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188 Pages

2010_akamai_ir_summit

Course: FINANCE 101, Spring 2011
School: University of Phoenix
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Word Count: 5119

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Coursehero >> Arizona >> University of Phoenix >> FINANCE 101

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a Powering Better Internet 2010 Akamai Safe Harbor Statement This presentation and webcast include information about Akamai's future expectations, plans and prospects that constitute forward-looking statements for purposes of the safe harbor provisions under The Private Securities Litigation Reform Act of 1995, including estimates about future revenues. Actual results may differ materially from those indicated by these forward-looking statements... as a result of various important factors including, but not limited to... failure to maintain the prices we currently charge for our services; inability to effectively compete with existing companies and new entrants in the markets in which we operate; unexpected network and service interruptions that cause loss of revenues, increased expenses or diversion of resources; failure to increase our revenue, retain our significant customers, or keep our expenses consistent with revenues; changes in relationships with our network providers that increase our operating expenses; failure of new services we offer to operate as expected or to gain widespread market acceptance; delay in developing or failure to develop new service offerings or functionalities, and if developed, lack of market acceptance of such service offerings and functionalities; and other factors that are discussed in our annual report, on Form 10-K, our quarterly reports on Form 10-Q, and other documents periodically filed with the SEC. In addition, any forward-looking statements, represent our estimates only as of December 9, 2010 and should not be relied upon as representing our estimates as of any subsequent date. While we may elect to update forward-looking statements at some point in the future, we specifically disclaim any obligation to do so, even if our estimates change. Finally, during this presentation we will be referring to non-GAAP financial measures such as Adjusted EBITDA. These non-GAAP measures are not prepared in accordance with generally accepted accounting principles. A reconciliation between non-GAAP and the most directly comparable GAAP financial measures appears in the News and Publications portion of the Investor Relations section of our website. Powering a Better Internet 2010 Akamai Paul Sagan CEO 5 Years Ago: Set a BHAG $1,400 $1,200 Revenue (US$ millions) $1,000 $800 $600 $400 $200 $0 2002 2003 2004 2005 2006 2007 2008 2009 2010 $1B+ Powering a Better Internet 2010 Akamai The Internet Continues to Grow AKAMAI PEAK TRAFFIC 2000 6 Gbps 2009 1.8 Tbps 2010 4.6 Tbps Powering a Better Internet 2010 Akamai The Internet Continues to Grow AKAMAI DEMAND One Year (2005) 2010 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Powering a Better Internet 2010 Akamai Cloud Security Mobile Video Analytics Powering a Better Internet 2010 Akamai Cloud Security Mobile Video Analytics RAPID MARKET GROWTH $25,000 $20,000 US$ millions 20% CAGR $15,000 Applications Hardware $10,000 $5,000 Software $0 Source: IDC, June 2010 2009 2010 2011 2012 2013 2014 Powering a Better Internet 2010 Akamai Cloud Security Mobile Video Analytics APPLICATIONS ACCELERATED BY AKAMAI 50 # of Applications Accelerated (thousands) 40 30 20 10 0 2005 2006 2007 2008 2009 2010 Powering a Better Internet 2010 Akamai Cloud Security Mobile Video Analytics eCOMMERCE IS EXPLODING 2010 2006 2002 1998 $517 Billion $280 Billion $100 Billion $10 Billion $200 Billion 1994 $0 Source: eMarketer Powering a Better Internet 2010 Akamai Cloud Security Mobile Video Analytics THREATS HAVE INCREASED 200 Gbps+ 17 Gbps 2005 2009 Powering a Better Internet 2010 Akamai Cloud Security Mobile Video Analytics MOBILE OVERTAKING DESKTOP 700 600 Global Users (Millions) 500 400 300 200 100 0 Source: Mary Meeker Morgan Stanley, Economy + Internet Trends, May 2010 2007E 2008E 2009E 2010E 2011E 2012E 2013E Desktop Internet Users Mobile Internet Users Powering a Better Internet 2010 Akamai Cloud Security Mobile Video Analytics VIDEO MONITIZATION INCREASING RAPIDLY US Online Revenue ($Billions) 14 12 10 8 6 4 2 0 2009 2010 2011 2012 2013 2014 Source: IDC, July 2010 43% CAGR Powering a Better Internet 2010 Akamai Cloud Security Mobile Video Analytics ONLINE EVENTS MORE AND MORE LIKE TV 15.9 Gbps 444 Gbps Tbps 1.1 Tbps 1.3 Tbps 1.5 2002 Steve Jobs Keynote 2008 Tiger Woods Playoff Match 2009 Obama Inauguration 2009 Michael Jackson Funeral 2010 World Cup Powering a Better Internet 2010 Akamai Cloud Security Mobile Video Analytics ONLINE EVENTS MORE AND MORE LIKE TV 1.6 Million Concurrent Viewers Tbps 1.5 = Powering a Better