Akamai’s edge servers completely revolutionize the way internet content is delivered to the end user. However, “because of the diverse programming methods used by websites, transferring the data to Akamai’s edge servers will add complexity to both set-up and maintenance.” (Xanedu Courspack, PG 88). Two of the strategic questions that Akamai faces are as follows. First, should it keep the status quo of working with all web server platforms, or should it align with one partner? Second, going forward with the more involved EdgeSuite product, should Akamai increase its in-house sales force, rely totally on resellers, i.e. system integrators, hosting firms, and network carriers, or some combination of both? II. Critical Issues
1. With the Internet’s rapid growth and “network of networks” architecture, users sometimes experienced slow transaction processing at e-commerce sites and were unable to access Web sites that had been inundated with user “hits.” 2. The Internet was vulnerable to the loss of data packets as they were routed through the network of networks. 3. Performance problems were due to bottlenecks in four major areas: a. First-mile infrastructure having to cope with heavy traffic loads as a Web site’s audience grew. b. Backbone networks causing normal processing delays as traffic passed through an average of 17 to 20 routers en route to its destination. c. Peering for global data delivery but no one’s network reached into every market. d. Last –mile infrastructure straining an IAP’s router or modem capacity to the point that users might not be able to connect to the Internet at all.
1. As most leading enterprise software companies are now offering platforms (which all have proprietary features) for creating and managing Web services, Akamai has to decide which side of the business “camps” they will want to be on: Java camp or .NET. 2. Akamai would need to undertake some customer software development work to support each platform. 3. Java development is slightly ahead of .NET, but Akamai has already stated that they will offer edge-computing solutions built for .NET platform in addition to the Java support they have already deployed. Neither camp would want to see Akamai committed solely to the other side. 4. Also, it is possible that large enterprise software companies would also just build their own ADNs. 5. Akamai also needs to build its sale force capabilities. The sales cycle for enterprise customers was elongated, demanding a consultative selling approach to multiple parties influencing the purchase decision. Its new customer is a corporate IT department, typically a cost center where the decision maker is sorting out “nice to have” from “need to have.” 6. Akamai has to decide whether to rely to a greater extent on resellers and other partners, which often had strong relationships within large corporations. 7. Though the price of servers has decreased dramatically, Akamai still has to find a way to pay for a $30 million capital expenditure to duplicate their 15,000-server network. Akamai also needs to build relationships with 1100 networks to get the servers collocated and write 6 million lines of code. Porters Five Forces Analysis
Threat of New Entrants
Even though the leading CDN alliance, Content Bridge was having trouble implementing its strategy, and many other smaller CDN’s had gone under, Akamai still has a huge target on its back by virtue of it being the only real player in the game. Despite this, Akamai has several barriers to new entry. One is there large independently owned network of edge servers. The heyday of the dotcom bubble had provided them with huge amounts of capital with which they built their infrastructure. The large amount of cash on hand also allowed them to stay afloat while they restructured their strategy. The intensity of...