Limelight Opens a New Front Against Akamai

March 31st, 2009 by · 2 Comments

Limelight Networks (NASDAQ:LLNW, news, filings) has entered the small object delivery and website acceleration market with a new product called LimelightSITE. Dan Rayburn has a great summary of the new product and where it fits.  Basically this is a well defended bastion of Akamai (NASDAQ:AKAM, news, filings) - the cash machine on which its margins really hinge.  To challenge Akamai here implies that Limelight is feeling increasingly confident, and it seems as if Akamai can do little more than play defense.  That's the price of being king of the hill, there is nowhere new to climb but there are plenty of ways to go down.  On the other hand, it's not exactly a bad problem to have.

And yet, Akamai's unchallenged pricing has perhaps kept some potential customers on IP transit.  The cost of these services has maximized Akamai's revenues and margins, but it has also made the do-it-yourself alternative more viable for many.  Limelight's entry may shift that balance:  what may be a revenue drain for Akamai could theoretically also become a revenue drain for IP transit and colocation suppliers such as Cogent Communications (NASDAQ:CCOI, news, filings), Level 3 Communications (NYSE:LVLT, news, filings), and even Internap Network Services (NASDAQ:INAP, news, filings) because balance between cost and performance of these type of CDN services versus basic IP transit may change. It all depends on the customer reception of Limelight's product.

Regardless, such a phenomenon will probably take quite a while to appear, Limelight's product isn't even out in the market yet and it will be a while before we know if it is competitive enough to lure away customers in force.  And even when it does, the effect ought to be small next to the coming wave of video - even if it isn't an exaflood.

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Categories: Content Distribution

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2 Comments So Far


  • Karen says:

    Nobody beats Akamai in this business. Nobody!

  • keith says:

    limelight hasn’t a snowballs chance in hell to make a dent in this market. their infra is geared to large file delivery so they would need to spend a ton of money to switch gears and enter small file.

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