Akamai's Leighton on CDN Competition
Sramana Mitra on Strategy has an interview with Tom Leighton, the co-founder and Chief Scientist at Akamai Technologies (AKAM) in which Leighton discusses how Akamai is positioned to benefit from growth in the online video, as well as the recent competition from Level 3 and other new CDN providers.
As we noted recently, Akamai’s approach to competition has been to invoke the superiority of its network and edge-based approach to content delivery. Leighton goes into some on this point:
I think there have always been companies doing the core data center approach. It is easy to do. You buy servers, stick them in a data center, give it transit. You can start a company very easily with that model. There are probably two dozen companies, a dozen of which started in the last year, doing just that. It is quick, dirty and cheap. You then find out your quality is not good … If you are trying to deliver video from the data centers, say 20 data centers around the world, for a lot of the end users, you won’t even be able to deliver TV quality, let alone DVD or HD.
Leighton says one of Akamai’s key advantages is its relationships with hundreds of ISPs that house Akamai servers on their networks.
Not surprisingly Leighton is bullish about online video and its implications for Akamai. An excerpt:
Video increases our traffic which is good for our business. It increases the burden on the Internet which is bad for the internet. The good news and the bad news is that we are just at the tip of the iceberg on video. … As we think about growing our capacity over the next few years we were thinking on the order of a couple hundred terabytes per second to support a large audience for TV or better quality of video. The only way you can do that is to be serving that content locally. You are never going to get that capacity out of data centers.