Due to popular demand, we’re continuing with this series, publishing it quarterly. During our research efforts, we sometimes run into some interesting developments. When something happens to a startup in the CDN industry, we want to know about it, what happened and why, so we can learn from it, collectively. At the top of the list, something sad happened.
Nuu:bit Shuts Down
Our friends at Nuubit, previously known as Rev Software, have decided to close their doors. The startup CDN raised a few million in a private round and employed a little more than a dozen people. For some reason, they couldn’t build enough momentum to see this venture through. Initially, the company developed a content delivery solution for optimizing mobile apps in the wireless last mile. Thereafter, they found out there wasn’t enough demand for this type of service, so they transitioned into CDN services. The engineering team was extremely talented and the technology stack impressive. However, the sales strategy needed work and we voiced this concern to them a few times over the years. Moral of the story, sales and marketing are just as important as having a great tech stack.
Imperva Shuts Down Incapsula.com Website
Sometimes companies do things that make you scratch your head. This is one of those times. For some reason, Imperva decided to shut down Incapsula.com and redirect traffic to this information page. In doing so, they have shut down the sales pipeline for online ordering. Instead, prospects must now call in and get a quote. Very inconvenient. Why did Imperva do this? Beats us, the strategy doesn’t make sense. One interesting data point, of the twelve execs listed on the website, only 1 has a CDN background. With this decision, they can kiss some of their SMB / mid-market business good by.
Akamai Disses Edge Computing
Akamai has decided to put all of its eggs in one basket, security. As a result, the CDN industry is slowly splitting into two segments, security and edge computing. Traditional CDN services like small file and large file delivery, video streaming, and dynamic site acceleration are a commodity. There is little to no differentiation in these services between competitors. At this point in the game, the only way forward in building a profitable business model in the industry is to focus on security or edge computing. It’s too expensive to do both, even for Akamai.
Akamai’s focus on security will eventually pit them against Palo Alto Networks, Fortinet, Cisco, and so on. Nothing wrong with that, the security industry is huge. However, they will have to acquire a boatload of security companies in the next couple of years in order to compete effectively against the big boy security companies. And no, Akamai does not have an edge computing story, regardless of all that buzz coming from their ranks. They do have a nice infopage that talks about cloud computing and edge workers is nothing more than a CDN feature disguised as edge computing.
Cloudflare, Fastly, StackPath, and Limelight Networks are the leaders in the CDN edge computing segment. To start, they have introduced edge functions. Later, they will support features like containerized microservices at the edge and introduce the CDN database. This segment is focused on taking on AWS, GCP, and Azure in the compute/database business. Their hope, to steal away ecommerce and gaming clients. If any company wants to consider themselves a true edge computing CDN, they must have the features to steal customers away from AWS who are using RDS, EC2, etc.
New Segment: Akamai, Cato Networks, and Netskope
As the industry breaks into two segments, the security segment now has three companies in it – Akamai, Cato Networks, and Netskope. What is the core requirement of being in this exclusive club? The company must build its security stack on company-owned CDN infrastructure, not AWS. Company-owned infrastructure means the vendor has direct access to the network, routers, servers, etc, and they can do whatever they want with it. Company-owned infrastructure is important because it allows these vendors to optimize every inch of the stack, from the kernal to the NIC to the routing to the switching, etc.
Instart (Previously Instart Logic)
Whatever happened to Instart? Three years ago, they were on top of the world, leading the industry in product innovation. In short, they were a CDN darling and everyone wanted to be like them. Then, for many reasons, the company hit a brick wall and it’s been a revolving door for executives. The exec team in place today is the 3rd one in so many years. First and foremost, Instart is a CDN and CDN is no more than a global technology stack. You build services on top of that stack. Instead, Instart has come up with three products they call DX Cloud Tags, DC Cloud Ads, and DC Cloud Web. Weird. In all honesty, Instart needs to do a product refresh or maybe a radical product transformation.
Fastly IPO Coming Soon
This is the biggest news in our ecosystem in the last 12 years. Finally, we will have another company representing the industry in the public markets besides Akamai and Limelight. Fastly is the super cool startup that will be worth billions, with an “s” at the end. They are a leader in the CDN edge computing segment, and this segment is going to take the world of edge computing by storm. We’ll be publishing a market analysis brief on the subject in a few days.