Structure 2010: Akamai “Doing Terabit Events” (Thanks, World Cup)

What do banks, soccer fans and smartphones have in common? They’re all part of what’s shaping Akamai Technologies’ (s AKAM) business, according to CEO Paul Sagan, who joined Om for a fireside chat today at Structure 2010. Sagan explained that Akamai, which delivers some 20 percent of global Internet traffic, is working with a growing number of financial services firms, it’s delivering massive amounts of traffic for World Cup matches in HD and it’s “trying to do website transformation on the fly” to improve the interface on mobile phones.

With millions of viewers now watching events like the World Cup and the Olympics “on their TV with full Internet connectivity, all done in the player without needing a box,” said Sagan, “we’re at a tipping point for HD.” These are “terabit events” for Akamai, he said, “which is phenomenal.”

Most of Akamai’s business — more than half of the company’s revenue, according to Sagan — stems from optimizing infrastructure as a service. More than 100 software-as-a-service providers currently use Akamai.

Akamai serves 90 of the top 100 e-commerce sites online, and earlier this month it acquired the mobile services company Velocitude, a move that will allow Akamai to deliver mobile commerce services without creating applications or websites to target individual devices. Sagan said today that the idea is to take a website designed with rich media for a laptop-sized display, and optimize it for mobile. That means more than just shrinking it down for the smaller form factor — it’s also about adapting the interface to user activity. For example, users accessing e-commerce sites from handheld devices typically will want to know where’s the store, is it open, and can I go pick something up, rather than browsing, Sagan said.

Increasingly, said Sagan, Akamai is serving “Big Fortune 500 enterprises, not just big media companies, which is where we entered the sector.” Last year, said Sagan, the company signed some of its biggest deals in the financial services sector “in every major geography around the world.”

Amid this growth, Sagan sees a looming challenge for cloud service providers in sorting out privacy issues. Growing pools of data raise the questions of how it got there, who owns it, who has rights to it — and who’s responsible for protecting it. As a result, government will probably step in. “Government is out there wanting to help,” said Sagan. But in contrast with the Internet, governments are “all about states and borders.”

At this point, Sagan says the cloud services industry should take a proactive stance. “We need to be pretty transparent about what we’re doing, and engage in the discussions,” he said. At a time when some industries are finding themselves in the position of saying, “Senator, let me explain myself,” cloud players should take that as a warning. “It’s probably not the most productive conversation at that point after you’ve raised your hand and been sworn in.”

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