In 2016, the war between the two juggernauts is likely to significantly escalate, as CloudFlare takes its Edge Security story to the boardrooms of the large enterprises. CloudFlare is a juggernaut, at least in the world of Edge Security (CDN + DDoS + WAF), so much so that their business model is more powerful in Edge Security than Neustar, Verisign, Arbor Networks and many others. And what does more powerful exactly mean? The ability to completely disrupt, destroy and transform the status quo of the DDoS + WAF market.
However, the story for 2016 is not really about Akamai vs CloudFlare, but about Akamai + CloudFlare vs Pure-play Security Market (Palo Alto Networks + Cisco + Symantec…), because that market is tens of billions of dollars bigger. For the moment, Akamai has skipped ahead of most other CDNs in the Edge Security space with the acquisition of Bloxx. But their lead will be short lived, since other CDNs are rolling out innovative Edge Security products later this year. By the end of 2016, 90% of CDNs will offer Edge Security, even if it’s an entry level offering. Therefore, Akamai must rev up its acquisition engine and continue to acquire pure-play cloud security companies.
For CloudFlare, 2016 is a do or die year where Q4 2016 revenue justifies the multi-billion dollar valuation. If CloudFlare reaches $300M in sales this year, they will become the #2 CDN in the world, surpassing CloudFront, Level 3, Verizon EdgeCast and Limelight. And by #2 we mean the most valuable CDN asset on the planet, since all CDNs mentioned above will likely be generating similar revenues. If Matthew Prince & Company can pull this off and sell $300M of Edge Security services, it will be a “how in the hell did they pull that off” moment. So if I’m Matthew Prince, I’m gonna rev up the PR Machine and deliver content for lots of bad guys, because that strategy has worked like a charm so far.