Impossible To Compare Limelight and Akamai's Enterprise and Commerce Products

Two weeks ago, Limelight Networks launched their new whole site delivery product, branded LimelightSITE, directly targeting the enterprise, finance, retail and government verticals. With this announcement, everyone is asking if this will have any affect on Akamai, who to date, has always dominated the enterprise and retail markets with their dynamic site solutions.

In my post about Limelight's new offering, I mentioned that I was going to follow it up with another article that would compare the services from the two companies on a technical level. Not a performance comparison, as that can only be done by customers, but rather an overview of how each service works and what the differences are. After spending a lot of time in the past week with both companies, I've come to the realization that's comparing the two services is nearly impossible for multiple reasons.

For starters, the solutions are very different and while there is some overlap, they appear to be targeting different customers with a different feature set. With commerce, Akamai is looking at more than just the transaction and personalization of the site and is also overlaying purchasing data from advertisers' websites to present the most relevant ad to shoppers, hence their Acerno acquisition. And unlike video, whole site delivery and accelerating apps comes with a host of complex tasks that is a lot harder to compare from one vendor to another. Retail sites are using a lot of RIA apps, dynamic HTML, javascript and components that can't be cached, not to mention the security requirements, specific page loads times demanded by customers and professional services work performed around commerce and enterprise solutions.

While delivering video has its own host of ecosystem pieces, it's a whole lot easier to compare one vendor to another for the delivery of video versus whole site delivery and application acceleration. The only true way to compare both of these service would be for a customer to take part of their site and create a sub domain so that both Akamai and Limelight could deliver similar content from the same site. But even that may be hard to do as Akamai and Limelight really do seem to be targeting different sized customers and more importantly, customers with different needs. When Limelight launched their product they said they were not expecting to compete with Akamai head on but rather with their customers own IT department. While some overlap between the two companies is expected, having spent time with both companies in the past week, their solutions really are quite different. After getting lots of product specific details from both companies, I've come to the realization that doing a fair, apples to apples technical comparison would be nearly impossible.

That said, I think both companies can grow their solutions in the market. Unlike video which was only a $400M market last year, the total content delivery market for all kinds of content is well over a billion dollars and growing rapidly. With Limelight already having over 160 customers for their new offering, it proves that there is room in the market for both Akamai and Limelight with different offerings.

When it comes to the subject of Akamai and their enterprise and commerce customers, I get a lot of questions. Many hear Akamai use terms like "value add services" or "retail solutions" but don't know exactly what that means, what the offering looks like and how it all works. No where on Akamai's website can you even find a product sheet on commerce because as I learned this week, to Akamai, commerce is a market, not a product line. Commerce falls under their dynamic site solutions product line. Since we all know that Akamai's margins on services outside of video delivery are quite healthy and are the products that make Akamai unique in the market, Wall Street always always has a lot of questions.

This is very similar to Akamai's application delivery product which is a term that everyone knows, but rarely do I find anyone who can explain what that means or how it works. That was my reasoning for publishing two articles on Akamai's app delivery offering last year that outline how it works and what it is used for. Taking that same approach, I am already working on doing the same for Akamai's commerce related business detailing how it all works, what the offering looks like and how it is used. I hope to have that follow up post ready sometime next week.

Related:

- A Detailed Look At Akamai's Application Delivery Product - Part 1

- Overview Of Akamai's Application Delivery Customers - Part 2

- Limelight To Challenge Akamai With E-Commerce, Whole Site Delivery Product

- Cisco Buying Colo Space In Third Party Data Centers, Says It's For New CDN Offering

Comments

[m. Pais]

Hey Dan,
One thing that always seems to pop up is, "here comes competition." Whether it be from Dimlight or Level Three, or anyone else for that matter - everyone, including you, always seem to jump on the, "here comes competition" B.S.? Why is that? Yes, I have been an investor in Akamai since they went from $27 all the way down to .58 cents. One thing is certain, competition has come and gone and AKAMAI is still king. There is not a single thing that level 3 or dimlight has that is as good as Akamai's offerings. Even you can't dispute that. As soon as Dimlight stops ripping off Akanai's technology, they too will be history. P.S. Happy Easter. Always, Manny

[Dan Rayburn]

Hi Manny,

Couple of things for me to address in your post. In reference to Akamai's competition, you can call it "BS" but that's your opinion, the facts prove otherwise.

- Akamai has said they see increased pricing pressure from the "competition"
- Limelight is now doing over $100M a year in CDN business
- Level 3 did $50M in CDN business in their first 18 months
- Akamai's M&E business dropped by 9% last quarter
- Customers that use to be exclusive to Akamai, (Apple, MLB, NFL) now use multiple providers

These are all examples that no one can argue with. To simply say that no competition exists for Akamai for CDN services would be factually wrong.

Now you could argue that to date, none of the other CDNs have displaced Akamai or had any major impact yet on their revenue. That is a fair point, one that is debatable and can be backed up by the fact that as much as Limelight has grown, their still not even doing, what I estimated to be 50% of Akamai's CDN only revenue.

So if you want to debate the impact the competition is or is not having sure, I would agree that is something to debate. But to say no competition exists, or that "competition has come and gone" would not be accurate.

Also, I'm not sure why so many Akamai investors are so caught up in the patent suit. Lets say Limelight has to pay Akamai $60M. Limelight has over $180M cash in the bank, so having to pay $60M does not put them out of business. Implying that they will "be history" is wrong as they won't go under simply by having to pay Akamai $60M. On the Akamai side, adding a $60M payment from Limelight does not change Akamai's revenue in any big way. A $60M payment is about 5-6% of Akamai's 2009 revenue. Not a big deal as far as additional revenue goes.

[Scott Hill]

Seems everyone forgets that Akamai was built for CDN technology while Vital Steam (now Internap) was built for streaming technology and at a better bang for buck.

Limelight failover and hub system had serious flaws when compared to Akamai and Vital Stream.