iTunes Un-Happy Holidays

Update: Akamai spokesperson declined to comment. We are still waiting to hear from Apple.

Apple’s holly jolly Christmas, that resulted in extended outages and infuriating delays for customers trying to access the iTunes Store have been well reported. Some of us (guilty as charged) were amazed at how successful Apple was in squeezing billions of dollars out of its iPod franchise. According to Hitwise, there was a 1,222% increase in traffic to the iTunes store on Christmas day compared with the previous Monday. The traffic to the Apple Store was up 110%.

An AFX report on CNN Money website quoted Michael Gartnerberg of Jupiter Research as saying…

‘What you’re seeing is the tremendous success of the iPod …. No doubt it was a very, very popular gift, and no matter how well you plan on the server side of the equation, there are always times when you get caught short.’

Getting caught short just be the excuse of choice this season. Sony and Nintendo were caught short and did not have enough consoles. Their inability to meet the market demand for their consoles may be excusable since they were introducing new platforms, but Apple with a few successful holiday seasons under its belt did not have to face those issues. So why did they really have the problems at the iTunes store?

Forget what they tell the analysts – Apple is one of those companies which can pretty accurately forecast demand for its products. It is reasonable to assume that Cupertino knew that it would sell a lot iPods. And since the sales of iPods are in near direct correlation with visits to the iTunes store, there is a reasonable chance that Apple also knew that the traffic to the iTunes store would be up sharply.

In other words, someone did not plan properly for this holiday season. Of course, there is another explanation – one of their key infrastructure provider, Akamai Technologies failed to keep up with the iTunes crush.

Akamai’s content delivery network is supposed to keep things up and running without fail. (See how Akamai’s service works!) That is one of the reasons why Akamai can charge premium over others. They often talk about 20,000 servers in 71 countries to make the music delivery seamless and reliable.

If what Akamai promises is delivered then none of us should have experienced the iTunes Store outage. Akamai is betting big on digital music – streaming and download varieties – to make a lot of money for next few years. The iTunes store meltdown certainly is not going to help with that.

Update: Akamai spokesperson declined to comment. We are still waiting to hear from Apple.