''Web 2.0 is almost a cliche''

The booming Internet economy has raised the fortunes of content delivery platform provider Akamai. In the last few years, Massachusetts, USA-based firm has been on a shopping spree acquiring smaller niche companies that can complement its offering portfolio

Akamai that means “smart” in Hawaiian, witnessed the most successful year in its history last year recording 50 per cent growth in its toplines. This has been aided by the industry’s insatiable need for speed and performance and also the increased traction of web-based applications and social networking.

Paul Sagan, president and CEO of the company had his initial moorings in the media industry both as a journalist as well managing new media businesses in the 1990s. This experience has helped bring in unique insights on Akamai and its approach to markets especially media companies and enterprises dependant on the Internet.

Sagan was in Bangalore recently and shared some of the company’s plans with Priya Padmanabhan of CyberMedia News.

You recently acquired companies that bring in application performance and P2P technology. What is the direction that Akamai is taking in terms of positioning in the market?

The overall mission of Akamai has not changed -- which is to make the Internet work better for enterprises. There are several product areas that we think have potential for our customers. These include content delivery for the media space, software distribution online, dynamic delivery for commerce sites and acceleration of applications online over IP networks. The goal is to innovate in areas that would be of value to our customers. We made three acquisitions in the last three months.

We looked at internal resources to check if we could build the products ourselves; or if we had to acquire. We also saw our road map across our products and increased investment internally. We now have 500 engineers globally and this is a very large increase in team size. Then we looked at gaps that could be filled in each area.

What capabilities do the recent buy-outs bring in for Akamai?

Nine systems, a California-based company has set of tools for monetization of online assets. We thought that it would be useful to our media customers to help them make money online.

Then in the first quarter this year, we acquired NetLi, a Silicon Valley company in the application performance space. This company has developed the Netli protocol that enables acceleration of dynamic routing online. With this we can provide a service that augments the hardware that people put into their networks.

What corporations are starting to understand is that to manage performance issues on the public Internet, no amount of hardware at the data center or fatter pipe from the ISP can solve the problem. Often the defining line between success and failure is the middle mile that only we are uniquely capable of providing. We have been building that business over the last 18 months and Netli’s technology can also help us with this.

The most recent acquisition we made is of a small San Francisco company called Red SwooshTake. The company has unique capability at the edge of the Internet on client side technology for tracking and delivery of content. We felt that this technology can accelerate our roadmap. Red Swoosh is more of a technology buy than a product buy.

In what new areas have you made investments in engineering specific to the social networking world?

Our engineers are working on building enhancements in the three product areas-content delivery, software distribution and dynamic delivery. Customers are looking better tools to support web 2.0 applications and social networking.

The Internet model has changed because a lot of users send a lot of content and a lot of technology is required to maintain that content. In the area of social networking, because of the amount of user-generated content, we realized that software managers were concerned about download speeds. So we did some engineering there.

Akamai has see the first phase of the Net and also the dotcom bust. How do you view the Web 2.0 phenomenon? Is it more hyped than it is?

Like all stereotypes, there is some truth and some useless fluff that goes with it. Web 2.0 has become almost a cliché. Before social networks, content was more predictable. Now, it is richer and complex. I would be careful of the hype that says that everything has changed now. It does not change everything but builds on what the Web was 10 years ago. Akamai was formed to be a distributed computing platform company for the Internet. As Web 2.0 grew, we just kept adding functionality to our open platforms. Seven out of ten social networking companies are on our platforms.

In user-generated social networks, a high upload rate is important. Hundreds of thousands of transactions take place per second. A lot of content is put up and not everything is valuable. It is the ultimate long tail. Technology innovation is needed to make sites easy and simple to use while also making it cost effective. We help our customers with this. One of the lessons of the bubble burst was that if there are no true economic underpinning for a business, you cant make money’.

Are you looking at new business segments besides the traditional media and Internet space?

Traditional companies are now putting their critical business processes online. They need better application performance and faster speed. They use applications to connect with suppliers which ties back to Service Oriented Architecture (SOA) and web based applications. More and more companies are using SOA and are building dynamic applications. We make their applications work as though they are in a LAN.

There is no industry that is not affected by the Internet today.

What do you think about the future of the print media vis-à-vis the Internet?

I think that if newspapers think their business is about printing information on paper, they are in trouble. If they think that it is about gathering, storing and dissemination of information, then they can do well. But the key is to distribute information where your users want it, when they want it and the format in which they want it. Clearly there is a generational shift and people expected the newspaper industry to be fast and adapt to the change. Big city dailies in the US are challenged now because their core audience has adopted new technology. One of the underpinning revenue models of newspapers comes from classifieds. If it (classified) is online they provide subsidy for content. Classifieds like ebay and Craigslist have ripped the economics out of newspapers. Tens of millions of dollars of classified ads moved from the San Francisco dailies and moved to the Internet making big city dailies unprofitable.

The television industry faces the same today with TIVO type devices. How that transitions to the Internet model is something to watch for. All media businesses will face turmoil. The same forces will be seen in India too in about five years.

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