Internet 2010 Akamai 2010 World Cup Cloud Security Mobile Video Analytics USE CASES ARE MULTIPLYING Audience measurement Advertising Personalization Security and fraud detection CRM Supply chain Powering a Better Internet 2010 Akamai Cloud Security Mobile Video Analytics GROWTH OF REAL-TIME DATA ON AKAMAI NETWORK Akamai Edge Server Requests per day (Trillions) 1.0 0.9 0.8 0.7 0.6 0.5 0.4 0.3 0.2 0.1 0.0 Dec-04 Dec-05 Dec-06 Dec-07 Dec-08 Dec-09 Today Hits per day Powering a Better Internet 2010 Akamai 5 Years Ago: Set a BHAG $1,400 $1,200 Revenue (US$ millions) $1,000 $800 $600 $400 $200 $0 2002 2003 2004 2005 2006 2007 2008 2009 2010 $1B+ Powering a Better Internet 2010 Akamai Setting a new BHAG $7,000 $6,000 Revenue (US$ millions) $5,000 $4,000 $2B $1B New Opportunities: Media Cloud Mobile Security Data High Tech: SaaS adoption Enterprise: Cloud adoption Commerce: Online transactions, richer sites M&E: 100X volumes $1B $1B $3,000 $2,000 $1,000 $0 2002 - 2010 $2B Goal Powering a Better Internet 2010 Akamai Setting a new BHAG $7,000 $6,000 Revenue (US$ millions) $5,000 $4,000 $2B $1B $5B $1B $1B $3,000 $2,000 $1,000 $0 2002 - 2010 $2B Goal Powering a Better Internet 2010 Akamai Agenda TIME: 8:30AM 9:00AM 9:00AM 9:20AM 9:20AM 10:20AM 10:20AM 10:35AM SESSION: The Opportunity The Network Technology and Innovation Q&A PRESENTER: Paul Sagan, CEO David Kenny, President Tom Leighton, Chief Scientist Paul Sagan, David Kenny and Tom Leighton 10:35AM 10:45AM 10:45 11:15AM 11:15AM 11:45AM 11:45AM 12:15AM Break Aligning With The Opportunity Financial Review Q&A Bob Hughes, EVP GSSM JD Sherman, CFO Paul Sagan, Bob Hughes and JD Sherman 12:15PM 1:15PM Lunch Powering a Better Internet 2010 Akamai David Kenny President Extending Functionality in the Akamai Cloud Cloud Security Mobile Video Analytics Powering a Better Internet 2010 Akamai Extending Functionality in the Akamai Cloud Akamai Global Network Powering a Better Internet 2010 Akamai Managing a State-of-the-Art Web Presence Powering a Better Internet 2010 Akamai Managing a State-of-the-Art Web Presence Web servers Local load balancers Application servers SSL and authentication servers Video streaming infrastructure More load balancers Compression & connection management servers Forward caching servers IDS & IPS servers DNSSec & IPv6 support Redundant data centers & failover Powering a Better Internet 2010 Akamai The Web: Simple on the Outside... End-Users Internet Powering a Better Internet 2010 Akamai The Web: Simple on the Outside... End-Users Internet Powering a Better Internet 2010 Akamai ...but Problematic on the Inside 12,000 networks connected by peering points Tier 1 ISPs Tier 2 End-Users Tier 1 Tier 2 ISPs ISPs Tier 2 Tier 1 Powering a Better Internet 2010 Akamai ...but Problematic on the Inside Tier 1 (Cloud) Datacenters ISPs X Tier 2 End-Users Tier 1 Tier 2 ISPs ISPs Tier 2 X Tier 1 Powering a Better Internet 2010 Akamai Akamai's Solution (Cloud) Datacenters X Akamai Server End-Users X Powering a Better Internet 2010 Akamai Akamai's Solution (Cloud) Datacenters X Akamai Server End-Users X Powering a Better Internet 2010 Akamai Akamai's Solution (Cloud) Datacenters X End-Users X Powering a Better Internet 2010 Akamai Akamai's Solution (Cloud) Datacenters End-Users Powering a Better Internet 2010 Akamai Akamai's Solution Tier 1 (Cloud) Datacenters ISPs Tier 2 End-Users Tier 1 Tier 2 ISPs ISPs Tier 2 Tier 1 Powering a Better Internet 2010 Akamai The Akamai Cloud A global network: 75,000+ Servers 950+ Networks ISPs 70 Countries Tier 2 Delivering 130,000+ domains 1 Tier All top 20 global eCommerce sites (Cloud) Datacenters 9 of the top 10 financial institutions All top 30 M&E companies End-Users Accelerating Daily Traffic Tier 2 of: Tier 1 4+ Tbps ISPs Close to a trillion hits per day 800+ billion deliveries/day Tier 2 ISPs 30+ petabytes/day 10+ million concurrent streams Tier 1 15-30+% of the world's Web traffic Powering a Better Internet 2010 Akamai Expanding the Business Powering a Better Internet 2010 Akamai Expanding the Business Powering a Better Internet 2010 Akamai Akamai's Core Values: Performance Reliability Security Support Customer ROI Scale Powering a Better Internet 2010 Akamai Tom Leighton Chief Scientist Extending Functionality in the Akamai Cloud Cloud Security Mobile Video Analytics Powering a Better Internet 2010 Akamai Extending Functionality in the Akamai Cloud Cloud Security Mobile Video Analytics Powering a Better Internet 2010 Akamai Cloud Landscape Virtualization Software as a Service Optimization Edge Applications Application Platform as a Service Edge Computing Infrastructure as a Service Content Storage Powering a Better Internet 2010 Akamai Challenges with Cloud Adoption Cloud Datacenter End User Cloud servers reside in big data centers, farther away from the end user... Powering a Better Internet 2010 Akamai Challenges with Cloud Adoption Cloud Datacenter End User Cloud servers