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Akamai Technologies (AKAM - Analyst Report) recently launched Mobile Authentication as a Service (“MAaaS”) solution for the federal agencies. The solution is supported by Daon’s identity authentication technology and will be provided in collaboration with the CGI Group (GIB - Snapshot Report).  

The CGI Group is one of the few cloud services providers to receive authorization under The Federal Risk and Authorization Management Program (“FedRAMP”), which looks after the security aspect of cloud products and services.

Akamai will deploy the MAaaS solution by using CGI’s Infrastructure-as-a-Service (IaaS) platform. The solution can be used to authenticate a number of devices that include smartphones, tablets and wirelessly connected laptops.

The MAaaS authentication process can be customized according to the need of the application and the risk policy of the business or enterprise. Unlike a single or 2-factor authentication layer from traditional mobile security solutions, MAaaS has a 7-factor authentication layer, which makes it a far more secured solution.

The growing adoption of “Bring Your Own Device (BYOD)” programs in both public and private sectors has become a significant challenge for IT administrators. Although IT departments generally have a well-laid down user policy, security and compliance issues continue to remain the primary headwinds.

This is due to the fact that IT departments have minimal control over the hardware and software used by employees. If employees do not adhere to IT policies (intentionally or negligently) personal devices used for official purposes can pose serious security threats to organizations.

In this respect, we believe that the usage of solutions such as MAaaS will increase rapidly going forward. Although the current solution targets federal agencies, we believe that Akamai will eventually launch the solution for the private sector to meet growing demand.

We believe that Akamai has significant growth prospects in the cyber security market going forward. Akamai’s cloud-based web security solutions have been well received by enterprises as reflected through the 273.0% sales growth in 2012.

However, intense competition from well established players such as Symantec (SYMC - Analyst Report) and EMC Corp (EMC - Analyst Report) will make it difficult for Akamai to gain market share in the near term.

Currently, Akamai has a Zacks Rank #3 (Hold).

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