Commentary: Competitive Landscape Impact If Verizon EdgeCast Acquires Distil Networks

Now that we’ve had a day to digest the news of Verizon EdgeCast partnering with Distil Networks, and the possible acquisition in the next few months, what impact if any will this have on the bot mitigation segment and CDN space? Before we answer, lets name some of the bot mitigation players that come to mind.

  1. Akamai Bot Manager (Cyberfend)
  2. Distil Networks
  3. Shape Security
  4. Shield Square
  5. WhiteOps
  6. PerimeterX
  7. Unbotify

With the exception of Akamai, most on the list can be defined as pure-play bot mitigation companies, especially Distil Networks. Each startup offers their own technology to ingest data, process it, baseline anomalies and mitigate the threats. Some techniques are more innovative than others, but overall they all solve a specific threat. When we look at the bot mitigation segment from a business model perspective, we see that it solves a specific threat, namely bots. And one day bots are going to become magnitudes of order worse than they are today – more sophisticated and harder to stop because they will incorporate some form of AI or machine learning capabilities. However, bots solve one specific problem in a world where attackers are throwing dozens of problems at customers, some of which are outside the scope of bot mitigation.

Therefore, we believe in the long term that bot mitigation is going to exist only as feature of the CDN, alongside WAF and DDoS Mitigation. It will not be a stand alone service and segment generating hundreds of millions of dollars. It will suffer the same fate as DDoS Mitigation – once DDoS Mitigation was a service of the pure-plays but now it works best as a CDN feature. And in the next 24 months, we predict the most innovative bot technology startups will get acquired, which is an accelerated time frame and the result of Verizon acquiring Distil Networks. And there are a lots of potential acquirers: Akamai, Cisco, Palo Alto Networks, Google, Microsoft, AWS, and so on.