CASESTUDY Akamai Technologies: When Demand Exceeds Capacity
Read the attached case and answer the following questions:
1. Why does Akami need to geographically disperse its servers to deliver customers web content?
2. If you want to deliver software content over the Internet, would you sign up for Akami’s service? What alternative costs exist?
3. What advantages does an advertiser derive from using Akami’s service? What kind of products might benefit from this kind of service?
4. Why dont major business firms distribute their videos using P2P networks like BitTorrent?
5. Do you think Internet users should be charged based on the amount of bandwidth they consume, or on a tiered plan where users would pay in rough proportion to their usage?
3.7 CASESTUDY Akamai Technologies: When Demand Exceeds Capacity
In 2011, the amount of Internet traffic generated by YouTube alone is greater than the amount of traffic
on the entire Internet in 2000. By 2015, the digital equivalent of all the movies ever made will cross over
the Internet every five minutes. In the last year, Netflix’s subscriber base jumped over 50% to 16 million,
most of whom are now streaming movies over the Internet, and they now account for 20% of all
Internet traffic in the United States. Because of video streaming and the explosion in mobile devices
demanding high-bandwidth applications, Internet traffic has increased 800% since 2006, and is
predicted to expand four times by 2015. Internet video is now 40% of Internet traffic and will reach 62%
by 2015, according to networking giant Cisco Systems. Mobile platform traffic from smartphones and
Wi-Fi devices is growing at 60% and will soon push cell networks and the Internet to their capacities.
Cisco estimates that annual global Internet traffic will hit nearly 1 zettabyte in 2015—that’s 1,000
exabytes, or, in other words, 10 with 19 zeroes behind it!
Experts call applications like Netflix, YouTube, and high definition streaming video services “net bombs”
because they threaten the effective operation of the Internet. At some point, demand will exceed
capacity, and either there will be “brownouts” where everyone’s connection speed slows down or
“capping” of bandwidth hogs (those 10% of Internet users who consume 60% of the Internet’s capacity
because of extensive video downloading).
Analysts differ on how fast Internet capacity is growing. Large telecommunication companies (AT&T,
Verizon, Comcast, and Level3) argue that demand will overwhelm capacity by 2015, while other experts
argue that Internet bandwidth can double every year for a very long time, and easily keep up with
demand. Perhaps they’re both right: Internet capacity can expand to keep up with demand if sufficient
capital is invested in backbone and local networks. That’s a big “if.” As a result, and in order to raise
capital, nearly all the large ISPs such as Comcast, Charter, Cox, andAT&T have bandwidth caps in place
where heavy users of video are charged more for their Internet service. More charges based on usage
are in the pipeline.
Is Internet bandwidth capacity doubling every year? The proof is in the pudding. How fast have your
home or office bandwidth connections grown in the last year? Chances are, your Internet connect speed
has not changed in several years. Over 1.1 million people online watched the U.S. soccer team beat
Algeria in the 2010 World Cup, the largest online sports event in history. Many viewers reported
dropped frames, interrupted video, and poor coordination of video and audio. On January 20, 2009, the
Internet experienced an unheralded meltdown that generally escaped public notice or concern. It was
the inauguration day of Barack Obama in Washington, D.C. More than 10 million people tried to watch
the event on the Internet, but many were not able to view the live video feed because the Internet did
not have the capacity to handle the traffic. Not only did 3 million users not receive any video, but many
of the 7 million who were able to establish a connection were treated to burpy audio, freeze-frame
video, and lost backgrounds. Cable and broadcast television viewers had no problem. Today you can
check your bandwidth capacity by looking carefully at movies that you stream at home. On a busy Friday
or Saturday night, the average Internet home viewer will experience stuttering video and sound. This is
hardly the stuff of a bright future for mass audience video over the Web.
In today’s broadband environment, the threshold of patience is probably much lower than even a few
seconds. Increased video and audio customer expectations are bad news for anyone seeking to use the
Web for delivery of high-quality multimedia content such as CD-quality music and high definition video.
If you are SIRIUS/XM Radio and you want to stream online music to several million users a day, you will
definitely need some help. If you are MTV and want to stream music videos to your 10million viewers
online, or Apple iTunes and want to download music or video files to your 225 million online customers,
you will also need some help. Akamai is one of the Web’s major helpers, and each of the preceding
companies, along with most of the Web’s top companies, use Akamai’s services to speed the delivery of
content. Akamai serves over 1 million simultaneous media streams on a typical day.
Slow-loading Web pages and Web content—from music to video—sometimes result from poor design,
but more often than not, the problem stems from the underlying infrastructure of the Internet. As you
have learned in this chapter, the Internet was originally developed to carry text-based e-mail messages
among a relatively small group of researchers, not bandwidth-hogging graphics, sound, and video files to
tens of millions of people all at once. The Internet is a collection of networks that has to pass
information from one network to another. Sometimes the handoff is not smooth. Every 1,500-byte
packet of information sent over the Internet must be verified by the receiving server and an
acknowledgment sent to the sender. This slows down not only the distribution of content such as music,
but also slows down interactive requests, such as purchases, that require the client computer to interact
with an online shopping cart. Moreover, each packet may go through many different servers on its way
to its final destination, multiplying by several orders of magnitude the number of acknowledgments
required to move a packet from New York to San Francisco. The Internet today spends much of its time
and capacity verifying packets, contributing to a problem called “latency” or delay. For this reason, a
single e-mail with a 1 megabyte attached PDF file can create over 50 megabytes of Internet traffic and
data storage on servers, client hard drives, and network backup drives.
