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Akamai Is the Latest Partner with Microsoft’s Azure Cloud Platform

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Nov. 20 2020, Updated 1:25 p.m. ET

Akamai’s CDN services will soon be accessible on Microsoft Azure

Previously in this series, we discussed Akamai’s fiscal 3Q15 results. Akamai Technologies (AKAM) holds a leadership position in content delivery network (or CDN) services. By partnering with Akamai, Microsoft (MSFT) intends to add CDN capabilities directly to its Azure cloud platform.

Until now, Microsoft Azure users had access to in-house content delivery network services. With this partnership, they will be able to tap into content delivery network services from Akamai.

Before this partnership, Akamai and Microsoft collaborated on the Windows 10 release and other online events, like the 2014 FIFA World Cup, the 2014 Sochi Winter Olympics, and the 2015 NFL Super Bowl.

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The above chart shows that Amazon’s AWS (Amazon Web Services) dominates the public cloud computing usage. Microsoft Azure is also a public cloud platform. Rackspace and Google are other leading players in this space. In a 2Q15 report, Synergy Research stated that Amazon (AMZN) Web Services, or AWS, Microsoft (MSFT), IBM (IBM), and Google (GOOG) collectively controlled approximately 54% of the global cloud infrastructure service market.

Akamai and Microsoft joined hands to compete with Amazon

According to Carl Brooks, an analyst with 451 Research, Microsoft and Akamai’s partnership is “one way to attempt to face down AWS’s CDN network, which is on a scale with Akamai’s, despite being much younger.”

Brooks further stated that Akamai falls short of the computing and developer services that its peers Amazon (AMZN) and Microsoft boast. On the other hand, Microsoft’s Azure doesn’t have the comparable scale to compete against Amazon’s AWS in the CDN space. So it makes sense for both Microsoft and Akamai to join hands, as this partnership should be symbiotic for the two companies.

You can consider investing in the SPDR S&P 500 ETF (SPY) to get diversified exposure to Akamai. SPY invests approximately ~0.08% of its holdings in Akamai.

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