Is Limelight Networks Going to Buy This Security Company

Limelight Networks (LLNW) has been adding executive leadership to the ranks over the last month. A few weeks ago, they hired an SVP with experience in mergers and acquisitions. On April 10, 2014, LLNW appointed Gray Hall to the Board of Directors, where he is filling a spot vacated by a previous Board Member who left to pursue other interest. What makes this appointment interesting is that Gray Hall also happens to be the Chairman, and CEO of Alert Logic. Alert Logic is one of the the leading Security-as-a-Service MSSP. Alert Logic recorded $42.2M in revenue in 2013, has more than 2400 customers, and is growing 40% annually. Is LLNW getting ready to acquire Alert Logic?

Is Limelight Networks Going to Buy This Security Company, Alert Logic

According to Forrester Research, Alert Logic is a leading “Emerging Managed Security Service Provider.” The security portfolio for Alert Logic includes intrusion detection, log management, application scanning, web application firewall and network monitoring. They are what you call a “hot” cloud-based security company that is growing rapidly, has a large customer base, and has the ideal product mix. They kind of sound like a combination of Splunk, FireEye and SourceFire. Do I think LLNW will acquire Alert Logic? No. However, I might be in for a surprise.

Conclusion

If Limelight Networks buys Alert Logic, they will become the #2 CDN in the market place, surpassing EdgeCast and Level 3. In addition, LLNW will become the leading CyberSecurity CDN surpassing Akamai and Incapsula, at least in the short term, until Akamai acquires another security company. Of course, this is only from a product point of view. If LLNW acquires Alert Logic, it will be the biggest CDN event in history, on the same scale as when Akamai acquired Speedera, solidifying its position as the dominant CDN. An acquisition would benefit the entire CDN industry, and greatly impact the valuations of all startup CDNs. LLNW understands there is no way they will beat Akamai at the CDN game, however, in security space, there is still room to capture a large percentage of the market, in my opinion.