Business Strategy and Outlook| Matthew Dolgin |
Facing stagnation in its core content delivery network business as its biggest media customers, such as Netflix, retreated in favor of bringing their CDNs in-house, Akamai has done an excellent job of pivoting to areas with growing demand, offering top-rate service, and making smart acquisitions. The key to Akamai's recent success has been the cybersecurity solutions it now offers. As the rest of its business struggles to produce revenue growth, security solutions have been growing about 25% annually and exceeded $1.3 billion in sales in 2021—nearly 40% of total sales. We think management is focusing on the right things and developing great products, but we think the decline in the legacy CDN business will remain a drag.