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Akamai is launching an edge cloud network called Gecko
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The move builds on its earlier focus on building core computing power in centralized locations
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Analysts said Gecko demonstrates Akamai is serious about the cloud and could give it an advantage over hyperscale and CDN competitors
Like Ron Burgundy, Akamai wants you to know its cloud is kind of a big deal. Or at least that’s the goal, anyway.
The company took the next step in its quest to become a cloud computing juggernaut with the launch of its Generalized Edge Compute (Gecko) initiative, which will see it deploy compute support for virtual machines in 100 cities by the end of the year. The announcement coincided with the company's Q4 2023 earnings report.
The 100 cities will include the 25 core sites Akamai launched by the end of 2023 as well as 75 new Gecko sites. Already, Akamai (NASDAQ: AKAM) said it has rolled out Gecko capabilities in nine cities across eight countries, with a 10th city expected to launch before the end of Q1 2024. Over the next several years, the company intends to expand its Gecko footprint to “hundreds” of cities.
The key here is building a distributed network (not necessarily a decentralized one, that's a whole different thing) with enough computing juice and proximity to serve modern applications.
Akamai Product VP Jon Alexander told Silverlinings the company already has a service called EdgeWorkers that allows customers to deploy lightweight JavaScript functions at the edge of its content delivery network (CDN). But these functions are resource-constrained and that's where Gecko comes in. The new service will offer a bit more horsepower for things like inferencing, database calls and more, he said.
Gecko’s launch builds on Akamai’s recent efforts to build core compute assets in 25 cities following its $900 million acquisition of Linode in 2022.
Dave McCarthy, IDC’s Research VP for Cloud and Edge Services, told Silverlinings that Gecko can essentially be considered “phase 2” of Akamai’s Linode integration effort. He added it’s proof the company — historically known for its CDN — is truly serious about its cloud business.
Entering the era of edge
But why is Akamai focusing on the edge?
Brandon Medford, a senior principal analyst at Gartner, explained that while edge cloud won’t replace centralized computing “some modern application architectures benefit greatly from performant, optimized, secure and distributed platforms.” That’s where Gecko can bring home the bacon.
“If Akamai can convince customers of its greater power compared to CDNs and its greater reach compared to hyperscale clouds while aligning that to germane use cases, that integration will prove critical to its Connected Cloud strategy,” Medford said.
Alexander said there's one other problem Akamai has to solve to find success: helping customers figure out how to deploy and manage distributed workloads. He stated that for the most part enterprises rely on and have architected their workloads around the idea of running in one or two key cloud regions. But to get them comfortable with running in Gecko's ultra-distributed world, there has to be some hand holding and new tooling.
“It won’t be as simple as putting the service out there,” he said. But help is on the way.
Later this year, Akamai plans to add containers to the mix and longer-term is targeting the roll out of automated workload orchestration.
Closing in on the competition?
In terms of competition, McCarthy said it’s true hyperscalers are also pursuing edge strategies but noted “their DNA is in hyperscale data centers and they don’t have the same reach as Akamai with its 4,100 global points of presence that has made it the leading CDN provider.”
On the CDN front, he added other providers are adding edge compute capabilities but “those are mainly limited to serverless functions” rather than generalized compute services.
“If Akamai is successful, they will have brought together the worlds of cloud computing and CDN in a unique way,” McCarthy said.
Still, there’s one big hole remaining in Akamai’s strategy: cloud services. Amazon Web Services and Microsoft Azure each offer more than 200 cloud products and services. So there’s a big gap to bridge there.
"As the world becomes more multi-cloud focused, I can envision customers using a major cloud provider - or two - in conjunction with Akamai to meet the performance and scalability needs of AI applications," McCarthy concluded.
Separately, Akamai reported its fourth quarter and year-end earnings at the close of market today. According to the release. company revenue for the fourth quarter was $995 million, a 7% increase over fourth quarter 2022 revenue of $928 million and a 7% increase when adjusted for foreign exchange. Total revenue for 2023 was $3.812 billion compared to $3.617 billion for 2022, up 5% year-over-year and up 6% when adjusted for foreign exchange.
Akamai's stock (NASDAQ: AKAM) was trading at $125.05 down 2.42% today.
This article was updated on Feb. 13, 2023, at 5:08 pm.