Akamai provides services for accelerating and improving the delivery of content
and applications over the Internet from live and on-demand streaming videos
to conventional content on web pages to tools that help people transact business.
Our solutions are designed to help businesses, government agencies and other
enterprises enhance their revenue streams and reduce costs by maximizing the
performance of their online businesses. By advancing the performance and reliability
of their websites, our customers can improve visitor experiences and increase
the effectiveness of their Web-based campaigns and operations. Through the Akamai
EdgePlatform, the technological platform for Akamai’s business solutions,
our customers are able to utilize Akamai’s infrastructure and reduce expenses
associated with internal infrastructure build-ups.
We were incorporated in Delaware in 1998 and have our corporate headquarters
at 8 Cambridge Center, Cambridge, Massachusetts. We have been offering content
delivery services and streaming media services since 1999. In subsequent years,
we have introduced technology that enables Web-based delivery of applications,
such as store/dealer locators and user registration, over our network; content
targeting technology; enhanced security features; and analytical tools that
provide our customers with information about visitors to their websites. During
2005, we began commercial sales of our Web Application Accelerator service,
which is designed to improve the performance of Web- and IP-based applications
through a combination of dynamic caching, compression of large packets, routing
and connection optimization.
We offer services and solutions for digital media distribution and storage,
content and application delivery, application performance services, on demand
managed services and website intelligence. We have developed three business
solutions to offer our customers a comprehensive suite of services and to meet
their specific Internet-related goals: Digital Asset Solutions, Dynamic Site
Solutions and Application Performance Solutions. In addition, our customers
can also purchase on-demand managed services, site intelligence offerings and
custom solutions designed for individual customer needs.
Digital Asset Solutions
Akamai’s Digital Asset Solutions leverage the core content delivery services
that we have offered since the company was formed. These services are designed
to enable enterprises to improve the end-user experience, boost reliability
and scalability and reduce the cost of Internet-related infrastructure. Within
the Digital Asset Solutions, customers can choose from the following:
Akamai Media Delivery Solution
We believe that the demand for Internet access to media of all types —
music, movies, games, streaming news, sports events, and social networking communities
— is growing rapidly; however, there are many challenges to profitably
offering media assets online, particularly with respect to user-generated content.
In particular, media companies need cost-effective means to deliver large files
to millions of users in different formats compatible with multiple end-user
devices and platforms. The Akamai Media Delivery Solution is designed to provide
a solution to many of the challenges of media delivery over the Internet by
helping media industry companies bypass traditional server and bandwidth limitations
to better handle peak traffic conditions and large file sizes. We support all
major streaming formats, and our EdgePlatform provides capacity levels that
individual enterprises may not be able to cost-effectively replicate on their
own.
Our Akamai Media Delivery Solution is primarily used by companies in the following
industries: entertainment, including television, radio, sports, music and media;
gaming and social networking; and Internet search/portal access. The solution
can accommodate the many different business models used by our customers including
pay-per-view, subscription, advertising and syndication.
Akamai Electronic Software Delivery Solution
Due to the expanding prevalence of broadband access, distribution of computer
software is increasingly occurring over the Internet. Internet traffic conditions
and high loads can dramatically impact software download speed and reliability.
Furthermore, surges in traffic from product launches or distribution of security
updates can overwhelm traditional centralized software delivery infrastructure,
impacting website performance and causing users to be unable to download software.
Our Electronic Software Delivery Solution is designed to leverage the Akamai
EdgePlatform to provide capacity for large surges in traffic related to software
launches and other distributions with a goal of improved customer experiences,
increased use of electronic delivery and successful product launches. This solution
is appropriate for software companies of all types including consumer, enterprise,
anti-virus and gaming.
Akamai EdgeSuite Delivery Solution
Through our EdgeSuite® delivery service, we can accelerate the delivery
of our customers’ websites over the Internet by making their content accessible
across our international network of servers. This distributed performance model
is intended to provide our customers with a more efficient way to implement
and maintain a global Internet presence. While site owners maintain a source
copy of their content and applications, EdgeSuite provides global delivery,
load balancing and storage of content and applications, enabling businesses
to focus valuable resources on strategic matters, rather than technical infrastructure
issues. This solution is appropriate for any enterprise that has a website.
