Akamai, the largest CDN on the planet, never envisioned a bookstore encroaching on its turf. Then again, neither did HP, IBM, EMC, Oracle or Dell. Amazon dominates the markets for cloud computing and cloud storage. It’s trying to do the same with the CDN market. It has a long way to go, but it is moving up the ladder, one dollar at a time.
Cloudfront is known to have CDN clients paying a few dollars per month. Akamai is known to have customers paying thousands of dollars per month. The day is coming, when Amazon is going to figure out CDN, and come knocking on Akamai’s door. This threat, has to be on the minds of Akamai’s executive team. Why doesn’t Akamai fight back?
Akamai’s $5B Revenue Goal by 2020
Paul Sagan, the former CEO of Akamai, set a revenue target of $5B by 2020. Akamai is on track to do $1.4 to $1.5B in 2013. That means it must find another $3.5B in revenue in 6 years, thus grow more than 20% per year for the next 6 years. That’s very aggressive.
Akamai should fight back and get into the commoditized cloud compute and cloud storage game. It has 150,000 servers and a global infrastructure to do it. Once Akamai decommissions 25,000 servers at once, do to their old age, throw a software layer on top of those servers, and offer a cloud compute/storage solution to its existing customer base.
Akamai can make it easy for its customers, just add a line item on the CDN quote, for cloud compute and cloud storage, that matches AWS & S3 price. Akamai can offer clients two options: private cloud compute/storage that is not shared, for clients that hate shared environments, and other option that’s shared for price sensitive clients.
I think it’s worth a try, at least on a pilot basis. Akamai can throw $10M on this project, see how it goes, then decide on its future. I know it’s a crazy idea, but billion dollar product lines are usually started from crazy ideas.
