Akamai Standard Integration Essay
Structure:
The importance of an organizational structure in a firm’s success cannot be disputed. Having said that, it is important to keep in mind that the structure of the organization is well in sync with the organizational goals and objectives. With a firm like Akamai which has been branded as a leader in content delivery and cloud infrastructure, it is essential that the firm’s structure align to the goals of the organization thereby ensuring that they continue to be in the formidable position that they are in now.
Having said that, a study of the structure of Akamai reveals that at the lower level it primarily follows a horizontal information sharing structure to facilitate smooth coordination across the various teams involved. …show more content…
The divisions span various roles that involve expertise in functions like: investor relations, security, networks an architecture, development, and media and business development.
A level above this comprise the heads of the various departments who monitor the activities of the respective departments that they head. For instance the head of the ‘Product and Development’ monitors the teams that represent the various functions like Security, Network & Architecture & Development. Similarly the head of Operations oversees the departments like Media, Business Development, Web Experience and Sales.
These respective department heads in turn report to their superiors and the most senior members of the organization (in terms of designation). In Akamai the Board of Directors fill this space, comprising a board of twelve members excluding the CEO, these members of the board supervise the activities of their colleagues who fall below them in the organizational hierarchy.
The simplified organizational chart of Akamai is shown below. As is evident from the chart, it can be seen that a high degree of coordination across the horizontal levels spanning various departments is necessary to ensure overall operational success.
While the horizontal coordination is one element to the overall organizational structure, the vertical hierarchy ensures a fixed framework of reporting relationships thereby ensuring that each person at the lower level is accountable for the responsibility assigned to him or her.
A common point of confusion here that the word ‘decentralized’ has often been used in the context of Akamai. The use of this word has no bearing whatsoever on the organizational structure, it is a reference to the decentralized content delivery network that Akamai uses as opposed to the traditionalist’s centralized approach to content delivery.
The organizational chart below shows a simplified view of Akamai as an organization. It has been made to foster to easier understanding and to appreciate the benefits of this form of a structure for a firm like Akamai which is a services firm.
Image
Figure 1: Simplified Organizational Chart of Akamai
So it can be seen that the structure of Akamai is a healthy mix of horizontal information sharing and vertical reporting structures that demarcate the functionalities and responsibilities of each of the departments and people involved.
Strategy:
To understand the strategy of the firm it is essential to understand where Akamai actually fits into this entire web of content delivery.
It goes without saying that the internet now has become an indispensable tool to each and every entity in this world. Having said that, it is imperative to also assess the impact that this demand has on service providers. The internet of today has become far more congested, than it was a decade ago. The users of the internet are also spread across various geographic locations spanning the world. To quote an example, the web server of a particular company might be located in Delhi, but the company’s customer might be located in some distant part of the world. In such a situation, it is highly necessary that the information requested by the customer reaches him without the slightest delay.
It is here that Akamai comes into the picture. Akamai’s technology provides a huge benefit of enabling companies to store relevant data closer to the customer with their decentralized content delivery model. This enables the company to take a decongested route at any point of time, thereby ensuring that there is no delay in the customer accessing the data.
The figure shown below depicts the role of Akamai in the field of content delivery.
Image
Figure 2: Illustration of Content Delivery and Akamai’s role in it
Now that we have a clear picture of what Akamai does in the field of content delivery, what is the strategy that Akamai follows in order to ensure seamless content delivery. This strategy follows a full circle with all the three players exhibiting an interdependent relationship.
The strategy of Akamai involves three important components
Technology
Network Partners
Content Providers
Technology:
As mentioned earlier, Akamai has a series of decentralized architecture of network servers thereby ensuring closeness to the customers. This decentralized approach is referred to commonly as ‘THE EDGE’. This marketing of the approach has given Akamai a unique status among CDNs.
Content Providers:
In other words, these content providers are the customers of Akamai. Seamless delivery of content due to their decentralized approach to content delivery attracts more of these providers. This enables the content providers to give their customers their best possible experience when they visit their sites.
Network Partners:
The network partners have a critical role to play in this entire delivery model. The decentralized approach to the CDNs was made possible by negotiating with the Internet Service Providers (ISPs). The benefit that ISPs obtain at the end of the whole process is substantial as well. ISPs on hosting Akamai’s servers are able to deliver content more quickly to their own customers, while avoiding transit costs, primarily because the content travels very less distances.
