Content delivery networks (CDNs) operated by Akamai Technologies (NASDAQ:AKAM), Limelight Networks (NASDAQ:LLNW), and Level 3 (NASDAQ:LVLT) are a dime a dozen. So says conventional wisdom -- and Raj Dutt.

Dutt's the chief executive of Voxel, a provider of hosting services that has its own CDN, as well as dedicated servers for some of its larger clients. For the unfamiliar, hosting is like data outsourcing -- you own a website or business that deals in Web traffic, but you outsource the equipment and software to manage the traffic to another company, which "hosts" that information for you.

"Every single CDN competes on price, and there are too many providers," Dutt told GigaOm's Stacey Higginbotham in a recent interview. "And they're all going after the same business, so what used to be high margin is now marginally better than selling IP transit."

So the juicy gross profit margin that Akamai enjoys -- 76.9% over the trailing 12 months -- may soon be no more, eaten by a rotten economy and low-cost upstarts? Dutt says yes. He may be right.

The curse of the CDN business
Dutt's Voxel competes against Rackspace (NYSE:RAX) and other companies that promise comprehensive data storage and delivery on the cheap. These are the generalists; Akamai and its peers are the specialists. Investors fear that, over time, generalists will be good enough to supplant the specialists. Even when it comes to Web content delivery.

Voxel has only fed those fears. Whereas some hosters turn to specialist CDNs for help when traffic gets overwhelming -- Rackspace uses Limelight, for example -- Voxel handles 100% of its customers' traffic. What if others follow suit?

Akamai is under assault as is. In January, industry watcher Dan Rayburn confirmed that Apple (NASDAQ:AAPL) had begun employing Limelight for some content delivery. Previously, Akamai had been the iEmpire's exclusive provider.

Meanwhile, top techies such as Robert Scoble are lauding the efforts of BitGravity, a rebel company that believes it has created the premium CDN for video delivery. Executives at Tata Communications agree; they've partnered with BitGravity to provide CDN services to customers and invested $11.5 million in the upstart.

And let's not forget EdgeCast, which struck a similar deal with Deutsche Telekom at the time Rayburn broke the news about Limelight's Apple breakthrough.

Why the CDN curse is more of a blessing
So there are excellent reasons to be skeptical of Akamai's long-term advantage. Healthy skepticism ought to be a key part of every investor's toolkit.

But Dutt's predictions are far too dire. Pure-play CDNs that deliver little more than Web pages may, indeed, be dying. Panther Express operated that sort of network, and China's CDNetworks acquired the company last month.

Akamai has a much richer business. So does Limelight. And even if BitGravity is winning well-deserved acclaim, Web video delivery is anything but a perfect science. Just ask Netflix (NASDAQ:NFLX). This week, the company was forced to refute rumors that it was throttling the streams of premium customers watching online.

Watch Instantly? Not so instant for some, yours truly included. I've been watching The Natural via my Netflix account recently, yet the film often resets, adjusting to match my Internet speed. Whatever that means. (Ours is a very fast broadband wireless connection.)

Akamai has a stake in solving this problem. With Microsoft (NASDAQ:MSFT), it recently unveiled "smooth streaming," a service that senses the speed at which bits may be delivered to avoid delays and interruptions. Broadcasters in Canada and Italy have already taken to the technology.

The Next Big Thing hasn't yet been delivered
CDNs are changing and Akamai is changing with them. Can it navigate the transition effectively? So far, so good: Revenue rose 16% in the fourth quarter. Margins held up in the same period, and cash continued to flow, as it has for years. Akamai had more than $300 million in cash and liquid investments as of Dec. 31.

The truth about tech is that the Next Big Thing often takes decades to develop. Content delivery was one of those Next Big Things once, a decade ago, and it still needs improving. So long as that remains true, there's every reason to hold Akamai for the very long term.

Microsoft is an Inside Value pick. Apple and Netflix are Stock Advisor selections. Akamai is a Rule Breakers recommendation. Try any of these Foolish services free for 30 days. There's no obligation to subscribe.

Fool contributor Tim Beyers had stock and options in Apple and a stock position in Akamai at the time of publication. Check out Tim's portfolio holdings and Foolish writings, or connect with him on Twitter as @milehighfool. The Motley Fool is also on Twitter as @TheMotleyFool. Its disclosure policy went out for a walk to deliver a cup of sugar to a neighboring disclosure policy.