reside in big data centers, farther away from the end user... ...resulting in decreased performance and security Powering a Better Internet 2010 Akamai Akamai Cloud Optimization Cloud Datacenter The User Always Connects to a Nearby Akamai Server Akamai Edge Servers End User Powering a Better Internet 2010 Akamai Cloud Optimization: Route Selection Cloud Datacenter X Problem 1 End User X Route to datacenter may perform poorly Powering a Better Internet 2010 Akamai Cloud Optimization: Route Selection Akamai Edge Servers Cloud Datacenter X Problem 1 End User Solution Route to datacenter may perform poorly Powering a Better Internet Akamai SureRoute to optimize route 2010 Akamai Akamai SureRoute Makes a Big Difference Packet loss into India after Mideast cable cut 50% 40% Packet Loss 30% 20% 10% 0% Generic Internet Akamai Powering a Better Internet 2010 Akamai Cloud Optimization: Communication Protocol Cloud Datacenter End User Problem 2 Many round trips for initial large download Powering a Better Internet 2010 Akamai Cloud Optimization: Communication Protocol Akamai Edge Servers Cloud Datacenter End User Problem 2 Solution Many round trips for initial large download Powering a Better Internet Akamai Communication Protocol 2010 Akamai Akamai Communication Protocols Make a Big Difference Cloud Datacenter End User First Mile (.2 sec) Typical number of round trips for an application = 31 Total response time = 8.4 sec Middle Mile (8.0 sec) Last Mile (.2 sec) Powering a Better Internet 2010 Akamai Akamai Communication Protocols Make a Big Difference Akamai Edge Servers Cloud Datacenter End User First Mile (.2 sec) Typical number of round trips for an application = 31 5 Total response time = 8.4 sec 1.5 Middle Mile (8.0 sec) 1.0 sec sec Last Mile (.2 sec) Powering a Better Internet 2010 Akamai Customer Proof Point: Virtual Desktop Acceleration (Denver to New York City) 200 180 160 180 Seconds 140 120 100 80 60 40 20 0 Presentation Browsing File Transfer Viewing Pictures 82 69 34 46 30 With Akamai IPA Without Akamai Powering a Better Internet 2010 Akamai Cloud Optimization: Prefetching Cloud Datacenter End User Problem 3 Many round trips for personalized or cold objects Powering a Better Internet 2010 Akamai Cloud Optimization: Prefetching Cloud Datacenter End User Problem 3 Many round trips for personalized or cold objects Powering a Better Internet 2010 Akamai Cloud Optimization: Prefetching Cloud Datacenter End User Problem 3 Many round trips for personalized or cold objects Powering a Better Internet 2010 Akamai Cloud Optimization: Prefetching Akamai Edge Servers Cloud Datacenter End User Problem 3 Solution Many round trips for personalized or cold objects Powering a Better Internet Akamai Intelligent Prefetching 2010 Akamai Cloud Optimization: Prefetching Akamai Edge Servers Cloud Datacenter End User Problem 3 Solution Many round trips for personalized or cold objects Powering a Better Internet Akamai Intelligent Prefetching 2010 Akamai Global SaaS Application running on Amazon EC2 Infrastructure Putting Cloud Optimization to Work 60 50 59 Seconds 40 30 20 10 0 Australia Asia Europe North America 30 12 15 8 16 6 8 With Akamai WAA EC2 Powering a Better Internet 2010 Akamai Performance Matters! Transaction Time Akamai DSA vs CDN 4 Seconds 25 20 15 10 5 0 Percent of Users Abandonment Zone Each represents $370 Booking Seconds DSA CDN 2010 Akamai Powering a Better Internet Akamai Performance is Hard to Replicate Technology requires a truly distributed edge network to achieve optimal performance Network at scale requires 1000+ partnerships 1000's of man-years invested in efficiently managing a truly distributed network 1000's of man-years invested in improving performance to attain four 9s We're always improving Powering a Better Internet 2010 Akamai Extending Functionality in the Akamai Cloud Cloud Security Mobile Video Analytics Powering a Better Internet 2010 Akamai The State of Internet Security Powering a Better Internet 2010 Akamai The State of Internet Security Cybercrime costs global businesses ~$1 trillion/year.1 Cyber attack downtime for large eCommerce sites can exceed $100,000/min U.S. citizens lost $550+ million in 2009 Internet fraud.2 PCI Compliance costs Level 1 merchants $2M+/yr... ...and Level 2 merchants $1M+/yr.3 Even critical utilities are being targeted.1 1 McAfee 2 Internet Crime Complaint Center 3 Gartner 2010 Akamai Powering a Better Internet Web Application Without Akamai (Cloud) Datacenters End User Origin Traffic 10000 1000 100 10 1 Powering a Better Internet 2010 Akamai Web Application Without Akamai (Cloud) Datacenters Origin Traffic 10000 1000 100 10 1 X End User Powering a Better Internet 2010 Akamai Web Application Without Akamai (Cloud) Datacenters End User Origin Traffic 10000 1000 100 10 1 Powering a Better Internet 2010 Akamai Web Application Without Akamai X Origin Traffic 10000 1000 100 10 1 (Cloud) Datacenters End User Powering