Akamai’s Edge

8/13/2019 Akamais Edge

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Akamais EdgeBDMX8013Business Consultancy Strategy

By Rodziah Ahmad (S93935)Universiti Utara Malaysia

Session 2013/2014 Semester 1


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Business Issue Pricing on the newly introduced advanced product.

Companys strategy for online video.

Decentralized or centralized network structure.


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Introduction The business starts to face problems in 2009 due to rising

numbers of competitors (fivefold compare to two years back)in online content delivery.

Tight competition due to online video demand.

Akamai has undercut price to half and demands from existingcustomers were slower.

CEO of Akamai since 2005, Paul Sagan has to decide to

determine direction for Akamai for the next 5-10 years.


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Business Analysis- Content Delivery

Network (CDNs) Internet Delays and Congestion EXHIBIT 1


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When users login and requesting data (red line) to anycompanys server, via Internet Service Provider (ISP), the data

will be transported again (red dotted line).

Sometimes, when an internet server or line was broken oroverloaded, the data will be lost.

The companys server can detect whether the data requested

are displayed in the users screen. If it cannot detect therecipient signal, it would resend the data until the confirmationarrived or it concluded there was fundamental problem.

Detection and recovery system makes the system slow.

To overcome, network operators had cooperative agreementamong themselves for peering but it increased the delaysover long distance data connection.


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CDNs idea : place network of servers in strategic location asAkamai has the largest network around the globe.

Content Delivery Networks

(as solution)


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CDN provider sold their services to companies to improveperformance of their website. The contents will be parked atthe server close to most congested users (Example: Asias userswill be directed to Japans server, rather than server in SanFrancisco, etc.)

They had succeed in accelerating their clients webpage andreduced internet congestion.

NEW PROBLEM: Dynamic webpages , real time. Therefore,decentralized server is not suitable. Faster and more reliablecentralized servers are required.


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History of Akamai Founded in 1998 (Tom Leighton, Mathematics professor at MIT

and his PhD student, Denny Lewin)

Objective: to come up with solutions for the internets delay

and congestion problems.

Funding by venture capitalist Battery Ventures and PolarisVenture Partners.

Akamai became market leader. IPO in 1999.

2009, Akamai was the market leading for CDN. 60% marketshare in revenue; 60,000 servers in approximately 1,000 networksaround the world; 1,700 employees.

Akamai handled 15-30% of all web traffic.


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The Edge

(highly distributed computing network) AkamaiDecentralized server Vs. OTHER CDNs - Centralized

server

Advantage: real-time knowledge of the traffic solution => faster

response times and lower error rates.

Benefits of decentralized network has brought issues:

1. Different customers valued fast response times differently.

2. Quantify the effect of the network design.

3. More uncertainty how demand and technologies would evolve.

4. Costly software development and control.


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Akamais Product Linewas build up on three technologies

Technologies Product Lines Specific Products

Distributed (static)content delivery

Distributedcomputing

Accelerated datacommunication

Specific contentdelivery

Complete Websitedelivery

Applicationacceleration

Other

Technology essential for product

Technology enhances product

HTTP Content Delivery,Streaming, HTTP download, FTPdownloads, License Delivery,

Net storage

Dynamic Site Accelerator,EdgeComputing

Web application accelerator, IPapplication Accelerator

Global traffic management ,EdgeScape, Enhanced DNS,Consulting


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The CompetitionAkamai received competition from:

Standalone CDNs: At the height of internet bubble, there weremore than 50 companies providing CDN services. Major

competitor, Limelight focus on content delivery mainly formedia and entertainment segment. To sustain its market share,Akamai had Intellectual Property on all its three technologies.

Telecom networks: Example, AT&T (telecommunicationprovider) has set of customers and they offer content delivery

only.

Potential CDN customer themselves: such as Microsoft whombuild up their own CDN server.


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The Market for CDN ServicesAny firm requires website. Particularly can be divided into 4 segments:

Media & Entertainment:Largest segment (40-45% Akamais

revenue) and most competition. High content requirement.

E-commerce: (30% revenue). Requires more dynamic site andapplication acceleration.

High-tech:(20% revenue).

Companies that sold software and updates were downloaded over internet.

Companies selling software as a cloud computing service. Companies that requires acceleration for their internet-based enterprise

software. Example, Internet-based logistic system.

Government agencies (5% revenue)


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The Immediate Challenges To anticipated growth in video streaming:

Growth: From great to spectacular and requires heavy investment. Should

Akamai invest or wait for the evolution of internet?

Longer-term issue: Should Akamai stick with current distributed Edge network or shift to

centralized structure?


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Akamais Today (www.akamai.com)The product has been segmented into 5 solutions:

Grow revenue opportunities with fast, personalized webexperiences, and optimize customers Web site for mobile users.Aqua Web Solutions

Engage audiences with superior quality video, solve the challenges

of multi-device consumption and reinvent the software distributionchannel.

Sola MediaSolutions

Engage audiences with superior quality video, solve the challengesof multi-device consumption and reinvent the software distributionchannel.

Terra EnterpriseSolutions

Designed to provide superior cloud computing security, preventdata theft and downtime and mitigate Denial of Service attacks byextending the security perimeter outside the data centre.Kona SecuritySolutions

Operate a cost efficient network that capitalizes on traffic growthand new subscriber services without the complexity of building aCDN and interconnecting it across providers.

Aura NetworkSolutions

Documents

Akamai’s Edge