Inserting Picture...
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Inserting Picture...Inserting Picture...
Figure 3: Price vs Mode of Content Delivery
The above graph basically aims at providing an understanding that Decentralized CDNs are in a position to charge 15-20% more than centralized CDNs like Limelight and other common network firms. While Akamai was never the pioneer in the CDN, it most certainly has the ‘first mover’ advantage when it comes down to decentralization of the same.
‘Decentralized Content Delivery’ is most clearly the competitive advantage that Akamai has over its competitors, while looking at the operations of the other players in the market, one could also say this is a ‘core competency’ of Akamai.
While this strategic initiative and a strong competitive advantage of Akamai has helped it lead the market, it is worth analyzing the five forces of the industry as formulated by Porter. This would give a clearer picture on whether Akamai continuously needs to keep innovating or if it can afford some complacency at this moment of time.
Porter’s Competitive Forces & Strategies:
Threat of new entrants:
As of now Akamai has a comfortable market position in the CDN market. It is worth mentioning that the threat that it faces due to a possibility of new entrants entering the market is moderate to high. CDN is an integral part of the internet value chain, and the decentralized distribution of Akamai has given it ‘the edge’. Besides, limitations on the capital make the possibility of new entrants relatively difficult.
Power of Suppliers:
Currently the bargaining power of the suppliers in the CDN industry is relatively low. This is because there are many companies that manufacture servers, thereby giving Akamai the freedom to switch suppliers in the event they are not satisfied with either the prices or the services offered.
Power of Buyers:
The bargaining power of the buyers is low to moderate in the CDN industry. As mentioned earlier, the decentralized content delivery network of Akamai has clearly differentiated it from the rest of the players in the market. Having said this, it is worth mentioning that in today’s world where the internet has become more indispensable than ever, users demand a high quality of experience. So with the seamless delivery that Akamai provides, it can afford to hike the prices for content delivery as users would still be willing to pay the same for an enhanced experience.
Threat of Substitutes:
While the threat due to possibility of new entrants entering the market is low, it is no surprise that Akamai does face a moderate level of threat when it comes to being substituted. This is a dynamic market, wherein any service provider on delivering content at a faster rate to the user would eventually eat up the market share. One of the biggest threats, however is that users might choose to have their own barebones’ CDNs rather than opting for Akamai’s service.
Rivalry among Competitors:
Akamai enjoys ‘an edge’ over the rest of the players in the market with superior content delivery network. However, it is to be noted that the other major players in the market are increasingly eating Akamai’s share of the market. The rivalry amongst them is intense forcing Akamai to be on the top of its game. The changing dynamics of the market due to the entry of the cloud has also given its competitors a new opportunity that if exploited early could result in substantial gains for them.
SWOT Analysis of Akamai & Recommendations
Being a pioneer in the decentralized content delivery, Akamai has a number of things going that have a positive impact on the same. However with great power comes great responsibility, so sometimes when this responsibility isn’t handled optimally, the organization can either fall into a stage of complacency or face external unforeseen threats. Let us examine the same for Akamai.
Strengths
A strong customer base with major clients
Comprehensive Solution Portfolio
Differentiating ‘EDGE’ factor
Weakness
Dependency on the big players for major revenues
Litigation Claims made by firms like Limelight Inc.
Strict adherence to prices for services offered
Opportunities
Growing enterprise application markets
Strategic Initiatives
Acquisitions
Mobile Content Delivery
Streaming of major events across the world
Threats
Competitive Pressure
Changing Technology dynamics
Possibility of new entrants
Strengths:
Akamai currently is a service provider for all the big names in the industry like Facebook, Twitter and YouTube. The presence of these big names is a big boost to the overall industry perception of Akamai. The comprehensive solution portfolio of Akamai includes solutions related to digital media, software distribution and storage. This enables the firm to provide single point of contact for internet presence. The differentiating ‘EDGE’ factor which basically is the decentralized content delivery network keeps Akamai a notch above its counterparts who are yet to explore this.
Weakness:
While the big players are a source of industry perception and a major source of revenues for Akamai, the downside to this is that Akamai’s dependency on these players is significant. Which is to say that, the moment these clients find an alternate CDN provider with better features than Akamai, they would switch. It also doesn’t help that Akamai and Limelight have had quite a few conflicts involving litigation claims made by the latter. These often undermine the strong perception that the big players bring to Akamai. Akamai has never been a great negotiator when it comes down to prices. Providing the best service, there is in the market, Akamai has always been reluctant to cut prices, this has lost Akamai some of its potential customers.