Akamai (which means intelligent, clever, or “cool” in Hawaiian) Technologies was founded by Tom
Leighton, an MIT professor of applied mathematics, and Daniel Lewin, an MIT grad student, with the
idea of expediting Internet traffic to overcome these limitations. When Timothy Berners-Lee, founder of
the World Wide Web, realized that congestion on the Internet was becoming an enormous problem, he
issued a challenge to Leighton’s research group to invent a better way to deliver Internet content. The
result was a set of breakthrough algorithms that became the basis for Akamai. Lewin received his
master’s degree in electrical engineering and computer science in 1998. His master’s thesis was the
theoretical starting point for the company. It described storing copies of Web content such as pictures
or video clips at many different locations around the Internet so that one could always retrieve a nearby
copy, making Web pages load faster.
Officially launched in August 1998, Akamai’s products include Digital Asset Solutions such as Akamai HD
Network, which enables Web sites to deliver an online HD experience, Dynamic Site Solutions, which
speed up the delivery of rich interactive content, and Application Performance Solutions, a suite of
services that allows corporations to maximize their Web performance. Akamai’s products allow
customers to move their Web content closer to end users so a user in New York City, for instance, will
be served L.L.Bean pages from the New York Metro area Akamai servers, while users of the L.L.Bean site
in San Francisco will be served pages from Akamai servers in San Francisco. According to Akamai, 85% of
the world’s Internet users are within a single network “hop” of an Akamai server. Akamai has a wide
range of large corporate and government clients: 1 out of every 3 global Fortune 500 companies, 90 of
the top 100 online U.S. retailers, all branches of the U.S. military, all of the top Internet portals, all the
major U.S. sports leagues, and so on. Akamai has over 95,000 computer servers on nearly 1,900
networks in 71 countries around the world. In 2011, Akamai delivers between 15% and 30% of all Web
traffic, and hundreds of billions of daily Internet interactions. Other competitors in the content delivery
network (CDN) industry include Blue Coat, Limelight, Savvis, and Mirror Image Internet.
Accomplishing this seemingly simple task requires that Akamai monitor the entire Internet, locating
potential sluggish areas and devising faster routes for information to travel. Frequently used portions of
a client’s Web site, or large video or audio files that would be difficult to send to users quickly, are
stored on Akamai’s 95,000 servers around the world. When a user requests a song or a video file, his or
her request is redirected to an Akamai server nearby and the content served from this local server.
Akamai’s servers are placed in Tier 1 backbone supplier networks, large ISPs, universities, and other
networks. Akamai’s software determines which server is optimum for the user and then transmits the
“Akamaized” content locally. Web sites that are “Akamaized” can be delivered anywhere from 4 to 10
times as fast as non-Akamaized content. Akamai has developed a number of other business services
based on its Internet savvy, including content targeting of advertising based on user location and zip
code, content security, business intelligence, disaster recovery, on-demand bandwidth, and computing
capacity during spikes in Internet traffic in partnership with IBM, storage, global traffic management,
and streaming services. Akamai also offers a product line called Advertising Decision Solutions, which
provides companies with intelligence generated by the Internet’s most accurate and comprehensive
knowledge base of Internet network activity. Akamai’s massive server deployment and relationships
with networks throughout the world enable optimal collection of geography and bandwidth-sensing
information. As a result, Akamai provides a highly accurate knowledge base with worldwide coverage.
Customers integrate a simple program into their Web server or application server. This program
communicates with the Akamai database to retrieve the very latest information. The Akamai network of
servers is constantly mapping the Internet, and at the same time, each company’s software is in
continual communication with the Akamai network. The result: data is always current. Advertisers can
deliver ads based on country, region, city, market area, area code, county, zip code, connection type,
and speed. You can see several interesting visualizations of the Internet that log basic real-time Web
activity by visiting the Akamai Web site and clicking on “Data Visualizations.”
As impressive as Akamai’s operation has become, it is not nearly enough to cope with the next 10 years
of Internet growth, which is expected to be over 100% a year. It’s unclear that government authorities in
the United States or elsewhere are aware of the serious imbalance between the demand for Internet
services and capacity. The Obama administration has pledged to double broadband wireless Internet
capacity in the next 10 years. Even if successful, the effort would be totally inadequate because Internet
mobile traffic is expected to quadruple in four years. Private industry will not be able to meet Internet
demands either unless it can successfully charge customers for the bandwidth they use rather than
charge a flat fee for all users regardless of how much capacity they use. Proponents of “net neutrality”
oppose industry demands to charge for usage, and the FTC is resisting efforts by industry to charge for
usage. The proponents of net neutrality include some heavy hitters like Google, Microsoft, AOL, and
Yahoo, all of whom want their customers to think the Internet is “free” no matter what is clicked on. The
last thing Google wants is for users to hesitate when thinking about viewing a YouTube video because
they might have to pay for the experience. In an ominous sign of the disconnect between Washington
and industry, Verizon halted a $23 billion build-out of its fiber-optic network to homes (FiOS) for fear
they would not be able to recover their costs unless they could charge customers for the amount of
bandwidth they use. Without charging for Internet use based on bandwidth consumed by customers,
Internet capacity will be overwhelmed by demand in the foreseeable future despite the effortsof firms