a Better Internet 2010 Akamai Holiday Season 2010 Coordinated DDoS Attacks Attacked eCommerce Web Sites Protected by Akamai Customer 1 PROTECTED US Customer #1 US Customer #2 US Customer #3 Times Above Normal Traffic 9,095x Peak Attack Time (GMT) 11/30 2PM 12/1 2PM 5,803x 3,115x 2,874x 1,807x 11/30 2PM 12/1 12/1 1PM 1PM Customer 2 US Customer #4 US Customer #5 Highly distributed international DDoS attacks from Asia-Pac, South America and Middle East Customer 3 Powering a Better Internet 2010 Akamai Web Application Using Akamai (Cloud) Datacenters End User Origin Traffic 10000 1000 100 10 1 Akamai Traffic 10000 1000 100 10 1 Powering a Better Internet 2010 Akamai Akamai Provides a Perimeter Defense (Cloud) Datacenters End User Origin Traffic 10000 1000 100 10 1 Akamai Traffic 10000 1000 100 10 1 Powering a Better Internet 2010 Akamai Akamai Provides a Perimeter Defense (Cloud) Datacenters End User Origin Traffic 10000 1000 100 10 1 Akamai Traffic 10000 1000 100 10 1 Powering a Better Internet 2010 Akamai Akamai Provides a Perimeter Defense (Cloud) Datacenters End User Origin Traffic 10000 1000 100 10 1 Akamai Traffic 10000 1000 100 10 1 Powering a Better Internet 2010 Akamai Credit Card Processing Today CC# CC# CC# Akamai Edge Servers Merchant Data Vault Cloud Datacenter CC# Powering a Better Internet 2010 Akamai Credit Card Processing Today CC# CC# CC# CC# Akamai Edge Servers Merchant Data Vault Cloud Datacenter CC# Powering a Better Internet 2010 Akamai Credit Card Processing Today CC# CC# CC# CC# Akamai Edge Servers Merchant Data Vault Cloud Datacenter Problem 1 Fast-growing PCI Audit Expense & Credit Card Risk Powering a Better Internet 2010 Akamai Credit Card Processing Today Akamai Edge Servers Merchant Data Vault Cloud Datacenter Problem 1 Fast-growing PCI Audit Expense & Credit Card Risk Powering a Better Internet 2010 Akamai Akamai Edge Tokenization (Now in Beta) Merchant Data Vault Cloud Datacenter Merchant Bank CC# Problem 1 Solution Fast-growing PCI Audit Expense & Credit Card Risk Powering a Better Internet Akamai Edge Tokenization of Credit Card Number 2010 Akamai Akamai Edge Tokenization (Now in Beta) CC# Merchant Data Vault Cloud Datacenter Merchant Bank Problem 1 Solution Fast-growing PCI Audit Expense & Credit Card Risk Powering a Better Internet Akamai Edge Tokenization of Credit Card Number 2010 Akamai Akamai Edge Tokenization (Now in Beta) CC# Merchant Data Vault Cloud Datacenter Merchant Bank Problem 1 Solution Fast-growing PCI Audit Expense & Credit Card Risk Powering a Better Internet Akamai Edge Tokenization of Credit Card Number 2010 Akamai Akamai Edge Tokenization (Now in Beta) CC# Merchant Data Vault Cloud Datacenter Merchant Bank Problem 1 Solution Fast-growing PCI Audit Expense & Credit Card Risk Powering a Better Internet Akamai Edge Tokenization of Credit Card Number 2010 Akamai Akamai Edge Tokenization (Now in Beta) CC# Merchant Data Vault Cloud Datacenter Merchant Bank Problem 1 Solution Fast-growing PCI Audit Expense & Credit Card Risk Powering a Better Internet Akamai Edge Tokenization of Credit Card Number 2010 Akamai Akamai Edge Tokenization (Now in Beta) CC# Merchant Data Vault Cloud Datacenter Merchant Bank Problem 1 Solution Fast-growing PCI Audit Expense & Credit Card Risk Powering a Better Internet Akamai Edge Tokenization of Credit Card Number 2010 Akamai Akamai Edge Tokenization (Now in Beta) CC# Merchant Bank $$$ Merchant Data Vault Cloud Datacenter Problem 1 Solution Fast-growing PCI Audit Expense & Credit Card Risk Powering a Better Internet Akamai Edge Tokenization of Credit Card Number 2010 Akamai Extending Functionality in the Akamai Cloud Cloud Security Mobile Video Analytics Powering a Better Internet 2010 Akamai Mobile Delivery without Akamai Origin Web Server Problem 1 Wireless User Wireless packet loss forces retransmits over long distance Powering a Better Internet 2010 Akamai Mobile Delivery without Akamai Origin Web Server Problem 1 Wireless User Wireless packet loss forces retransmits over long distance Powering a Better Internet 2010 Akamai Mobile Delivery without Akamai Origin Web Server Problem 1 Wireless User Wireless packet loss forces retransmits over long distance Powering a Better Internet 2010 Akamai Mobile Delivery without Akamai Origin Web Server X Wireless User Problem 1 Wireless packet loss forces retransmits over long distance Powering a Better Internet 2010 Akamai Mobile Delivery without Akamai Origin Web Server Problem 1 Wireless User Wireless packet loss forces retransmits over long distance Powering a Better Internet 2010 Akamai Mobile Delivery without Akamai Origin Web Server X Wireless User Problem 1 Wireless packet loss forces retransmits over long distance Powering a Better Internet 2010 Akamai Mobile Delivery without Akamai Origin Web Server Problem 1 Wireless User Wireless packet loss forces retransmits over long distance Powering a Better Internet 2010 Akamai Mobile Delivery