Opportunities:
The growing enterprise application markets are a potential source of growth for the firm. These could be delivered across communication networks like SaaS, cloud computing and service solutions. The cloud computing market is expected to grow to 121 billion by the end of 2015 which if used well by Akamai could strengthen its current position. Capitalizing on the growing social media market could also substantially increase Akamai’s revenue and presence. Acquisitions have been a key part of Akamai’s strategy. Chief acquisitions like Prolexic, Verivue and FastSoft have been seen as potential sources for speeding up the already existing content delivery network systems with increased security and greater server optimization.
Threats:
As earlier mentioned that while Akamai was the pioneer for decentralized content delivery, it has never been the pioneer for CDN. Having said this, over the last few years Akamai’s market share has been eaten away by a number of firms like Limelight Inc., Level Three Communications and Verizon. The stiff prices quoted by Akamai and their excess focus only on the big players, has cost them a lot of customers who turned to alternative CDNs for their needs. On other thing that cannot be ignored is the fact that in today’s world with constantly changing technology dynamics, Akamai would be left behind in the race if it failed to innovate and provide users with up to date solutions and services. Last but not the least, the ever looming threat of a new player in the market who could change the game hangs over Akamai, who so far have leveraged the ‘EDGE’ advantage to their benefit.
Recommendations for Strategy:
While the existing strategies of Akamai have most certainly proved successful, a few alternatives could be considered that might change the existing dynamics and help Akamai sustain its numero uno position in the CDN market. These strategies could be instrumental in bringing in more customers and thus increase the revenue.
Primarily, Akamai should look at expanding the already existing presence. Places like Asia and Africa are potential growing markets, which if capitalized by Akamai now would result in huge returns later. One other benefit of expanding would be the increase in the number of existing servers. This move could decrease the traffic per server resulting in faster content delivery.
A second strategic initiative that Akamai could take is to forge partnerships with its competitors rather than look at them as source of threats. Given the fact that, Akamai faces stiff competition from amongst the leading communication networks in the world like Verizon, forging a partnership with them could be a synergistic approach thereby ensuring both of them survive the market and provide end users the best possible services. Content routing would be more effective and so would be the experience of watching and accessing digital content on the internet.
A third strategic initiative would be to rethink the pricing strategy that Akamai currently follows. Akamai has always believed that it leads the market when it comes down to content delivery, and this provides the leverage to demand higher prices. By adopting an aggressive pricing strategy with no compromise on quality, Akamai could turn many of its competitors’ customers into its own. While this customer base could result in increased revenue, it could also result in an increased investment in providing services and servers. However from a long run perspective, it would strengthen Akamai’s market position and share, thereby enhancing industry perception.
A final strategic initiative that Akamai could take is to increase investment in research and development. The booming E-Commerce market demands complete website delivery as well as accelerated content delivery. Both of these have been achieved by the ‘EDGE’ advantage that Akamai possesses. As a follow-up to this, Akamai could also exploit the growing video conferencing markets. The continuous growth of the media market could only accelerate the growth of Akamai if it chooses to invest in it now, given the track record of superior content delivery, the returns on this investment could be huge. However this must be done at the earliest, as other major players are also targeting this as a potential source of revenue, especially bigger players like Microsoft and AT & T.
All these strategic initiatives have been recommended keeping in mind the fact the CDN market continues to grow at the rate that it is currently growing at. Also Akamai must continue its focus on B2B prospects rather than venturing into business by volume.
Workplace Technology and Design
So from our understanding of the structure, the strategies employed and the overall functioning of Akamai, we can conclude that Akamai is a service organization that aims at providing seamless content to its end users.
So Akamai is distinct from other product or manufacturing based organizations in the way that it accomplishes its primary purpose through the production and provision of services. So let us examine the services and characteristics of Akamai that make it a service based firm.
The services that Akamai offer are broadly classified into the following divisions:
Specialized Services
Integration Services
Management Services
Let us now examine each of these in greater detail to understand the interdependence of structure and technology.
