Infotech Lead America: Akamai now leads the cloud video service market with nearly 30 percent of the market share in early 2013, from about 27 percent in 2012.
Akamai had $322 million in revenues during the first half of 2013 of a market expected to be worth $2.36 billion by the end of the year. Other companies competing in the market have less than approximately 5 percent market share.
Highwinds closed $205 million in private equity funding on August 8th, citing growth as well as M&A opportunities, while rival EdgeCast closed $54 million. “It’s clear that big investors see space in the market for a second standalone CDN to become a clear number two in the market.”
Limelight Networks, Akamai’s historical rival, has lost its way, Rosen said. The company’s revenues have turned from relatively flat to arching downward in a growing market. The market for CDN is showing in excess of 15 percent annual growth.
Limelight has started messaging about digital presence that speaks more to small and medium business rather than large enterprise buyers – although, part of the strategy includes OVP type functions which may be valuable for media publishers.
The CDN and related market is composed of various business models, including content delivery networks (CDNs), online video platforms (OVPs), managed video platforms (MVPs), and video content management systems (VCMS or CMS).
The market is poised for a round of consolidation, according to Sam Rosen, practice director at ABI Research.
There will be a horizontal consolidation where rival CDNs combine to gain scale in their competition with Akamai – as well as horizontal consolidation – where CDNs bring in functions, especially from OVPs, to compete for the largest content producers, according to Rosen.