Uhh, No it wouldn’t. The only thing you have demonstrated here is your complete lack of knowledge on this topic. Wholesale bandwidth prices would have a negligible effect on either Limelight or Akamai, but would have a bigger effect on Akamai. Do you even know what peering is? Peering completely bypasses wholesale bandwidth. Limelight claims about 90% of their traffic goes over peering. That means 90% of their bandwidth usage has nothing to due with wholesale bandwidth. Even if that were not the case, bandwidth would still be a miniscule percentage of either of their costs.

I actually wrote PeeringDB, so it’s always interesting to see people using it for research and other similar purposes, but I don’t think you’re doing it correctly in this case. Public peering is only a small part of the picture of any serious networks’ interconnectivity. Due to the relatively high cost is typically reserved only for peering with a “large number of small networks” who individually wouldn’t be large enough to justify dedicated circuits. You really can’t draw any conclusions from the data you’re looking at other than “which network has more public peering”.

As far as Limelight vs Akamai, I think the bottom line can best be summarized as follows. Limelight is really good at delivering bulk bits for cheap in the biggest locations (North America, Western Europe, the most well connected parts of Asia, etc). Akamai is better at delivering bits to every possible destination, but costs significantly more to do so. Realistically there is a time and a place for both services, and a smart customer will know how to make the most effective use of their options for the money.

You bring up some interesting points. Perhaps I am “old school” in nature and believe that the proof point in any technology should be demonstrated in financial efficiencies for that company and ultimately fisal return to its shareholders.

I believe you are correct in your statement that Akamai continues to have a sustained market advantage over Limelight due to its scale, diversified high margin revenue product services.

You also point out that I did not factor in the decline in CDN customer pricing which is correct, however for a truly comparitive view the wholesale cost of bandwidth for CDN’s has also dropped dramtically from their 2003 level’s, which in some sense would give Limelight an advantage in this report when comparing todays bandwidth costs v’s the costs in 2003.

Limelight’s CDN is not more efficient than Akamai’s when it comes to cost as the CDN business is all about economics of scale, and today Akamai has a lower cost due to that scale. But the biggest point you are completely missing is that Akamai’s been able to diversify their revenue and network and gets half of their revenue from very high-margin products, something Limelight does not have today. Limelight is working hard to add more value add services, but today, that revenue does not even make up 10% of their overall revenue.

Nothing in this post takes into account the market price for CDN services from when Limelight started their CDN versus when Akamai got into the video delivery space. No one ever seems to remember that Akamai did not build their CDN for video/large object initially, they acquired InterVU in 2000 to get into this space. Nothing wrong with that, but you can’t compare the two.

If you’re going to compare the two companies, you can ONLY compare their video delivery services one to the other. You can’t compare the companies as a whole.

1. First graph re: revenue margins. There is zero consideration for
price compression here. What this graph shows is that at 2003 prices
Akamai got more profit than LL does at 2009 prices. Duh!

2. The second graph re: peering. Yes, Akamai has more PUBLIC peering.
You’ll notice the number at the bottom states Limelight’s public
peering as 633Gbps. In total, Limelight has 3,000 Gbps (3Tbps), so they have accounted for just over 1/6 of the network and use it to show a
comparison.

The report is flawed.