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Fastly adds programmable edge capabilities with the purchase of Fanout — but it needs to add new customers, too

Fastly adds programmable edge capabilities with the purchase of Fanout — but it needs to add new customers, too

Fastly, a provider of edge cloud and security services, said it has entered into a deal to buy Fanout to help developers build and scale real-time and streaming APIs for the edge network. The terms of the deal were not disclosed.

Like other CDN and edge platform vendors have seen, Fastly customers place high importance on enhanced digital experience for customer engagement. Engagement means customers are more loyal and spend more time (and or money) on sites.

Fastly executives said this led to the team’s decision to integrate Fanout technology into Fastly’s edge network.

“We’ve always been driven to create the tools our customers need for building and delivering exceptional digital experiences behind the best of the web,” said Joshua Bixby, CEO of Fastly.

“Integrating Fanout’s real-time application technology into ours gives developers a consistent development experience, empowering them to effortlessly upgrade their end-user experiences in a fraction of the time and with fewer resources,” according to Bixby. “The integration will also allow customers to leverage Fastly’s global scale to support the needs of the largest enterprises,” he added.

The acquisition is intended to help enterprise customers build real-time applications while leveraging edge compute and network services, reducing the time-to-market. One of the key highlights of the Fanout technology is that it removes the constraints on the number of connected clients, which means it’s a one-to-many message fan-out.

The value proposition brought in by Fanout’s technology into the Fastly platform is the ability to streamline workflows efficiently and allow developers to build immersive customer experiences mitigating the concern for real-time protocols. Moreover, the integration will allow customers to use the existing HTTP origin for real-time application development rather than maintaining the complex and expensive WebSocket.

“With the addition of the Fanout technology into Fastly’s portfolio, it positions Fastly well to support customers that want to migrate away from existing, complicated in-house WebSocket stacks, as well as customers who don’t have engineering resources to build a push architecture for real-time data and communications to any device, anywhere,” said IDC Research Vice President Ghassan Abdo in a prepared statement.

Going forward, Fastly plans to integrate the Fanout proxy into its Compute@Edge serverless services that enable developers to design interactive real-time applications that are not only secure but can be deployed at scale within Fastly’s edge network.

Growth Strategy: a look ahead

The purchase is part of Fastly’s growth strategy to extend its footprint in the edge cloud services that increase performance, security, and innovation for the enterprise customers.

Fanout has six employees, suggesting that the deal is about acquiring technology and people and not one that will have a material impact on Fastly revenues in the near term.

To the latter point, Fastly has not been growing revenues as fast as competitors such as Cloudflare — a point that has meant its stock has fallen somewhat out of favor with Wall Street analysts.

At the Morgan Stanley 2022 Technology, Media and Telecom Conference on in March, Bixby acknowledge that growth will require accelerating new customer adds. “We’ve been exceptionally good at nurturing our customers and growing them, we need to be equally good at getting new ones,” he said. The company expects to see results from a revamp of sales efforts to drive new customer acquisitions and network traffic in the second half of 2022.

Editor Jim Davis contributed to this report

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