Specialized Services:
The specialized services team of Akamai controls around 20% of the global internet traffic every day. This is possible only when the team is geographically dispersed across various parts of the world. Some of the functions that fall under the ambit of the specialized services unit include:
Result Optimization
Business Protection
Providing Business insight
Solution Customization
Closer examination of these services reveals an output that is intangible, here it is delivery of the content seamlessly. Solution customization involves providing customized solutions depending on the needs, so it basically means that the service provider needs to be technically sound to provide the same. This customization also means that a high level of interaction with the customer is needed.
Integration Services:
This team deals with the rapid deployment of Akamai products using proven change control processes. Again here services are of two types:
Akamai Standard Integration
Akamai Managed Interaction
While the former deals with a fixed set of implementation rules that were framed by Akamai for faster deployment, the latter deals with the integration practices that were specific to a particular company.
In both the cases, highly skilled Akamai technicians assist the customers in ensuring that deployment of the services provides the end users and customers with the best possible experience. Risk minimization and speeding time to value are added benefits. So it goes without saying how critical the value of the human element is here in ensuring that the services deployed are put to optimum use by the end users.
Management Services:
Optimization and pro-active maintenance are the key tenets of this service. The services provided here are handled by Akamai consultants who aim at ensuring that the solutions they provide ensure users have a great experience when they deploy Akamai solutions to their technical glitches.
In addition to consulting and technical support, management services also includes the following services:
Dynamic Site Accelerator Services
Web Application Accelerator Services
Download Service Management
Services
The above functionalities are metrics by which a website is judged. Having said that, customers who deploy these services of Akamai are wary of the fact that, any lapse in the provision of these services would adversely impact them as a whole, as the user is not a recipient of a great experience on the site if these don’t function optimally. This calls for a need for ‘rapid response time’ to ensure seamless delivery in the event of any unexpected technical glitch.
On a whole, on examining each of the three services that Akamai provides, we can say that given the large customer base, the geographic span and the never ending possibility of glitches in the final delivery, Akamai’s relatively decentralized decision making process with horizontal coordination being the emphasis at the lower level is justified. This implies that the formalization is also relatively lower with greater focus being on an employee’s skill level being knowledge intensive and a strong human connect. All of these go hand in hand with reinforcing Akamai’s structure being in sync with the kind of industry that it represents, which is a service industry.
The importance of an organizational structure in a firm’s success cannot be disputed. Having said that, it is important to keep in mind that the structure of the organization is well in sync with the organizational goals and objectives. With a firm like Akamai which has been branded as a leader in content delivery and cloud infrastructure, it is essential that the firm’s structure align to the goals of the organization thereby ensuring that they continue to be in the formidable position that they are in now.
Having said that, a study of the structure of Akamai reveals that at the lower level it primarily follows a horizontal information sharing structure to facilitate smooth coordination across the various teams involved. …show more content…
The divisions span various roles that involve expertise in functions like: investor relations, security, networks an architecture, development, and media and business development.
A level above this comprise the heads of the various departments who monitor the activities of the respective departments that they head. For instance the head of the ‘Product and Development’ monitors the teams that represent the various functions like Security, Network & Architecture & Development. Similarly the head of Operations oversees the departments like Media, Business Development, Web Experience and Sales.
These respective department heads in turn report to their superiors and the most senior members of the organization (in terms of designation). In Akamai the Board of Directors fill this space, comprising a board of twelve members excluding the CEO, these members of the board supervise the activities of their colleagues who fall below them in the organizational hierarchy.
The simplified organizational chart of Akamai is shown below. As is evident from the chart, it can be seen that a high degree of coordination across the horizontal levels spanning various departments is necessary to ensure overall operational success.
While the horizontal coordination is one element to the overall organizational structure, the vertical hierarchy ensures a fixed framework of reporting relationships thereby ensuring that each person at the lower level is accountable for the responsibility assigned to him or her.
A common point of confusion here that the word ‘decentralized’ has often been used in the context of Akamai. The use of this word has no bearing whatsoever on the organizational structure, it is a reference to the decentralized content delivery network that Akamai uses as opposed to the traditionalist’s centralized approach to content delivery.
The organizational chart below shows a simplified view of Akamai as an organization. It has been made to foster to easier understanding and to appreciate the benefits of this form of a structure for a firm like Akamai which is a services firm.
Image
Figure 1: Simplified Organizational Chart of Akamai
So it can be seen that the structure of Akamai is a healthy mix of horizontal information sharing and vertical reporting structures that demarcate the functionalities and responsibilities of each of the departments and people involved.
