Akamai Case Analysis
Executive Summary
The content delivery network (CDN) industry is one that is experiencing tremendous growth. Not only is the industry itself growing, there is expectation that the video market segment will face tremendous growth. Combined with low barriers to entry, there is a new wave of competitors entering the market. Akamai has created a unique advantage by differentiating themselves by operating a decentralized network that allows the company to operate on the “edge” of the internet, providing their clients a superior product. IP’s have also been patented to protect them from imitation and direct competition. At the same time, the decentralized network is putting Akamai at a cost disadvantage due to the high costs associated with the maintenance and the continued innovation. The Decentralized-Video Market Strategy works best for Akamai as it allows them to remain competitive, and continue to capitalize on the decentralized system, while at the same time increasing …show more content…
Online video accounts for roughly 40% of the overall CDN market and in the next 5 years will be a major aspect of future growth in the industry. As Akamai tries to focus on video streaming, will their complex, expensive network support the platform needed to compete on price and size in regards to video? This question leads us into the next key issue for Akamai: should they switch from a decentralized network to a more cost effective centralized model while they have the resources to do so? A centralized network poses advantages such as less maintenance because of fewer servers but also can lead to a loss in reliability and speed for the consumers; a definite tradeoff. Further, another key issue is whether their future business strategy should focus on high end (complex) services or advanced services such as full web delivery and application acceleration which would see less
The content delivery network (CDN) industry is one that is experiencing tremendous growth. Not only is the industry itself growing, there is expectation that the video market segment will face tremendous growth. Combined with low barriers to entry, there is a new wave of competitors entering the market. Akamai has created a unique advantage by differentiating themselves by operating a decentralized network that allows the company to operate on the “edge” of the internet, providing their clients a superior product. IP’s have also been patented to protect them from imitation and direct competition. At the same time, the decentralized network is putting Akamai at a cost disadvantage due to the high costs associated with the maintenance and the continued innovation. The Decentralized-Video Market Strategy works best for Akamai as it allows them to remain competitive, and continue to capitalize on the decentralized system, while at the same time increasing …show more content…
Online video accounts for roughly 40% of the overall CDN market and in the next 5 years will be a major aspect of future growth in the industry. As Akamai tries to focus on video streaming, will their complex, expensive network support the platform needed to compete on price and size in regards to video? This question leads us into the next key issue for Akamai: should they switch from a decentralized network to a more cost effective centralized model while they have the resources to do so? A centralized network poses advantages such as less maintenance because of fewer servers but also can lead to a loss in reliability and speed for the consumers; a definite tradeoff. Further, another key issue is whether their future business strategy should focus on high end (complex) services or advanced services such as full web delivery and application acceleration which would see less