without Akamai Origin Web Server Problem 1 Wireless User Wireless packet loss forces retransmits over long distance Powering a Better Internet 2010 Akamai Mobile Delivery with Akamai Origin Web Server Problem 1 Solution Wireless packet User Wireless loss forces retransmits over long distance Powering a Better Internet Akamai Dynamic Site Accelerator 2010 Akamai Mobile Delivery with Akamai Origin Web Server Problem 1 Solution Wireless User Wireless packet loss forces retransmits over long distance Powering a Better Internet Akamai Dynamic Site Accelerator 2010 Akamai Mobile Delivery with Akamai Origin Web Server Problem 1 Solution Wireless User Wireless packet loss forces retransmits over long distance Powering a Better Internet Akamai Dynamic Site Accelerator 2010 Akamai Mobile Delivery with Akamai Origin Web Server Problem 1 Solution Wireless User Wireless packet loss forces retransmits over long distance Powering a Better Internet Akamai Dynamic Site Accelerator 2010 Akamai Mobile Delivery with Akamai Origin Web Server X Wireless User Problem 1 Solution Wireless packet loss forces retransmits over long distance Powering a Better Internet Akamai Dynamic Site Accelerator 2010 Akamai Mobile Delivery with Akamai Origin Web Server Problem 1 Solution Wireless User Wireless packet loss forces retransmits over long distance Powering a Better Internet Akamai Dynamic Site Accelerator 2010 Akamai Mobile Delivery with Akamai Time 50 sec 20 sec Global email transaction including the download of a 1 MB attachment to the iPhone Mobile with Akamai Mobile without Akamai 2010 Akamai Powering a Better Internet Delivery to Mobile Devices Origin Web Server Wireless User Problem 1 Content needs modification based on device type Powering a Better Internet 2010 Akamai Delivery to Mobile Devices Origin Web Server Wireless User Problem 1 Content needs modification based on device type Powering a Better Internet 2010 Akamai Delivery to Mobile Devices Origin Web Server Wireless User Problem 1 Content needs modification based on device type Powering a Better Internet 2010 Akamai Delivery to Mobile Devices Origin Web Server Wireless User Problem 1 Content needs modification based on device type Powering a Better Internet 2010 Akamai Delivery to Mobile Devices Origin Web Server Wireless User Problem 1 Content needs modification based on device type Powering a Better Internet 2010 Akamai Delivery to Mobile Devices with Akamai Origin Web Server Wireless User Problem 1 Solution Content needs modification based on device type Powering a Better Internet Transcoding at the Edge with Akamai Mobile Optimization 2010 Akamai Delivery to Mobile Devices with Akamai Origin Web Server Wireless User Problem 1 Solution Content needs modification based on device type Powering a Better Internet Transcoding at the Edge with Akamai Mobile Optimization 2010 Akamai Delivery to Mobile Devices with Akamai Origin Web Server Wireless User Problem 1 Solution Content needs modification based on device type Powering a Better Internet Transcoding at the Edge with Akamai Mobile Optimization 2010 Akamai Delivery to Mobile Devices with Akamai Origin Web Server Wireless User Problem 1 Solution Content needs modification based on device type Powering a Better Internet Transcoding at the Edge with Akamai Mobile Optimization 2010 Akamai Delivery to Mobile Devices with Akamai Origin Web Server Wireless User Problem 1 Solution Content needs modification based on device type Powering a Better Internet Transcoding at the Edge with Akamai Mobile Optimization 2010 Akamai Delivery to Mobile Devices with Akamai Origin Web Server Wireless User Problem 1 Solution Content needs modification based on device type Powering a Better Internet Transcoding at the Edge with Akamai Mobile Optimization 2010 Akamai Extending Functionality in the Akamai Cloud Cloud Security Mobile Video Analytics Powering a Better Internet 2010 Akamai The Akamai HD Experience Powering a Better Internet 2010 Akamai The Akamai HD Experience HD Quality Multiple cameras Instant Replay Adaptive Bitrate Real Time Fast Switching Powering a Better Internet 2010 Akamai Akamai Delivers Superior Video Performance North America Video-on-Demand 100 99 Percent of Users 98 97 96 95 94 93 92 91 90 Akamai Competitor 1 Competitor 2 Perfect Rebuffering Powering a Better Internet Failure 2010 Akamai The Big Data Center Approach to Content Delivery Data Centers (10s) Peering Points Local ISPs (1,000s) Users Powering a Better Internet 2010 Akamai The Big Data Center Approach to Content Delivery Problem 1 Data centers are on the wrong side of the bottleneck Data Centers (10s) Peering Points Local ISPs (1,000s) Bottleneck Users Powering a Better Internet 2010 Akamai The Big Data Center Approach to Content Delivery Problem 1 Data centers are on the wrong side of the bottleneck Data Centers (10s) Peering Points Local ISPs (1,000s) Bottleneck Users Powering a Better Internet 2010 