How We Transformed Akamai from a CDN to a Cloud and Security Company

A little more than a decade ago, we expanded our business into security with the creation of web application firewall (WAF) as a cloud service. We did this to meet what we recognized as a growing customer need, in a way that was complementary to what Akamai was already doing for customers with delivery.

The opportunity was clear to us because we listened to our customers. We created what has proved to be a very successful cloud service for WAF. And, now, for the first time in Akamai history, security delivered the majority of Akamai’s revenue last quarter, operating at an annual run rate of about US$2 billion per year.

Of course, we’ve greatly expanded our security product set over the years. We now offer market-leading solutions for distributed denial-of-service (DDoS) protection, bot management, account and content protection, app and API security, and Zero Trust enterprise security led by our Akamai Guardicore Segmentation solution.

And we’re especially excited about the most recent additions to our security portfolio. Our new Akamai Guardicore Platform is the first of its kind to enable Zero Trust security through a fully integrated combination of microsegmentation, Zero Trust Network Access (ZTNA), multi-factor authentication (MFA), DNS firewall, and threat hunting.

Its single agent and unified control console, powered by generative artificial intelligence (generative AI or GenAI), are designed to strengthen and simplify enterprise security with broad visibility and granular controls.  The new GenAI interface enables our customers’ operations teams to ask questions in a human language to gain information about their enterprise networks.

The new Akamai Guardicore Platform reflects our evolution as a security vendor — we’re growing beyond point solutions to a broader and more comprehensive security offering. Customers tell us they want to consolidate security products and tools with vendors they can trust, and we think this will appeal to their needs.

Last quarter, we also acquired Noname Security to help accelerate our momentum in the fast-growing API security market. Now, with Noname, we believe that Akamai has one of the most comprehensive API security solutions in the industry.

Within two weeks of the close, Akamai offered Noname customers our new Edge Connector, an integration with Akamai App & API Protector.

About a decade after we entered the security market, we again expanded Akamai’s future opportunity by assembling a much broader offering in cloud computing.

Akamai has offered function as a service (FaaS) in our edge platform for many years. This kind of edge computing has been used by thousands of our customers and it is deeply integrated into our delivery and security services.

But our customers asked for more. They wanted us to offer full-stack cloud computing, so that they could run their virtual machines (VMs) and containers on the Akamai platform. And they wanted us to do it in a more efficient and less costly way than the hyperscalers.

They asked Akamai for this because we were already delivering and securing their sites and apps on our platform. They liked our track record of reliability, and they knew they could trust Akamai to be a good partner. Many of them also like the fact that we don’t compete against them, unlike the hyperscalers.

Adding cloud computing to our portfolio also made good sense for Akamai. In addition to satisfying customer demand, we reap the advantages from offering customers delivery, security, and compute on the same platform. The synergies include:

• Improved performance, seamless integration and other operational efficiencies
• The ability to bundle for cross-selling and strong customer retention
• Deepened relationships with carrier networks
• The capacity to quickly detect and stop massive cyberattacks at the edge
• Unmatched visibility into enormous volumes of traffic, and the security insights and threat intelligence that we gain as a result

If you step back and look at how the marketplace has evolved, you can see how the hyperscalers have worked to achieve a similar suite of offerings, although they’ve taken a different route to get there. They started with cloud computing and infrastructure as a service (IaaS), and then moved into security and delivery, which validates our view that there is synergy in offering customers all three together.

The hyperscalers also have a more centralized architecture. Akamai has the world’s most distributed cloud platform, with more than 4,100 points of presence in more than 700 cities across 130 countries. We believe that being more distributed provides customers with better performance, better economics, and greater reliability.

The initial response from customers to our new cloud offering has been very encouraging.  Our cloud computing portfolio achieved strong early momentum in the first half of the year, and we expect the strong growth to continue.

Customers are also leveraging our independent software vendor partners (who we call Qualified Compute Partners) to run low-latency workloads on our compute platform. These workloads include solutions for observability into workload behavior, cybersecurity, and large-scale events, where the need to store very large sets of data makes Akamai a more attractive and cost-effective option than competitors.

Our media customers can now take advantage of a full suite of media workflow offerings on Akamai Connected Cloud, which provides valuable synergy with our delivery platform, for more efficient image manipulation, decisioning, and video transcoding.

And with Akamai’s latest Qualified Compute Partner and customer, Yospace, media companies around the globe can leverage their advanced adtech and ad strategies at scale across Akamai Connected Cloud.

Customers are also building new apps on our platform where low-latency data distribution and processing provides a better user experience for their customers at significantly reduced cost. One customer is training and testing the machine learning engines that power their security scanning product.

Another is building an AI-powered chatbot application to improve their customer experience and streamline operations with intelligent conversational customer engagement. Such AI-powered applications are increasingly popular with recent advances in large language models.

Akamai is also a very large user of our new cloud solution. As a result of migrating most of our own apps from the hyperscalers to Akamai Connected Cloud, we’re seeing better performance and greatly reduced cost.

We expect to reduce our spending on third-party clouds to less than one-third of what it would have been this year had we stayed on the hyperscalers, saving us well over US$100 million in annual operating expenses. It sure feels good not writing a 9-figure check to your competitors every year. And this is a feeling that we look forward to providing to our large enterprise customers.

Looking back, it’s clear that Akamai has undergone a fundamental transformation. We’ve transformed from a content delivery pioneer into the cloud company that powers and protects life online.

Security and cloud computing now generate two-thirds of Akamai revenue, whereas delivery provided two-thirds of our revenue as recently as five years ago.