Strategy:
To understand the strategy of the firm it is essential to understand where Akamai actually fits into this entire web of content delivery.
It goes without saying that the internet now has become an indispensable tool to each and every entity in this world. Having said that, it is imperative to also assess the impact that this demand has on service providers. The internet of today has become far more congested, than it was a decade ago. The users of the internet are also spread across various geographic locations spanning the world. To quote an example, the web server of a particular company might be located in Delhi, but the company’s customer might be located in some distant part of the world. In such a situation, it is highly necessary that the information requested by the customer reaches him without the slightest delay.
It is here that Akamai comes into the picture. Akamai’s technology provides a huge benefit of enabling companies to store relevant data closer to the customer with their decentralized content delivery model. This enables the company to take a decongested route at any point of time, thereby ensuring that there is no delay in the customer accessing the data.
The figure shown below depicts the role of Akamai in the field of content delivery.
Image
Figure 2: Illustration of Content Delivery and Akamai’s role in it
Now that we have a clear picture of what Akamai does in the field of content delivery, what is the strategy that Akamai follows in order to ensure seamless content delivery. This strategy follows a full circle with all the three players exhibiting an interdependent relationship.
The strategy of Akamai involves three important components
Technology
Network Partners
Content Providers
Technology:
As mentioned earlier, Akamai has a series of decentralized architecture of network servers thereby ensuring closeness to the customers. This decentralized approach is referred to commonly as ‘THE EDGE’. This marketing of the approach has given Akamai a unique status among CDNs.
Content Providers:
In other words, these content providers are the customers of Akamai. Seamless delivery of content due to their decentralized approach to content delivery attracts more of these providers. This enables the content providers to give their customers their best possible experience when they visit their sites.
Network Partners:
The network partners have a critical role to play in this entire delivery model. The decentralized approach to the CDNs was made possible by negotiating with the Internet Service Providers (ISPs). The benefit that ISPs obtain at the end of the whole process is substantial as well. ISPs on hosting Akamai’s servers are able to deliver content more quickly to their own customers, while avoiding transit costs, primarily because the content travels very less distances.
Inserting Picture...
Inserting Picture...Inserting Picture...
Inserting Picture...Inserting Picture...
Inserting Picture...
Inserting Picture...
Inserting Picture...Inserting Picture...
Figure 3: Price vs Mode of Content Delivery
The above graph basically aims at providing an understanding that Decentralized CDNs are in a position to charge 15-20% more than centralized CDNs like Limelight and other common network firms. While Akamai was never the pioneer in the CDN, it most certainly has the ‘first mover’ advantage when it comes down to decentralization of the same.
‘Decentralized Content Delivery’ is most clearly the competitive advantage that Akamai has over its competitors, while looking at the operations of the other players in the market, one could also say this is a ‘core competency’ of Akamai.
While this strategic initiative and a strong competitive advantage of Akamai has helped it lead the market, it is worth analyzing the five forces of the industry as formulated by Porter. This would give a clearer picture on whether Akamai continuously needs to keep innovating or if it can afford some complacency at this moment of time.
Porter’s Competitive Forces & Strategies:
Threat of new entrants:
As of now Akamai has a comfortable market position in the CDN market. It is worth mentioning that the threat that it faces due to a possibility of new entrants entering the market is moderate to high. CDN is an integral part of the internet value chain, and the decentralized distribution of Akamai has given it ‘the edge’. Besides, limitations on the capital make the possibility of new entrants relatively difficult.
Power of Suppliers:
Currently the bargaining power of the suppliers in the CDN industry is relatively low. This is because there are many companies that manufacture servers, thereby giving Akamai the freedom to switch suppliers in the event they are not satisfied with either the prices or the services offered.
Power of Buyers:
The bargaining power of the buyers is low to moderate in the CDN industry. As mentioned earlier, the decentralized content delivery network of Akamai has clearly differentiated it from the rest of the players in the market. Having said this, it is worth mentioning that in today’s world where the internet has become more indispensable than ever, users demand a high quality of experience. So with the seamless delivery that Akamai provides, it can afford to hike the prices for content delivery as users would still be willing to pay the same for an enhanced experience.
Threat of Substitutes:
While the threat due to possibility of new entrants entering the market is low, it is no surprise that Akamai does face a moderate level of threat when it comes to being substituted. This is a dynamic market, wherein any service provider on delivering content at a faster rate to the user would eventually eat up the market share. One of the biggest threats, however is that users might choose to have their own barebones’ CDNs rather than opting for Akamai’s service.
