Akamai Makes Progress on $5B Revenue Goal But Misses Out On Opportunity of a Lifetime

It feels like Akamai is a different person this year. They’ve been very active buying companies, forging strategic partnerships, creating new service offerings, and most of all, acting like a CDN start-up. Akamai has shed its image of being the last one to the party – they are now a leader in the innovation business. Good for them, because being a $13B company is no excuse for acting like $100B company that swims in bureaucracy, processes, paperwork, internal fighting, and so on. Akamai reached $2B in revenues last year, and will likely reach $2.5B in 2015. If they do, they will be at the half-way mark of the $5B revenue goal set for 2020. Thus, Akamai needs to find another $2.5B in five years. All of Akamai’s recent activities are a move in the right direction, including the partnership with Trustwave and China Unicom.

However, Akamai missed out on the “Opportunity of a Lifetime”. They should have acquired Trustwave, not resell their services. Someone in the M&A department fell asleep at the wheel. This was a great loss for Akamai. The math is simple: Pure-play CDN market is $4B, and security market is $100B+. Next, since most CDNs use Trustwave ModSecurity WAF, with the exception of Incapsula, Akamai could have essentially dismantled the CyberSecurity CDN business model. Finally, Akamai could have transitioned from an Edge Security player, to a security powerhouse, offering security solutions from the corporate perimeter to the edge. Incapsula is the only CDN with that capability. Although Trustwave and Akamai are in different markets, the writing is on the wall, as the pure-play security sector and pure-play CDN market collapse into each other.

Akamai’s Recent Activities

  • Akamai and Trustwave form partnership. Trustwave will resell Akamai DDoS and WAF. Akamai will resell Trustwave Services
  • Akamai and China Unicom (CU) Cloud Division form partnership, where CU will complement its offering with Akamai CDN services
  • Akamai opens a SecOps center in Bangalore, which will be the largest operations outside of the US. The center will go online at the end of the year
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