Akamai Acquires Linode for $900 Million to Expand Cloud Services


US-based content delivery network and cybersecurity company Akamai Technologies has announced the acquisition of infrastructure-as-a-service provider Linode for approximately $900 million. This acquisition will allow Akamai to expand its cloud computing and infrastructure services and compete with major players like Amazon Web Services, Microsoft Azure, and Google Cloud.

Founded in 2003, Linode has established itself as a leading provider of cloud computing services like virtual private servers, object storage, and managed Kubernetes clusters. The company operates 11 data centers around the world and serves over 800,000 developers across 100 countries. Linode’s developer-friendly services and suite of cloud computing tools have made it popular among startups, SMBs, and open-source developers.

For Akamai, the addition of Linode’s cloud infrastructure solutions will complement its own computing capabilities and CDN offerings. Akamai is best known for its content delivery network which makes the internet faster by distributing content closer to end users. The company also provides cybersecurity services like DDoS protection and bot management.

With Linode under its umbrella, Akamai can diversify its product portfolio to support a wider range of workloads and offer businesses a one-stop shop for content delivery, security, storage, and computing infrastructure. This acquisition accelerates Akamai’s evolution into a comprehensive cloud services provider.

Linode’s infrastructure global footprint across Asia, Australia, Europe, and North America will augment Akamai’s existing networks and edge locations. For Linode customers, the deal provides access to Akamai’s security expertise and solutions to better safeguard their workloads and applications.

Akamai CEO Dr. Tom Leighton said, “Akamai has been ramping up its efforts in cloud computing…and acquiring Linode accelerates that initiative by adding a highly complementary, successful and growing cloud services business to Akamai.” Linode founder and CEO Christopher Aker was equally upbeat about becoming a part of Akamai.

The transaction is expected to close by the end of Q1 2023. Linode will become a new business unit within Akamai, led by Aker. It will continue to operate independently under its own brand, which is a win-win for both companies.

Akamai gains deeper access into the developer community that values Linode for its simple, affordable, and secure cloud computing solutions. At the same time, Linode can retain its unique identity and culture. Akamai also secures Linode’s expertise in Kubernetes container management, block storage, and cloud-native software development.

Forrester analyst Dave Bartoletti commented, “This deal combines Akamai’s network scale and security depth with Linode’s developer experience across multiple clouds. For Akamai, this is a big jump into the high-growth $100 billion market for cloud infrastructure.”

The acquisition signals Akamai’s clear intent to gain a stronger foothold in the IaaS market currently dominated by AWS, Microsoft Azure, and Google Cloud. Linode’s smaller-scale services can help Akamai attract more SMB customers looking for user-friendly cloud infrastructure at competitive prices.

Akamai also gains deeper access to open source communities and developers through Linode. With developer ecosystems being crucial for cloud platforms, Linode’s open source appeal and commitment can help Akamai build stickier customer relationships.

But Akamai has some clear challenges ahead as it absorbs Linode’s offerings and operations into its framework. Integrating two distinct product portfolios and corporate cultures can take time. Akamai will need to ensure it retains Linode’s team of experts responsible for its success so far.

Analysts also point out that Akamai faces steep competition from pure-play IaaS providers who are far ahead in terms of scale, capacity, and enterprise adoption. But by keeping Linode independent, Akamai can continue to nurture its scrappy startup culture of innovation.

Overall, the union of Akamai and Linode’s cloud infrastructure solutions makes sense. Akamai gains deeper access to developers while expanding its cloud services. Linode finds a home backed by Akamai’s R&D muscle to accelerate growth. Together, they can evolve into a formidable cloud platform for modern workloads.

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