When Akamai announces that CDN prices are under pressure, does that mean that prices for the entire CDN industry are under pressure? We have to take into account that Akamai’s prices tend to be higher than the competition, just like AT&T and Oracle are in their respective industries. In order to find the more realistic CDN price points for data transfer, there is no better place to look then the pure-play CDN start-up ecosystem. Pure-play CDN prices reflect market prices. And by the looks of it, the data transfer prices haven’t dropped much for the last few years.
Let’s take a look at some price points for the 350TB/month and 5PB/month data transfer volume. MaxCDN, Fastly, Amazon and Microsoft have published pricing on their websites, so we can use these figures for analysis. At 350TB/month, the average data transfer price is around $.04/GB. The average price point for 5PB/month of data transfer is $.02/GB.
- MaxCDN: 350TB/month is $.035/GB
- Fastly: 350TB/month is $.04/GB and 5PB/month is $.02/GB
- Amazon: 350TB/month is $.04/GB and 5PB/month is $.02/GB
- Microsoft: 350TB/month is $.04/GB and 5PB/moth is $.025/GB
That leads to the question, are there some customers demanding $.01/GB on 10PB+/month of data transfer volume? Sure, but unless that customer is going to buy tens of thousands of dollars worth of features every month, CDNs, including Akamai should walk from that business. No reason to entertain unprofitable business.
Also, one must take into consideration the impact of feature set innovation on the pricing models. Akamai offers the most comprehensive feature set in the industry. However, Akamai doesn’t offer every feature out there. So if Akamai announces that prices are under pressure, maybe its because they haven’t been rolling out premium features fast enough.
DSA, FEO and even DDoS Mitigation Services (L2/L3) are kind of old news now. WAF has a couple of years of life left in it. If Akamai is experiencing pricing pressure, then it’s time they develop some premium features, or buy companies that have them. Biocatch, Shape Security, Signiant and many others would add depth to the Akamai product portfolio, which in turn would enable Akamai to charge higher prices, improving margins in the process.