What’s the impact to the CDN Industry if Limelight Networks (LLNW) acquires Alert Logic? Based on history, we can make some educated guesses. Let’s do a quick deep dive analysis into possible outcomes. For starters, the acquisition will go down as the second most impactful event in CDN history, in my view. By impactful, I mean that other CDN will have to update their product offering, or change their business model somewhat, in order to compete more effectively with the CDN that created the impactful event. The CDN that fails to change will be sidelined, never posing a threat to high growth CDNs. We have a few out there now, but I won’t mention any names.
A Limelight Networks acquisition of Alert Logic will change the entire CDN industry from the startup, all the way up to Akamai. If two CDNs are in a competitive situation, bidding on an opportunity where security is important, who will have the most leverage, the CDN with a WAF offering, or the CDN that has WAF, IDS/IPS, Application Scanning, Vulnerability Assessment, and so on. Limelight has the infrastructure, experience working with large enterprises, and talent to reemerge as the #2 CDN once again.
The only thing holding LLNW back at this point is their product offering. Alert Logic adds significantly to their security offering, enough so that it will catapult LLNW ahead of Akamai on security offering product front. However, with $1B in cash, Akamai will catch up in months when they buy more security companies. Below is a list of impactful CDN events over the last decade by ranking. I also included a section of events that had zero impact on the CDN industry.
Ranking the most Impactful CDN Events
- Akamai acquires Speedera Networks: game changer, solidifies Akamai’s leadership position for the next decade.
- Limelight Networks acquires Alert Logic: game changer, LLNW becomes a security based CDN with one of the most extensive security offerings in the ecosystem
- Verizon acquires EdgeCast: important impact on industry that will play out for years to come. Eventually, Verizon will invest hundreds of millions of dollars into EdgeCast infrastructure making them a more viable competitor to Akamai
- Akamai acquires Prolexic: game changer, This move starts the ascension of a new type of CDN which I call the CybserSecurity CDN
- Imperva acquires Incapsula: game changer, a pure-play security company merges with a traditional CDN creating a new business model
- CloudFlare acquires malware scanning service: game changer, CloudFlare tells the world “to the heck” with standard CDN business model, in essence skipping from edge security to endpoint like security solutions
Other Events with Minimal CDN Industry Impact
- Internap acquires Vital Stream: zero impact on the industry, negative impact to Internap resulting in $100M+ write off
- Limelight Networks acquires Eyewonder: zero impact on the industry, negative impact to LLNW resulting in $100M write off
- Akamai acquires Cotendo, Netli and others: minimal impact on industry, Akamai strengthens its already strong product portfolio Aftermath of Limelight Networks Acquisition of Alert Logic