Akamai The Big Data Center Approach to Content Delivery Problem 1 Data centers are on the wrong side of the bottleneck Data Centers (10s) Peering Points Local ISPs (1,000s) Bottleneck Users Powering a Better Internet 2010 Akamai The Big Data Center Approach to Content Delivery Problem 1 Data centers are on the wrong side of the bottleneck Data Centers (10s) Peering Points Local ISPs (1,000s) Bottleneck Users Powering a Better Internet 2010 Akamai The Big Data Center Approach to Content Delivery Problem 1 Data centers are on the wrong side of the bottleneck Data Centers (10s) Peering Points Local ISPs (1,000s) Bottleneck Users Powering a Better Internet 2010 Akamai The Big Data Center Approach to Content Delivery Problem 1 Data centers are on the wrong side of the bottleneck Data Centers (10s) Peering Points Local ISPs (1,000s) Bottleneck Users Powering a Better Internet 2010 Akamai The Big Data Center Approach to Content Delivery Problem 1 Data centers are on the wrong side of the bottleneck Data Centers (10s) Peering Points Local ISPs (1,000s) Bottleneck Users Powering a Better Internet 2010 Akamai The Big Data Center Approach to Content Delivery Problem 1 Data centers are on the wrong side of the bottleneck Data Centers (10s) Peering Points Local ISPs (1,000s) Bottleneck Users Powering a Better Internet 2010 Akamai The Big Data Center Approach to Content Delivery Problem 1 Data centers are on the wrong side of the bottleneck Data Centers (10s) Peering Points Local ISPs (1,000s) Bottleneck Users Powering a Better Internet 2010 Akamai The Big Data Center Approach to Content Delivery Problem 2 Data centers are far away from end users Data Centers (10s) Local ISPs (1,000s) Users Powering a Better Internet 2010 Akamai The Big Data Center Approach to Content Delivery Problem 2 Data centers are far away from end users Data Centers (10s) Local ISPs (1,000s) Users Powering a Better Internet 2010 Akamai The Big Data Center Approach to Content Delivery Problem 2 Data centers are far away from end users Data Centers (10s) Local ISPs (1,000s) Users Powering a Better Internet 2010 Akamai The Big Data Center Approach to Content Delivery Problem 2 Data centers are far away from end users Data Centers (10s) Local ISPs (1,000s) Users Powering a Better Internet 2010 Akamai The Big Data Center Approach to Content Delivery Problem 2 Data centers are far away from end users Data Centers (10s) Local ISPs (1,000s) Users Powering a Better Internet 2010 Akamai Akamai's Unique Approach to Content Delivery Solution Akamai servers are close to end users Data Centers (10s) Local ISPs (1,000s) Akamai Servers Users Powering a Better Internet 2010 Akamai Akamai's Unique Approach to Content Delivery Solution Akamai servers are close to end users Data Centers (10s) Local ISPs (1,000s) Akamai Servers Users Powering a Better Internet 2010 Akamai Akamai's Unique Approach to Content Delivery Solution Akamai servers are close to end users Data Centers (10s) Local ISPs (1,000s) Akamai Servers Users Powering a Better Internet 2010 Akamai Performance Matters! Latency governs throughput, and thus the time to download large files (e.g., 4 GB DVDs) Distance from Server to User Akamai Network Latency 1.6 ms 16 ms 48 ms 96 ms Packet Loss 0.6% 0.7% 1.0% 1.4% Throughput 44 Mbps 4 Mbps 1 Mbps 0.4 Mbps Download Time 12.2 min. 2.2 hrs 8.16 hrs 20 hrs Local 1-100 mi. Regional 500-1000 mi. Big Data Center Approach Cross Continent <3,000 mi. Different Continent <6,000 mi. Source: Internal Akamai testing, empirical network analysis Powering a Better Internet 2010 Akamai The Cost of High Definition Cost $$$ Revenue Revenue Cost $ SD Powering a Better Internet HD 2010 Akamai The Cost of High Definition Cost $$$ Revenue Revenue Cost $ SD Powering a Better Internet HD 2010 Akamai Extending Functionality in the Akamai Cloud Cloud Security Mobile Video Analytics Powering a Better Internet 2010 Akamai Akamai Analytics Use Cases Are Increasing Security and fraud detection Audience measurement End-user performance Personalization & behavioral targeting Powering a Better Internet 2010 Akamai Contextual Advertising advertisement Powering a Better Internet 2010 Akamai Contextual Advertising advertisement Powering a Better Internet 2010 Akamai Akamai Behavioral Targeting advertisement Home Buyers Powering a Better Internet 2010 Akamai Akamai Behavioral Targeting advertisement Motorcycle Enthusiasts Powering a Better Internet 2010 Akamai Akamai Behavioral Re-marketing Akamai Advantages advertisement Family Oriented Powering a Better Internet 2010 Akamai Akamai Behavioral Re-marketing Akamai Advantages advertisement Pixel-Free Faster site performance Better site coverage Portable Broader selection of advertising Family Oriented Powering a Better Internet 2010 Akamai Extending Functionality in the Akamai Cloud Cloud Security Mobile Video Analytics Powering a Better Internet 2010 Akamai Extending the Akamai Edge Our Vision