Rivalry among Competitors:
Akamai enjoys ‘an edge’ over the rest of the players in the market with superior content delivery network. However, it is to be noted that the other major players in the market are increasingly eating Akamai’s share of the market. The rivalry amongst them is intense forcing Akamai to be on the top of its game. The changing dynamics of the market due to the entry of the cloud has also given its competitors a new opportunity that if exploited early could result in substantial gains for them.
SWOT Analysis of Akamai & Recommendations
Being a pioneer in the decentralized content delivery, Akamai has a number of things going that have a positive impact on the same. However with great power comes great responsibility, so sometimes when this responsibility isn’t handled optimally, the organization can either fall into a stage of complacency or face external unforeseen threats. Let us examine the same for Akamai.
Strengths
A strong customer base with major clients
Comprehensive Solution Portfolio
Differentiating ‘EDGE’ factor
Weakness
Dependency on the big players for major revenues
Litigation Claims made by firms like Limelight Inc.
Strict adherence to prices for services offered
Opportunities
Growing enterprise application markets
Strategic Initiatives
Acquisitions
Mobile Content Delivery
Streaming of major events across the world
Threats
Competitive Pressure
Changing Technology dynamics
Possibility of new entrants
Strengths:
Akamai currently is a service provider for all the big names in the industry like Facebook, Twitter and YouTube. The presence of these big names is a big boost to the overall industry perception of Akamai. The comprehensive solution portfolio of Akamai includes solutions related to digital media, software distribution and storage. This enables the firm to provide single point of contact for internet presence. The differentiating ‘EDGE’ factor which basically is the decentralized content delivery network keeps Akamai a notch above its counterparts who are yet to explore this.
Weakness:
While the big players are a source of industry perception and a major source of revenues for Akamai, the downside to this is that Akamai’s dependency on these players is significant. Which is to say that, the moment these clients find an alternate CDN provider with better features than Akamai, they would switch. It also doesn’t help that Akamai and Limelight have had quite a few conflicts involving litigation claims made by the latter. These often undermine the strong perception that the big players bring to Akamai. Akamai has never been a great negotiator when it comes down to prices. Providing the best service, there is in the market, Akamai has always been reluctant to cut prices, this has lost Akamai some of its potential customers.
Opportunities:
The growing enterprise application markets are a potential source of growth for the firm. These could be delivered across communication networks like SaaS, cloud computing and service solutions. The cloud computing market is expected to grow to 121 billion by the end of 2015 which if used well by Akamai could strengthen its current position. Capitalizing on the growing social media market could also substantially increase Akamai’s revenue and presence. Acquisitions have been a key part of Akamai’s strategy. Chief acquisitions like Prolexic, Verivue and FastSoft have been seen as potential sources for speeding up the already existing content delivery network systems with increased security and greater server optimization.
Threats:
As earlier mentioned that while Akamai was the pioneer for decentralized content delivery, it has never been the pioneer for CDN. Having said this, over the last few years Akamai’s market share has been eaten away by a number of firms like Limelight Inc., Level Three Communications and Verizon. The stiff prices quoted by Akamai and their excess focus only on the big players, has cost them a lot of customers who turned to alternative CDNs for their needs. On other thing that cannot be ignored is the fact that in today’s world with constantly changing technology dynamics, Akamai would be left behind in the race if it failed to innovate and provide users with up to date solutions and services. Last but not the least, the ever looming threat of a new player in the market who could change the game hangs over Akamai, who so far have leveraged the ‘EDGE’ advantage to their benefit.
Recommendations for Strategy:
While the existing strategies of Akamai have most certainly proved successful, a few alternatives could be considered that might change the existing dynamics and help Akamai sustain its numero uno position in the CDN market. These strategies could be instrumental in bringing in more customers and thus increase the revenue.
Primarily, Akamai should look at expanding the already existing presence. Places like Asia and Africa are potential growing markets, which if capitalized by Akamai now would result in huge returns later. One other benefit of expanding would be the increase in the number of existing servers. This move could decrease the traffic per server resulting in faster content delivery.
