While Linode is very well known amongst a set of developers the cross-section of customers that overlap between Linode and Akamai is very tiny.
This acquisition was about selling a product to existing Akamai customers so branding it as an Akamai offering allows them to present this as an enterprise ready solution that their customers can trust immediately.
Akamai did $3.6B in trailing twelve month revenue, and even backing out $200MM (being generous here for Linode) that is $3.4B of revenue.
The bigger play for them is to mark up this as a high gross margin offering to their existing CDN customers where they need a bit of compute power to pair with their CDN offering.
Limelight Networks (throw back alert) was doing the same thing back in the day and they approached us (DigitalOcean) in 2012 looking to potentially partner with us so that we can use our software to build an internal white labelled cloud for them that they could resell to their customers.
This is seen as more of a brand extension through product acquisition under the Akamai umbrella rather than something like Microsoft buying Github where that is a service that is known globally by pretty much every developer and what they wanted was the brand and developer clout.
Here there was no real interest from Akamai in the brand, but simply in a robust enough product that they could resell into their existing customer base.
I have nothing much to add except that Akamai paid 900 million for linode, so 200m was a low guess. But linode was debt free and profitable unlike their competitors.
This acquisition was about selling a product to existing Akamai customers so branding it as an Akamai offering allows them to present this as an enterprise ready solution that their customers can trust immediately.
Akamai did $3.6B in trailing twelve month revenue, and even backing out $200MM (being generous here for Linode) that is $3.4B of revenue.
The bigger play for them is to mark up this as a high gross margin offering to their existing CDN customers where they need a bit of compute power to pair with their CDN offering.
Limelight Networks (throw back alert) was doing the same thing back in the day and they approached us (DigitalOcean) in 2012 looking to potentially partner with us so that we can use our software to build an internal white labelled cloud for them that they could resell to their customers.
This is seen as more of a brand extension through product acquisition under the Akamai umbrella rather than something like Microsoft buying Github where that is a service that is known globally by pretty much every developer and what they wanted was the brand and developer clout.
Here there was no real interest from Akamai in the brand, but simply in a robust enough product that they could resell into their existing customer base.