Akamai is no longer a CDN. To view them as a CDN would be a big mistake, especially for competitors in the cyber security business. The 3 most important questions + answers regarding Akamai’s competitive position in the market are as follows: 1) Who are Akamai’s two biggest competitors? AWS and Symantec 2) At what revenue mark does Akamai transition from being viewed as the top CDN to the top security company in the world? When Akamai’s Cloud Security business reaches $750M per year 3) Can the security industry as a whole stop Akamai? No. Akamai is no longer worried about CDN competitors. Their sight is on AWS and Symantec. AWS represents the cloud industry (AWS + Google + Azure) and Symantec represents the pure-play security industry. Akamai is a threat to every big security company out there, including Palo Alto Networks, Fortinet, Symantec, FireEye, Cisco, Radware, etc. And no pure-play security company has an answer to the Akamai threat.

And Akamai is already in the endpoint security business. In 2017, expect more acquisitions of endpoint security startups that will put them in direct competition to the Symantec’s of the world. Who would have ever though that the video streaming business would eventually impact Symantec and Palo Alto Networks. Having a large global network in place provides two benefits; 1) It can be used to stream big events and 2) It can be used to thwart DDoS attacks. And DDoS Mitigation is just a feature for the Edge Security CDN. And that global network is the #1 vehicle to detect and protect against threats. But having a global network to detect/protect against threats is only half of the solution. The other half is content acceleration, whether its internet traffic or WAN optimization. Therefore, the pure-play security giants are going to have a very difficult time competing against Akamai.

And Akamai’s security business is a 100% monthly subscription business. Palo Alto Networks and other pure-play security companies sell products in the form of hardware and software. Sure, they have monthly subscriptions, but they haven’t made the full transition to the cloud, and they will likely never will, since hardware + software is their bread and butter. And if Akamai is able to defeat the pure-play security industry, then it is able to compete effectively against the Cloud Trio of AWS, Google and Azure, because the Cloud Trio is not interested in security. Akamai’s next mission is to expand its endpoint security portfolio. The Bloxx acquisition has provided them with email filtering capabilities. In addition, they have a mobile SDK and client-side Java Script for the browser, so they are in the endpoint business. The next step for Akamai is to acquire a few pure-play endpoint security startups. Can Akamai double its security revenue in 2017? We shall see in December.

Akamai Earnings

• Q-4 2016 Total Revenue: $616M
• 2016 Total Revenue: $2.3B
• Q4 Performance and Security Solutions Category: $367M, up 17% yoy
• Q4 Cloud Security Solutions Category: $102M, up 41% yoy
• 2016 Cloud Security Solutions Category: $365M for 2016, up 43%