Customers of our Digital Asset Solutions also have access to advanced service
features such as:
• Secure Content Distribution — distribution of secure Internet-related
content using Secure Sockets Layer transport, a protocol to secure transmission
of content over the Internet, to ensure that content is distributed privately
and reliably between two communicating applications.
• Site Failover — delivery of default content in the event that
the primary, or source, version of the website of a customer becomes unavailable.
• Disaster Recovery — a backup web presence if an unforeseen event
causes a website to crash.
• Net Storage — an efficient solution for digital storage needs
for all content types.
• Content Targeting — a feature that enables content providers to
deliver localized content, customized store-fronts, targeted advertising and
adaptive marketing.
Dynamic Site Solutions
Akamai’s Dynamic Site Solutions are designed for accelerating business-to-consumer
websites that integrate rich, collaborative content and applications into their
online architecture. In particular, our services inter-operate with dynamic
software applications such as AJAX (Asynchronous JavaScript and XML) and Macromedia
Flash®. Significant features of the Dynamic Site Solutions offering include:
• Cache Optimization — these features are designed to enhance the
cacheability of content including setting time-to-live values, header modification,
path modification and downstream caching.
• Compression — compression of content before it is sent to an end
user so as to reduce transfer times for users on slow connections, particularly
for transactional content.
• Capacity On-Demand — offers dynamic load-balancing decisions that
are based on real-time analysis of an end user’s location, Internet conditions
and server and data center infrastructure capacity and load.
Our Dynamic Site Solutions are primarily purchased by retail and travel companies
for their commerce-related websites as well as enterprises that rely on the
Internet for brand-building through research and discussion tools for their
current and potential customers.
Application Performance Solutions
Akamai’s Application Performance Solutions combine services and features
that are designed to improve the performance of highly dynamic content common
on corporate extranets and wide area networks. Traditionally, this market has
been addressed primarily by hardware and software products. We believe our managed
service approach offers a more cost-effective and comprehensive solution in
this area without requiring customers to make significant infrastructure investments.
In addition to reducing infrastructure costs, our Application Performance Solutions
are designed to allow our customers to offer more effective and reliable portal
applications and other Web-based systems for communicating with their customers,
employees and business partners.
Our Web Application Accelerator service is designed to improve the performance
of Web- and IP-based applications through a combination of dynamic caching,
compression, routing and connection optimization. This service is appropriate
for companies involved in technology, business services, travel and leisure,
manufacturing and other industries where there is a movement to Internet-based
communication with remote customers, suppliers and franchisees. Enterprise customers
are using the Web Application Accelerator services to run applications such
as online airline reservations systems, course planning tools, customer order
processing and human resources applications. By tying such applications to the
Akamai EdgePlatform, enterprise customers and their remote customers, suppliers
and franchisees can enjoy improved performance through connection and route
optimization techniques that avoid problem spots on the Internet and otherwise
accelerate delivery of applications without having to undertake significant
internal infrastructure build-out.
Customers
Our customer base is centered on enterprises. As of December 31, 2006, our customers
included many of the world’s leading corporations, including Apple Inc.,
Best Buy.com, Inc., Clear Channel, FedEx Corporation, L’Oreal, Microsoft
Corporation, MTV Networks, Nintendo, Qantas Airways Limited, Sony Ericsson Mobile
Communications, Victoria’s Secret and XM Satellite Radio. We also actively
sell to government agencies.
Competition
The market for our services is intensely competitive and characterized by rapidly
changing technology, evolving industry standards and frequent new product and
service installations. We expect competition for our services to increase both
from existing competitors and new market entrants. We compete primarily on the
basis of:
• performance of services;
• return on investment in terms of cost savings and new revenue opportunities
for our customers;
• reduced infrastructure complexity;
• scalability;
• ease of implementation and use of service;
• customer support; and
• price.
We compete primarily with companies offering products and services that address
Internet performance problems, including companies that provide Internet content
delivery and hosting services, streaming content delivery services and equipment-based
solutions to Internet performance problems, such as load balancers and server
switches. Some of our competitors also resell our services. Other companies
have recently emerged that offer online distribution of digital media assets
through advertising-based billing or revenue-sharing models that may represent
an alternative to our services. In addition, potential customers may decide
to purchase or develop their own hardware, software and other technology solutions
rather than rely on an external managed services provider like Akamai.
We believe that we compete favorably with other companies in our industry, as
well as alternative approaches to content and application delivery over the
Internet, on the basis of price, the quality of our offerings and our customer
service.