Akamai makes CDN progress

Principally known for its content delivery network (CDN) and streaming services, Akamai also sells its platform and software on a wholesale basis to network operators. These technologies enable carriers to deliver CDN services to their customers.
Akamai’s wholesale solution offers three options: operators can deploy its equipment in their networks, purchase ongoing CDN and streaming services via Akamai’s network platform, or use a hybrid approach of network platform and network equipment. These options allow carriers to tailor the way they work with Akamai.
Since it introduced the wholesale Aura hardware and service product line in March 2012, Akamai has established relationships with 10 carriers around the world. We expect this growth to accelerate as retail demand for content explodes and operators need quick access to scalable, affordable solutions.
Fast growth requires faster CDN go-to-market execution
We expect the need for CDN services to expand rapidly with skyrocketing bandwidth demand from consumer and business users. Content consumers expect videos to run in realtime over mobile and fixed networks, and they expect instantaneous results from their web searches. These requirements will surely continue to strain existing network infrastructure and spark increasing capital investments.
In this environment, it’s most likely too late for any carrier to attempt developing and deploying its own CDN infrastructure. To build and grow revenue from content services, carriers will have to purchase and/or partner to acquire CDN technology and platforms. We see Akamai using its wholesale platform to become a credible partner for CDN solutions. Indeed, 10 major operators have opted to use Akamai’s solution for their CDN efforts: AT&T, BT, Equant, Korea Telecom, NTT, Orange, Swisscom, Telefonica, Turk Telecom, and Verizon.
Akamai’s carrier strategy can expand opportunities
As the development pace of the CDN market increases, Akamai services are worth considering by carriers that need to expand or establish a CDN presence. Akamai works with its carrier partners to help them extend their CDN offers beyond the customer demands that catalyzed their original buying decision. Akamai has seen some of its carrier customers leverage and expand their CDN to address additional vertical and geographic markets.
Customers can jointly sell CDN services with Akamai, which not only helps the carriers but also gives Akamai a sell-through channel to additional end users. In this partnership, the carrier resells Akamai’s portfolio while leveraging its on-net CDN infrastructure.
Akamai, in turn, works with the carrier to help it differentiate its network offer, create value-added services, and increase its ability to generate new revenue. Of course, these additional sales also drive new revenue for Akamai.
Akamai has made a solid commitment to the carrier market
Akamai made its first foray into the network operator market when it introduced Aura Network Solutions in March 2012. Although Akamai competes with carriers in a variety of market segments, its wholesale platform enables carriers to start generating revenues from CDN services quickly and cost-effectively. Carriers can either license Akamai’s technology and embed it in their network (Licensed CDN), connect to Akamai’s network platform and white-label it to their customers (Managed CDN), or use a hybrid of the two approaches.
In addition to Aura, Akamai’s carrier partners can use its Luna Control Center to manage their CDN network as well as white-label it to their customers. Akamai’s software is also available as a service and on a licensed basis, providing a range of capabilities from network management and analytics to HTTP caching and traffic routing.
In April 2013, to further build its carrier customer credibility and sales organization, the company hired Richard “Mick” Scully to head up the Carrier Products Division. Scully came from Cisco, where he had been an executive in the security and access routing technology business units as well as in VCE, a joint venture among Cisco, EMC, VMware, and Intel.
Paris Burstyn is a senior analyst for wholesale at Ovum. For more information, visit www.ovum.com/