"Starting in the fourth quarter of 08, content that I historically saw being delivered from Akamai, also started coming from Limelight Networks," Rayburn wrote in this blog post. Last week, he says, Limelight delivered a QuickTime update to users on behalf of Apple.
Akamai investors have a right to be nervous. Apple was an early backer of the company and, at one time, the exclusive supplier of content for QuickTime TV. Of Akamai's longest-standing business partners, only Microsoft
But this isn't a break-up. Rather, it's a sign that the CDN market is changing. Deutsche Telekom
So the market has become more competitive. The question before investors is whether Apple's deal with Limelight reflects a degrading of Akamai's advantage or a bigger appetite for data delivery. My guess is that it's a little of both.
We've known for a while that rivals were undercutting Akamai on price. But we also know that Web traffic is growing fantastically. CNN.com set a record with more than 21 million Internet video streams the day of President Obama's inauguration, better than three times its prior peak. Akamai supported roughly 7 million streams that day.
The implication? Apple, recognizing that Akamai could be nearing capacity, has hired Limelight to be a backstop. Don't look so surprised; the iEmpire has 17 million iPhones out there pushing and pulling data to and from the Web. Ma Bell delivers some of the content, sure, but when you're downloading from iTunes -- as so many did on Christmas Day -- you're using Akamai, not Limelight. Yet.
Akamai reports fourth-quarter earnings next Wednesday, Fools. I'd tune in.
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Fool contributor Tim Beyers had stock and options positions in Apple and a stock position in Akamai at the time of publication.
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