EdgeCast Update – June 2014

EdgeCast has made an announcement that it has added 20 POPs to its current POP count, bringing its total to about 45, give or take a few. Included in the build-out is a massive expansion to its Sao Paulo POP.  Verizon owns a data center in Brazil, due to the acquisition of Terremark. Brazil is the fastest growing region in LatAm, but also one of the most difficult countries to build a POP presence. Bandwidth is outrageously high, peering between regions in Brazil is kind of non-existent, and shipping equipment into Brazil results in high import fees, tariffs, taxes, and so on. Deep pockets are required to build a POP in Brazil. For EdgeCast and Akamai, this is a good thing, since it is a barrier to entry, making it harder for the competition to build into this region. Akamai has the edge in LatAm right now, since it has several POPs in various LatAm countries.

As I stated before, EdgeCast is still the number 2 CDN in the ecosystem, and this expansion only solidifies their position even more. In third place is a tie between Limelight Networks and Level 3. EdgeCast is ramping up to take on Akamai in the international marketplace. On another note, I’m guessing once the contract between Akamai and Verizon expires, Verizon will switch all their Akamai CDN traffic to EdgeCast. I have no idea how much Akamai is paying Verizon, but I were to guesstimate, it’s between $50M to $100M per year. In a way, Verizon is to Akamai, what Netflix is to Limelight Networks. After the switchover of traffic, EdgeCast’s revenues should surpass $200M per year. Next up for EdgeCast is WAF and DDoS Mitigation. In my book, WAF and DDoS Mitigation services are a much bigger deal than adding POPs, because it changes the business model. CDN business model change is more difficult to accomplish than adding infrastructure. High five to the EdgeCast team for the infrastructure expansion.