Akamai’s Application Accelerator Solution a Hit

Akamai strikes deal with leading on-demand solutions providers

Akamai Technologies, Inc. (AKAM - Analyst Report) announced on June 26, offering of the Web Application Accelerator and IP Application Accelerator to IntraLinks, the leading provider of on-demand critical information exchange solutions. By tapping into Akamai’s solution, Intralink will be able to accelerate its business application with Akamai’s dynamic content. Additionally, its customers will be able to lower cost, increase productivity as well as speed up processes using its Web Application Accelerator and IP Application Accelerator platform.

According to the Chief Technology Officer of IntraLinks, using Akamai's global network routing and application acceleration services will help reduce the standard network latency over the Internet, helping customers run application within their data center. The company also anticipates that as the user base expands, users outside the U.S. will be able to access the platform at higher speeds – nearly twice the speed from previous generations.

Akamai’s Web Application Accelerator service optimizes the delivery of Web-based business applications, delivering local network performance to remote users. Akamai’s Web Application Accelerator solution includes a service level agreement assuring network availability, enhanced pre-fetching capabilities, strategic global deployments, as well as the addition of real-time application performance reporting.

Akamai’s IP (Internet Protocol) Application Accelerator service improves the delivery of any enterprise IP-based application, delivered over the Internet to boost the speed and quality of e-mail, voice over IP services, and file transfers within an organization. Both solutions are delivered through Akamai’s platform, which comprises 48,865 servers in hundreds of networks in approximately 70 countries.

Akamai's Web Application Accelerator solution has been selected by various on-demand solutions providers such as TradeBeam, the leading SaaS platform for Global Trade Management. The solution has helped TradeBeam report improved performance and accessibility of its Software as a Service (SaaS) offerings. It also helped the company to shun more than 20% in additional capital expenditures to build international data centers. In addition, Easy-Forex, a leader in online foreign exchange trading in more than 150 countries has seen application delivery performance improve by 50% using AKAM’s Web Application Accelerator solution. Since implementing Akamai solution, over 70% of requests for Easy-Forex's services are now accelerated by Akamai's Web Application Accelerator.

We believe these deals will be positives for the company and will allow customers to provide a better experience to their users by addressing the challenges of bandwidth constraints and Internet traffic, help reduce network latency over the Internet, while delivering content closer to the end-user. Akamai is facing growing competition and pricing pressure as new competitors enter the market. Owners of large networks, such as AT&T (T - Analyst Report), Google (GOOG - Analyst Report), Yahoo (YHOO - Analyst Report), and Limelight Networks, Inc. (LLNW - Snapshot Report) (LLNW) may decide to get more aggressive in the way they offer content and could enter the field of application accelerator solution.

We maintain our Hold rating on AKAM shares with a six-month price target of $21.00.