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Faster-Moving Clouds: Akamai and Riverbed Team Up

By Tim Beyers – Updated Apr 6, 2017 at 9:56PM

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How much value can this value-added service add?

What happens when rebels unite? We'll found out in the first half of 2012 when Akamai Technologies (Nasdaq: AKAM) and Riverbed Technology (Nasdaq: RVBD) complete integration of their respective platforms for accelerating content delivery.

Yesterday at the Interop trade show in Las Vegas, the companies announced their intent to jointly develop technology for embedding Akamai's algorithmic magic in Riverbed's Steelhead appliances, and vice versa.

The press release didn't offer much in the way of details. But in an interview, two of the principal executives -- Eric Wolford at Riverbed and Willie Tejada at Akamai -- said the companies had been talking about working together for seven years. Engineering teams are now working on turning that talk into tech. Customers should see something during the first half of 2012.

"Willie and I found ourselves on a panel (in 2004). We didn't know each other, and although his world was focused on the Internet and mine was focused on the Intranet, we noticed a remarkable similarity in what we were talking about," Wolford said.

And there are similarities still. Both companies specialize in making data move faster; it's the approaches and markets that differ. Riverbed's deduplication technology strips away unnecessary information before sending data over a private network. Akamai positions data geographically close to users.

By combining efforts, Akamai and Riverbed hope to serve a growing number of companies extending their internal networks using cloud computing platforms from (Nasdaq: AMZN), Verizon (NYSE: VZ), and Akamai partner Rackspace Hosting (NYSE: RAX). These so-called "hybrid clouds" could see a performance boost by adopting Riverbed and Akamai accelerants throughout, speeding data delivery from the first click. Or at least that's my hope as an investor.

We won't know anything for sure until the technical work is done. Until then, Akamai investors can take comfort in management knowing that it's value-added services like this one where its earnings bread is buttered, and Riverbed's investors can celebrate seeing the Steelhead technology gain continued traction.

Do you agree? Disagree? Tell us what you think about the partnership between these two Motley Fool Rule Breakers recommendations using the comments box below. You can also rate Akamai or Riverbed in Motley Fool CAPS.

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Akamai, Rackspace Hosting, and Riverbed Technology are Motley Fool Rule Breakers recommendations. is a Motley Fool Stock Advisor selection.

Fool contributor Tim Beyers is a member of the Rule Breakers stock-picking team. He owned shares of Akamai at the time of publication. Check out Tim's portfolio holdings and Foolish writings, or connect with him on Twitter as @milehighfool. You can also get his insights delivered directly to your RSS reader. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool is also on Twitter as @TheMotleyFool. Its disclosure policy couldn't help but notice that you look great today. Well done.

Stocks Mentioned

Riverbed Technology, Inc. Stock Quote
Riverbed Technology, Inc.
Akamai Technologies Stock Quote
Akamai Technologies
$93.79 (-1.48%) $-1.41 Stock Quote
$94.13 (-1.44%) $-1.37
Verizon Communications Stock Quote
Verizon Communications
$38.18 (-0.39%) $0.15
Rackspace Hosting, Inc. Stock Quote
Rackspace Hosting, Inc.

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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