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The deal will double the size of Akamai’s security business.
Akamai Technologies Inc., which sells content delivery, web hosting and web performance management services via a global network of servers and technology platforms, will acquire web security firm Prolexic Technologies Inc. for roughly $370 million, Akamai announced today. The deal will double the size of Akamai’s Internet security business and extend its reach to customers’ data centers and non-web applications, such as e-mail and tools for staff to share digital files, the company says.
Prolexic builds technology for identifying and blocking distributed denial of service, or DDoS, attacks. Those attacks are designed to overwhelm a site with traffic, causing it to slow down or become inaccessible to legitimate visitors.
“Akamai has built a suite of security solutions to defend web sites and web applications against DDoS attacks, as well as more nefarious application-layer attacks,” Akamai CEO Tom Leighton told analysts in a conference call this morning. “Our current offerings do not, however, cover non-web applications, nor do they protect a customer’s data center or IP address space,” which are the areas of focus for Prolexic.
The acquisition saves about two years on the time Akamai would need to develop its own DDoS protection for data centers, including those used by e-retailers, and non-web applications, he says.
Prolexic defends customers from Internet attacks by routing their web traffic through its security center, which scrubs out any malicious traffic and sends through only normal business requests. Most security systems require installing hardware in a customer’s data center to do that, but Prolexic hosts its technology in the cloud, that is, on the Internet, Leighton says.
“The big advantage of having a service where you do the filtering in the cloud is that you have much more capacity to withstand large DDoS attacks, and DDoS attacks are quite often about volume,” he says. “Really today, with the scale of attacks that we're seeing, it just isn't good enough anymore to be buying a box in the traditional way and adding pipes to your data center.”
Headquartered in Fort Lauderdale, FL, Prolexic’s 200 employees will join Akamai’s staff, Jim Benson, chief financial officer and executive vice president of Akamai, said on the call. Using 2013 estimates, Prolexic would have brought in $50 million in security products revenue to Akamai this year, which effectively doubles the size of Akamai’s security business, he said. Both companies charge clients a monthly fee to use their Internet-hosted security technologies.
Akamai ranks No. 1 among the top 10 content delivery providers in Internet Retailer’s Top Tech 2014. The company also ranks No. 4 for web hosting and No. 8 for web performance monitoring. It has 167 clients among the Internet Retailer Top 500 and 23 among the Second 500.