Cloud Video Analytics Security Mobile ISPs Local Loop Cell Towers Enterprise Client Powering a Better Internet 2010 Akamai Q&A Bob Hughes Executive Vice President Global Sales, Services & Marketing Aligning with the Opportunity Industry focus evolution Global expansion opportunity Cross-sell and upsell opportunity Powered by services and support Powering a Better Internet 2010 Akamai Serving the World's Leading Businesses Media & Entertainment High-Tech Commerce Enterprise Public Sector Powering a Better Internet 2010 Akamai Revenue 1200 $1,021B +19% 1000 $860M +9% $791M +24% 800 $ Millions Q4 consensus $739M 41.8 143.2 87.2 $636M 600 +35% +12% +18% +23% Public Sector High Tech Enterprise 400 145.7 200 321.0 +19% Commerce M&E 0 FY 2007 FY 2008 FY 2009 FY 2010 Est. Powering a Better Internet 2010 Akamai Expanding into New Industries: Life Sciences Initial Engagement: Global Site performance and reliability Further Penetration: Performance management across complex international website portfolio Results: Website speed increased 7X worldwide Site visitors view twice as many pages per visit 75% cost savings verses Roche's buildyour-own estimate Powering a Better Internet 2010 Akamai Expansion into Financial Services Initial Engagement: Site performance and data delivery Further Penetration: Integrating disparate sites & systems Now focused on mobile devices Results: Improved speed and delivery Outsourced complexity Reduced costs Improved time to market Delighted their customers Powering a Better Internet 2010 Akamai Growing the Base: Our Network is Global Powering a Better Internet 2010 Akamai Growing the Base: Our Operations are Global 2000: Germany, UK France offices open 2000--2005: Spain, Australia, Singapore, Japan, India 2005--2008: Sweden, Italy, South Korea, China 2009--2010: 19 new markets Today we are in 31 total markets Powering a Better Internet 2010 Akamai Online Global Travel Industry Industry Penetration: Over 125 global online travel companies trust Akamai to: Improve site performance Support International Growth Help reduce costs Powering a Better Internet 2010 Akamai Online Global Travel Industry Industry Penetration: Over 125 global online travel companies trust Akamai to: Improve site performance Support International Growth Help reduce costs Success in APAC: Powering a Better Internet 2010 Akamai Cross-sell/Upsell 78% of our customers have purchased at least 1 value-added service They represent 90% of our total revenue But only 45% of our customers have purchased more than 1 value-added service Service and Support is a $50M business today Powering a Better Internet 2010 Akamai An Akamai Shop Initial Engagement: Site performance (Dynamic Site Accelerator) Further Penetration: Integrating disparate sites & systems Now focused on mobile devices Onsite Akamai resource helped us grow from just Dynamic Site Accelerator to: Global Traffic Management Content Targeting Enhanced Domain Name Service Web Application Firewall Edge Side Includes Site Failover Shopper Prioritization Advanced Cache Optimization Advertising Decision Solutions Premium Support Powering a Better Internet 2010 Akamai An Akamai Shop Initial Engagement: Delivery of Johnson & Johnson principal sites Further Penetration: Signed a Master Services Agreement Turned on 22 sites Purchased our China CDN for Dynamic Site Accelerator Web Application Accelerator IP Application Accelerator Advanced Cache Optimization Content Targeting PCI Compliance Powering a Better Internet 2010 Akamai Snapshot: Our Customer Base is Evolving Q1 2007 Industry Commerce, Enterprise Public Sector: 30% M&E and High Tech: 70% Commerce, Enterprise Public Sector: 37% Q3 2010 M&E and High Tech: 63% Geography International: 22% Domestic 78% International:28% Domestic: 72% Product Value: 34% Volume: 66% Value: 55% Volume: 45% Powering a Better Internet 2010 Akamai JD Sherman, CFO Financial Overview Financial Themes Revenue growth Financial model Investments for the future Powering a Better Internet 2010 Akamai Shift in Overall Product Revenue % of Revenue Value-Add Services vs Volume Driven Services 70% 60% 55% 45% 50% 40% 30% 20% 10% 0% Q1 08 Q2 08 Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Q3 10 Volume as % of Total Value as % of Total Powering a Better Internet 2010 Akamai Shift in Overall Product Revenue % of Revenue Value-Add Services vs Volume Driven Services 70% 60% 55% 45% 50% Volume Driven Services 40% 30% Value Add Services Dynamic Site Solutions Application Performance Solutions Advertising Decision Solutions Advertising Technology Custom Services HD Video Enterprise Software Downloads Web Object Delivery Cloud Storage 20% 10% 0% Q1 08 Q2 08 Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Q3 10 Volume as % of Total Value as % of Total Powering a Better Internet 2010 Akamai Revenue 1200 $1,021B +19% 1000 $860M +9% $791M +24% 800 $ Millions Q4 consensus $739M 41.8 143.2 87.2 $636M 600 +35% +12% +18% +23% Public Sector High Tech Enterprise 400 145.7 200 321.0 +19% Commerce M&E 0 FY 2007 FY 2008 FY 2009 FY 2010 Est. Powering a Better Internet 2010 Akamai Media 450 400 350 300 29% 250 200 150 100 50 0 32% 34% +19% Y/Y +24% Y/Y +0% Y/Y 34% Volume Value FY 2007 FY 2008 FY 2009 FY 2010* *Estimate based on midpoint of guidance range Powering a Better Internet 2010 Akamai Media 450 400 350 300 29% 250 200 150 +19% Y/Y +24% Y/Y 32% +0% Y/Y 34% 34% 100 50 0 43% of total 17% value-added growth Y/Y Financial Model GM 55% EBITDA 40% ARPU - $34,000 Drivers HD Online Advertising Rich Media Mgmt FY 2007 FY 2008 Volume FY 2009 Value FY 2010* *Estimate based on midpoint of guidance range Powering a Better Internet 2010 Akamai Commerce 220 200 180 160 +22% Y/Y +26% Y/Y +42% Y/Y 140 120 86% 77% 100 64% 80 60 40 20 0 54% Volume Value FY 2007 FY 2008 FY 2009 FY 2010* *Estimate based on midpoint of guidance range Powering a Better Internet 2010 Akamai Commerce 220 200 180 160 140 120 +22% Y/Y +26% Y/Y +42% Y/Y 86% 77% 64% 54% 100 80 60 40 20 0 20% of total 37% value-added growth Y/Y Financial Model GM 85% EBITDA 50% ARPU - $20,000 Drivers Online Commerce Dynamic Transactions and Sites FY 2007 FY 2008 Volume FY 2009 FY 2010* *Estimate based on midpoint of guidance range Value Powering a Better Internet 2010 Akamai Enterprise +19% Y/Y 120 +22% Y/Y 100 +39% Y/Y 80 68% 60 44% 40 56% 75% Volume Value 20 0 FY 2007 FY 2008 FY 2009 FY 2010* *Estimate based on midpoint of guidance range Powering a Better Internet 2010 Akamai Enterprise +19% Y/Y 120 +22% Y/Y 100 +39% Y/Y 80 68% 60 44% 40 56% 75% 20 0 FY 2007 FY 2008 Volume FY 2009 Value FY 2010* 12% of total 31% value-added growth Y/Y Financial Model GM 90% EBITDA 50% ARPU - $12,000 Drivers Cloud Computing New customers, industries *Estimate based on midpoint of guidance range Powering a Better Internet 2010 Akamai High Tech 200 180 160 140 23% 120 100 80 31% +10% Y/Y +14% Y/Y +5% Y/Y 36% 48% 60 40 20 0 Volume Value FY 2007 FY 2008 FY 2009 FY 2010* *Estimate based on midpoint of guidance range Powering a Better Internet 2010 Akamai High Tech 200 180 160 140 23% 120 100 80 60 40 20 0 31% 36% 48% +10% Y/Y +14% Y/Y +5% Y/Y 19% of total 46% value-added growth Y/Y Financial Model GM 80% EBITDA 55% ARPU - $30,000 Drivers Software Delivery SaaS FY 2007 FY 2008 Volume FY 2009 Value FY 2010* *Estimate based on midpoint of guidance range Powering a Better Internet 2010 Akamai Long-term Financial Model Cash Gross Margins 1 76 78% 2 Mix-dependent GAAP Gross Margins Adjusted EBITDA Margins 1 Normalized Pre-tax Income Margins 1 GAAP Tax Rate Capex Margins 1 1 See 67 69%2 45 47%2 36 39%2 30 35%3 13 16%2 Geographic shift Investment-driven non-GAAP reconciliation tables for definition on the investor section of our website 2 As a percent of revenue 3 As a percent of pre-tax GAAP Income Powering a Better Internet 2010 Akamai Cash Gross Margins1 87% 85% 82.6% 81.8% 80.8% 83% 82.1% 81.7% 81.4% 81.8% 81.0% 81.2% 81.4% 81.5% 81.6% 82.2% 81% 79% 77% 75% Q3 07 Q4 07 Q1 08 Q2 08 Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Q3 10 Cash Gross Margin 1 See non-GAAP reconciliation tables for definition on the investor section of our website Powering a Better Internet 2010 Akamai Capex1 1,000 900 800 700 $ in millions 600 500 400 300 200 100 0 Capex 19% 13% FY 2005 1 See 16% FY 2006 16% 15% 13% Revenue FY 2007 FY 2008 FY 2009 FY 2010* * Assumes midpoint of guidance range non-GAAP reconciliation tables for definition on the investor section of our website Powering a Better Internet 2010 Akamai Capex1 1,000 900 800 2005 2010 15% 700 $ in millions 600 500 400 2007 2010 13% 16% 16% 15% 13% 15% Capex 19% Revenue 300 200 100 0 2009 2010 FY 2005 FY 2006 1 See FY 2007 FY 2008 FY 2009 16%2010* FY * Assumes midpoint of guidance range non-GAAP reconciliation tables for definition on the investor section of our website Powering a Better Internet 2010 Akamai Return of Invested Capital ROIC Including Goodwill and Intangibles 27% 26% 25% 24% 23% 22% 21% 20% 19% ROIC 2006 2007 2008 2009 2010* * Assumes midpoint of guidance range ROIC (Incl. Goodwill & Intangibles) = NOPAT / Invested Capital (Incl. Goodwill & Intangibles) Powering a Better Internet 2010 Akamai Focused Areas of Investment Strategic Acquisitions/External Investments R&D Innovation Market Reach Powering a Better Internet 2010 Akamai A $5B Company: How do we get there? $7,000 $6,000 Revenue (US$ millions) $5,000 $2B $1B $1B $1B New Opportunities: Media Cloud Mobile Security Data High Tech: SaaS adoption Enterprise: Cloud adoption Commerce: Online transactions, richer sites $4,000 $3,000 $2,000 $1,000 $0 2002 - 2010 Goal: $5B in Revenue and $2B in Pretax Income $2B M&E: 100X volumes Goal Powering a Better Internet 2010 Akamai Summary Attractive market opportunity Investing for growth Strong business model Powering a Better Internet 2010 Akamai Q&A

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