What’s Next for Akamai’s Cloud Computing Strategy

In 2023, we rolled out 14 new core computing regions around the world, giving us a total of 25 overall. And we advanced our strategy by accomplishing what we set out to achieve last year in:

• Infrastructure deployment

• Product development

• Jump-starting our partner ecosystem

• Onboarding the first mission-critical apps from some major enterprise customers

• Achieving substantial cost savings as we moved our own applications from hyperscalers to Akamai Connected Cloud

We also enhanced our cloud computing platform in 2023 by doubling the capacity of our object storage solution and adding premium instances for large commercial workloads that are designed to deliver consistent performance with predictable resource and cost allocation.

Also, our Akamai Global Load Balancer is now live. This integrated service is designed to route traffic requests to the optimal data center to minimize latency and ensure no single point of failure.

We also amplified our go-to-market approach last year with our cloud computing partner program. The collaborative nature of the program provides a unique model for Akamai to engage with customers at a consultative level, to deeply understand their requirements and pain points, and to provide a complete solution leveraging the combined strength of each partner’s technology and Akamai’s distributed computing platform.

We have already partnered with several leading SaaS and PaaS providers, and cloud data and processing platforms. We are very pleased with the progress we have made thus far and are looking forward to adding more new partnerships in 2024.

We’ve also begun to gain traction with some of our largest customers as they migrate mission-critical apps onto our cloud platform, including one of the world’s best-known social media platforms and two of the world’s best-known software companies.

At the end of 2023, we also signed up a major global media measurement and analytics company, and we displaced a hyperscaler when we signed up BluTV, the largest VOD streaming company in Turkey. The streaming customer told us they found our platform to be simple to use, automated and intuitive, cloud agnostic for smooth multicloud migration, with very low egress cost, and at an affordable price — all backed by a trusted and reliable partner.

In addition to exceeding our full-year cloud computing revenue goal of $500 million in 2023, we derived significant cost savings by migrating several of our own applications from hyperscalers to Akamai Connected Cloud. Our Bot Manager and Enterprise Application Access solutions were among the first to migrate. Together, these products are used by more than 1,000 of our customers, and they generate more than $300 million in annual revenue for Akamai.

But all that is just the beginning. Now, in 2024, we are excited to announce the next phase of our multiyear strategy to transform the cloud marketplace: taking cloud computing to the edge — by embedding cloud computing capabilities into Akamai’s massively distributed edge network.

Akamai’s new initiative — code-named Gecko, which stands for Generalized Edge Compute — combines the computing power of our cloud platform with the proximity and efficiency of the edge to put workloads closer to users than any other cloud provider.

Traditional cloud providers support virtual machines and containers in a relatively small number of core data centers. Gecko is designed to extend this capability to our edge points of presence (PoPs), bringing full-stack computing power to hundreds of previously hard-to-reach locations.

Deploying our cloud computing capabilities into Akamai’s worldwide edge platform will also allow us to take advantage of existing operational tools, processes, and observability — enabling developers to innovate across the entire continuum of computing, and providing a consistent experience from centralized cloud to distributed edge. Nobody else in the marketplace does this today.

In the latest implementation phase that we are announcing today, Akamai aims to embed generalized cloud computing resources with support for virtual machines into about 100 cities by the end of the year. We have already deployed new Gecko-architected regions in four countries, as well as in cities that lack a concentrated hyperscaler presence. These initial locations are listed in our announcement press release.

Following that, we plan to add support for containers. And then, we plan to develop automated workload orchestration, to make it easier for developers to build applications across hundreds of distributed locations.

We have been conducting early trials of Gecko with several of our enterprise customers that are eager to deliver better experiences for their customers and run workloads closer to users, devices, and sources of data. Their early feedback has been very encouraging, as they use Gecko for tasks such as:

• AI inferencing

• Deep learning for recommendation engines

• Data analytics

• Multiplayer gaming

• Accelerating banking transactions

• Personalization for ecommerce

• A variety of media workflow applications such as transcoding

In short, we are incredibly excited for the prospects for Gecko as we move full-stack computing to the edge.

This post contains statements that are not statements of historical fact and constitute forward-looking statements for purposes of the safe harbor provisions under The Private Securities Litigation Reform Act of 1995, including, but not limited to, statements about expected future performance, expectations, plans, and prospects of Akamai.

Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors including, but not limited to failure of our investments in innovation to generate solutions that are accepted in the market; inability to increase our revenue at the same rate as in the past and keep our expenses from increasing at a greater rate than our revenues; effects of competition, including pricing pressure and changing business models; impact of macroeconomic trends, including economic uncertainty, turmoil in the financial services industry, the effects of inflation, rising and fluctuating interest rates, foreign currency exchange rate fluctuations, securities market volatility and monetary supply fluctuations; conditions and uncertainties in the geopolitical environment, including sanctions and disruptions resulting from the ongoing war in Ukraine and the Israel-Hamas War; supply chain and logistics costs, constraints, changes, or disruptions; defects or disruptions in our products or IT systems, including cyber-attacks, data breaches, or malware; failure to realize the expected benefits of any of our acquisitions or reorganizations; changes to economic, political, and regulatory conditions in the United States and internationally; our ability to attract and retain key personnel; delay in developing or failure to develop new service offerings or functionalities, and if developed, lack of market acceptance of such service offerings and functionalities or failure of such solutions to operate as expected, and other factors that are discussed in our Annual Report on Form 10-K, quarterly reports on Form 10-Q, and other documents filed with the SEC.

In addition, the statements in this post represent Akamai's expectations and beliefs as of the date of this post. Akamai anticipates that subsequent events and developments may cause these expectations and beliefs to change. However, while Akamai may elect to update these forward-looking statements at some point in the future, it specifically disclaims any obligation to do so. These forward-looking statements should not be relied upon as representing Akamai’s expectations or beliefs as of any date subsequent to the date of this post.