StackPath, which has thousands of CDN customers, mostly in the SMB market, has notified customers of their intent to exit the content delivery business and cease CDN operations on November 22, 2023. As part of their exit from the space, Akamai has acquired “approximately” 100 enterprise CDN contracts from StackPath.
Akamai says these select customers represent at least $50,000 in ARR with the potential to grow to a minimum $100,000 ARR by cross-selling security and compute. Akamai says most of the customers are net-new for the company with very little overlap across their current customer base. Akamai anticipates this transaction will add approximately $20 million in revenue for the full year in 2024.
Akamai is not acquiring any IP or patents from StackPatch and is not taking on any of their adult customers or any services tied to transit, co-location, or managed services, which was part of StackPath’s offering since their acquisition of Highwinds, BandCon, and MaxCDN.
It is unknown what will happen to the thousands of other CDN customers StackPath has, the majority of which are very small. Some of these customers are paying as little as $10 a month, so CDN services are not crucial to their business. StackPath’s exit from the CDN market will have no real impact on the industry since StackPath had not been a major player in the space for many years. Industry analysts have been overestimating StackPath’s CDN revenue by hundreds of millions of dollars, which they didn’t have. The company had under $50 million in actual CDN revenue tied to large customers with many analysts including non-CDN services like transit and colocation in their numbers.
StackPath was launched in 2016 having raised $150 million and did four acquisitions to start the company, including MaxCDN, a small CDN setup for self-service SMB customers. In 2017, StackPath acquired Highwinds, another CDN with a larger customer base and used their branding for their CDN services. In 2010, Highwinds acquired BandCon, which provided IP services, transit, colocation, and other infrastructure services.
With Akamai not taking on any StackPath employees or infrastructure and simply acquiring contracts, it’s an easy and no-risk value proposition for the company. Terms of the deal were not disclosed.