Akamai's CDN business declines as data prices fall faster
Akamai's traditional content delivery network business is experiencing a slow decline due to decreasing data transmission prices outpacing increasing data volumes. This shift highlights a challenge in a core segment of the streaming industry. The article focuses on Akamai's business strategy in response to this trend in its CDN operations.
Key Takeaways
- Akamai's original business is content delivery networks.
- Data transmission prices have decreased faster than data volumes have increased.
- The decline is described as slow, but it directly hits Akamai's CDN operations.
- Akamai is emphasizing security and compute at the network's edge.
Why It Matters
Akamai's CDN engine is no longer growing fast enough to outrun falling transmission prices, which makes the legacy streaming delivery model less attractive right now. The article frames this as a strategic shift toward security and compute at the network edge, while noting that the original CDN business is still the company's foundation. For streaming teams, the signal to watch is whether data transmission prices continue to outpace data volume growth, since that spread is what is pressuring Akamai's core segment.
Read full article at morningstar.com