A second strategic initiative that Akamai could take is to forge partnerships with its competitors rather than look at them as source of threats. Given the fact that, Akamai faces stiff competition from amongst the leading communication networks in the world like Verizon, forging a partnership with them could be a synergistic approach thereby ensuring both of them survive the market and provide end users the best possible services. Content routing would be more effective and so would be the experience of watching and accessing digital content on the internet.
A third strategic initiative would be to rethink the pricing strategy that Akamai currently follows. Akamai has always believed that it leads the market when it comes down to content delivery, and this provides the leverage to demand higher prices. By adopting an aggressive pricing strategy with no compromise on quality, Akamai could turn many of its competitors’ customers into its own. While this customer base could result in increased revenue, it could also result in an increased investment in providing services and servers. However from a long run perspective, it would strengthen Akamai’s market position and share, thereby enhancing industry perception.
A final strategic initiative that Akamai could take is to increase investment in research and development. The booming E-Commerce market demands complete website delivery as well as accelerated content delivery. Both of these have been achieved by the ‘EDGE’ advantage that Akamai possesses. As a follow-up to this, Akamai could also exploit the growing video conferencing markets. The continuous growth of the media market could only accelerate the growth of Akamai if it chooses to invest in it now, given the track record of superior content delivery, the returns on this investment could be huge. However this must be done at the earliest, as other major players are also targeting this as a potential source of revenue, especially bigger players like Microsoft and AT & T.
All these strategic initiatives have been recommended keeping in mind the fact the CDN market continues to grow at the rate that it is currently growing at. Also Akamai must continue its focus on B2B prospects rather than venturing into business by volume.
Workplace Technology and Design
So from our understanding of the structure, the strategies employed and the overall functioning of Akamai, we can conclude that Akamai is a service organization that aims at providing seamless content to its end users.
So Akamai is distinct from other product or manufacturing based organizations in the way that it accomplishes its primary purpose through the production and provision of services. So let us examine the services and characteristics of Akamai that make it a service based firm.
The services that Akamai offer are broadly classified into the following divisions:
Specialized Services
Integration Services
Management Services
Let us now examine each of these in greater detail to understand the interdependence of structure and technology.
Specialized Services:
The specialized services team of Akamai controls around 20% of the global internet traffic every day. This is possible only when the team is geographically dispersed across various parts of the world. Some of the functions that fall under the ambit of the specialized services unit include:
Result Optimization
Business Protection
Providing Business insight
Solution Customization
Closer examination of these services reveals an output that is intangible, here it is delivery of the content seamlessly. Solution customization involves providing customized solutions depending on the needs, so it basically means that the service provider needs to be technically sound to provide the same. This customization also means that a high level of interaction with the customer is needed.
Integration Services:
This team deals with the rapid deployment of Akamai products using proven change control processes. Again here services are of two types:
Akamai Standard Integration
Akamai Managed Interaction
While the former deals with a fixed set of implementation rules that were framed by Akamai for faster deployment, the latter deals with the integration practices that were specific to a particular company.
In both the cases, highly skilled Akamai technicians assist the customers in ensuring that deployment of the services provides the end users and customers with the best possible experience. Risk minimization and speeding time to value are added benefits. So it goes without saying how critical the value of the human element is here in ensuring that the services deployed are put to optimum use by the end users.
Management Services:
Optimization and pro-active maintenance are the key tenets of this service. The services provided here are handled by Akamai consultants who aim at ensuring that the solutions they provide ensure users have a great experience when they deploy Akamai solutions to their technical glitches.
In addition to consulting and technical support, management services also includes the following services:
Dynamic Site Accelerator Services
Web Application Accelerator Services
Download Service Management
Services
The above functionalities are metrics by which a website is judged. Having said that, customers who deploy these services of Akamai are wary of the fact that, any lapse in the provision of these services would adversely impact them as a whole, as the user is not a recipient of a great experience on the site if these don’t function optimally. This calls for a need for ‘rapid response time’ to ensure seamless delivery in the event of any unexpected technical glitch.
On a whole, on examining each of the three services that Akamai provides, we can say that given the large customer base, the geographic span and the never ending possibility of glitches in the final delivery, Akamai’s relatively decentralized decision making process with horizontal coordination being the emphasis at the lower level is justified. This implies that the formalization is also relatively lower with greater focus being on an employee’s skill level being knowledge intensive and a strong human connect. All of these go hand in hand with reinforcing Akamai’s structure being in sync with the kind of industry that it represents, which is a service industry.