Imperva, the pure-play security company, has agreed in principal to acquire Incapsula, the leading Security based CDN. Incapsula is different. Most CDNs in the ecosystem offer security as a subset of CDN services, whereas Incapsula offers CDN services as a subset of security. For the time that Incapsula operated as an independent company, it was refreshing to see a different twist to the standard CDN business model.
Incapsula is likely to become a productized service within Imperva’s extensive security offering. According to the press release, the target market for Incapsula is online banking, online gaming, and online retail. The acquisition enables Imperva to strengthen its cloud security offering, but it’s bound to impact the CDN business. Achieving success in the CDN industry requires extreme focus, dedication, and passion for all things CDN. Fastly is a great example, they are focused on providing the best CDN performance possible, and so far they have been ridiculously successful. 
Incapsula’s CDN Business
CDN startups do best as pure-play CDNs, so it’s going to be interesting to see what Imperva does with the CDN business. Is it going to ramp it up? Or is it going to let in disappear into their security offering. One thing is for sure, if Imperva plans to ramp up their CDN business, it’s going to run into Akamai in every account. It’s safe to say that Akamai is present in 90%+ of all major web properties, including the top Alexa websites, Fortune 1000, and most internationally known brand name websites.
In my opinion, I believe Incapsula had more potential as a standalone Security based CDN in two areas: achieving a higher valuation, and making a bigger impact in the CDN ecosystem. The Incapsula business model needed a few tweaks here and there, but it had tremendous potential. I’m sure they’ll do well in cloud security, but in the CDN website acceleration business, time will tell.
Incapsula Dream Team
I believed that Incapsula was capable of growing faster and bigger than Imperva. There is one person in the world that could have made it happen, and he works for Akamai. His name is Ronni Zehavi, the co-founder of Cotentdo, whom Akamai acquired. Ronni accomplished something in the CDN world that was unique, and unheard of. Within three years from launch, and about $36M in funding, he sold Cotendo to Akamai for $268M. Personally, it was shocking and surprising.
I can already picture it, Ronni quitting Akamai and joining Incapsula, everyone in the CDN ecosystem would be nervous, some more than others. If Ronnie had that much success with his first CDN startup, just imagine what he could do with his second CDN startup, Incapsula. He would bring Incapsula tremendous experience having worked for Cotendo and Akamai. Plus, having Shlomo Kramer and Ronni on the same team is by all means the CDN Dream Team. Ronni would be running the show, Shlomo would be crafting the security products that baffles the competition, and I would be selling it like mad man:)
Why would Shlomo and Ronni want to do this? Because Shlomo could possibly triple his $800M net worth, and Ronni could be in the “billion dollar club”. Although there’s more to life than money, it’s cool to be in the billion dollar club. And the little that I know Ronni, spending two hours with him personally on why I should join Cotendo, he is not content with a home run, but wants a grand slam, just like many of us. Just look at his resume, it speaks volumes as to his entrepreneurial makeup.