose of the partnership is to enable Cisco’s customer’s to exchange files more efficiently amongst each other, and cache 3rd party content in-branch, close to the users, for better performance.

While the partnership could potentially add hundreds of millions of dollars to Akamai’s top line, this amount would be trivial to Cisco, considering its size. Time is another issue; by the time the Akamai adds functionality to the router, and rolls it out into production, five years can pass. Time is not on Akamai’s side, especially if it wants to reach the $5B milestone by 2020. Akamai should continue on the path of solidifying the partnership with Cisco, but in the meantime, Akamai needs jump into the B2B WAN as-a-service market. There is one company that can help Akamai transition to this new market, Glue Networks. Akamai & Glue Networks is the perfect marriage, because there is no product overlap. The acquisition of Glue Networks extends Akamai’s functionality into the Cisco routers.

Glue Networks has developed a robust platform, that is validated and approved by Cisco. Glue Networks looks and feels like a Cisco router plug-in, that automates the configuration and management of the Cisco routers. On top of that, Glue Networks works through distributors and Value Added Resellers (VAR), just like Cisco.

Akamai should be able to integrate the Glueware engine into its Intelligent Platform, and create a 6th offering named “WAN as-a-service”. With the acquisition, Akamai inherits a huge knowledge the Cisco Partner ecosystem, plus gives it a deeper understanding of the Cisco router.  Glue Networks is as Cisco as a startup can be. The acquisition is also a backup, in case the Cisco partnership goes south for whatever reason. Glue Networks enables Akamai to expand into a whole new market.

Why would Akamai want to do this? Because the WAN market is more than 50 times bigger than the CDN market, totaling just a tad bit over $100B.