Revenue per Mbps Comparison Metric – Akamai, Level 3 and Limelight

The CDN industry is a business of metrics, whether its the total amount of bandwidth (or data transfer) being delivered at any given moment, the cost of bandwidth as in price/Mbps, number of customers, average monthly revenue per customer, and so on. There is another important number that probably hasn’t been considered yet, which we’ll call the Revenue/Bandwidth metric. Keep in mind that some CDNs are more into the professional services than others – Akamai and Limelight are good examples.

Our goal is to capture the entire revenue stream, divide it by bandwidth, and derive a metric that can be used for comparison purposes. CDNs can use this metric to compare themselves to industry averages. Akamai’s and Limelight’s financials are public, so this is a good starting point. However, there are many caveats in this model, as the exact amount of bandwidth delivered is not precisely known. But we have enough data to plot out different scenarios, starting from the low-end of the bandwidth spectrum (delivery) to the high-end. Akamai is pushing around 30Tbps, Limelight is around 4Tbps, and Level 3 is about 4Tbps.

Takeaway: If a CDN like CloudFlare is able to sell CDNs services on an average of $5/Mbps, its better than Limelight and Level 3, and not as good as Akamai, which would be expected, as Akamai is at the high-end of the spectrum. Akamai charges premium prices for premium services.   (BW = Bandwidth)

 Summary of Revenue / Bandwidth Metric

Akamai 2014 Revenue – $2B

• Bandwidth High-end: $2B / 12 months / 30M Mbps (30Tbps) = $5.56/Mbps
• Bandwidth Mid-level: $2B / 12 months / 25M Mbps (25Tbps) = $6.67/Mbps
• Bandwidth Low-end: $2B / 12 months / 20M Mbps (20Tbps) = $8.33/Mbps
  • Largest single streaming event was World Cup match that was clocked at 6.48Tbps.

 Limelight 2014 Revenue – $162M

• Bandwidth High-end: $162M / 12 months / 7M Mbps (7Tbps) = $1.93/Mbps
• Bandwidth Mid-level: $162M / 12 months / 5M Mbps (5Tbps) = $2.70/Mbps
• Bandwidth Low-end: $162M / 12 months / 4M Mbps (4Tbps) = $3.38/Mbps
  • Limelight streamed a World Cup match that was 4.5Tbps

Level 3 2014 CDN – $200M

• Bandwidth High-end: $200M / 12 months / 4M Mbps (4Tbps) = $4.17/Mbps
• Bandwidth Mid-level: $200M / 12 months / 3.5M Mbps (3.5Tbps) = $4.76/Mbps
• Bandwidth Low-end: $200M / 12 months / 3M Mbps (3Tbps) = $5.56/Mbps
  • Revenue is estimate
  • Level 3 has 1,360x10Gbps = 13.6Tbps x 36% average utilization = 4.89Tbps (however, a big chunk is non-CDN traffic)