Akamai CEO: Linode acquisition makes company ‘world’s most distributed cloud services provider’
Akamai CEO Tom Leighton touted the company’s expansion this week on the heels of a Q4 earnings report that saw the company bring in a revenue of $905 million for the quarter and $3.5 billion for the full fiscal year.
Akamai announced on Tuesday that it is acquiring infrastructure-as-a-service (IaaS) platform provider Linode for about $900 million. Leighton said Linode is a very developer-friendly IaaS provider that makes it very easy to spin up a virtual machine or a container to build and run applications.
“By combining that with Akamai, we’re the world’s leaders in content delivery and web security. We make your applications really fast and we protect them from all sorts of attacks. We have the world’s most distributed edge computing platform for applications that need to be scaled up instantly on a global basis to respond to demand and various geographies in a serverless way,” Leighton told ZDNet in an interview.
“Putting them together is a very powerful combination because now developers and enterprises will be able to much more easily do the whole thing on Akamai. They can build the apps on Akamai, run them there, deliver them from Akamai and have them be secured as part of Akamai. Akamai becomes the world’s most distributed cloud services provider, all the way from the cloud to the edge, and we’ll make it really easy to build, run and secure your applications online.”
He went on to explain that Linode has great customer support and is already in 11 locations, which Akamai is going to “dramatically” expand. Linode does not have much of a sales force today, so Akamai will help them build that out, Leighton said.
Akamai will be integrating with more than 250 employees from Linode’s headquarters in Philadelphia, which will bring them to well over 9,000 employees globally.
Leighton also noted the September 2021 acquisition of Israel-based Guardicore, a cybersecurity company that offers a micro-segmentation solution to reduce the potential attack surface of corporate networks, secure applications, and meet compliance standards.
Leighton said the two acquisitions are the largest they have done in the last 20 years and noted that since closing the Guardicore deal, they have nearly doubled their initial projections of $30 million to $35 million in revenue for the company.
“The micro-segmentation that they do is really important for stopping the impact of ransomware. Ransomware is a huge problem today and the visibility it gives our customers into what’s going on in their internal networks is really important,” he explained.
“When you put it all together, Akamai is now positioned as the most distributed cloud services provider, with three market-leading capabilities and pillars to support growth. That’s a pretty exciting place to be.”
Akamai saw significant growth throughout 2021 in their security services, which contributed to revenue increases of 25% year over year and growth in their edge application services, which was up 30% year over year.
According to Leighton, the company is expecting the cloud compute category — which includes edge applications, its net storage business, and Linode — to reach “well over half a billion dollars in 2023.”
While the company has seen growth in overall revenue, its earnings per share may grow a bit less than usual due to the acquisitions. But Leighton predicted the EPS would bounce back next year.
“We generate a ton of cash so we’re in a position to make acquisitions that would benefit our customers and shareholders. I’m really excited about the future. We have a great history of innovation in the internet, beginning with the invention of content delivery and then bringing high quality streaming online, application acceleration, and of course, web security,” he said.
“We were pioneers in edge computing and now we’re taking a big step forward in cloud computing with Linode.”