Can Akamai (AKAM) Benefit From Decentralized Cloud Networks?
Akamai Technologies, Inc. AKAM recently launched seven new core compute regions worldwide as part of its concerted effort to realize the vision of a modern decentralized cloud network operator. With this, the company has opened 13 new core compute regions across the globe in the past 90 days, connecting them to its wide edge network that has a distributed footprint spanning 131 countries.
The newly added locations are Amsterdam, the Netherlands; Jakarta, Indonesia; Los Angeles, CA; Miami, FL; Milan, Italy; Osaka, Japan; and Sao Paulo, Brazil. The distributed and decentralized cloud architecture enables Akamai to achieve a low-latency globally scalable design and expand its cloud computing network to key data-intensive connection points that enable customers to bring improved connectivity and experience to end users.
The choice of locations for opening the fresh core compute regions speaks volumes of a well-orchestrated game plan to strengthen its footprint in places of strategic importance. While Amsterdam is home to the second-largest Internet exchange in the world, Los Angeles is deemed a leader in the global media and entertainment market. Sao Paulo and Miami are considered to be prime locations for facilitating improved connectivity in Latin America. Jakarta and Osaka are likely to offer Akamai a rapidly growing digital economy in Indonesia and Japan, respectively.
Akamai handles approximately 2 trillion web interactions on a daily basis. Its solutions help customers address the challenges of bandwidth constraints and Internet traffic while reducing the need for additional hardware to manage traffic loads. The company’s cloud optimization solutions help organizations to improve performance, increase availability and enhance the security of applications and key web assets delivered from data centers to the end user.
The buyout of Linode, a leading Infrastructure-as-a-service platform provider, has leapfrogged it as one of the world’s most distributed compute platforms from cloud to edge. We believe that strong growth in demand for online media and entertainment (High-Definition video) over the Internet and gaming will drive bandwidth requirements, thereby accelerating demand for Akamai Connected Cloud in the long haul.
The stock has gained 30% in the past year compared with the industry’s growth of 29.4%.
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Akamai presently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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It holds a leadership position in 100-gigabit Ethernet switching share in port for the high-speed datacenter segment. Arista is increasingly gaining market traction in 200- and 400-gig high-performance switching products and remains well-positioned for healthy growth in data-driven cloud networking business with proactive platforms and predictive operations.
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