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The demise of StackPath and why it’s hard to sell ‘vanilla’ edge

The demise of StackPath and why it’s hard to sell ‘vanilla’ edge

StackPath, a prominent player in the Content Delivery Network (CDN) and edge computing space, recently announced its plan to close the business and liquidate its assets, leaving many of its customers scrambling to find alternatives.

The company was known for its robust CDN services and ambitious forays into edge computing. The closure marks the end of an era for the company, which once operated 73 edge locations across 43 metro markets.

StackPath’s demise raises critical questions about the future of CDN and edge computing services, particularly for enterprise customers reliant on their infrastructure. Dalia Adib, director, consulting and CCO of STL Partners emphasizes the complexity of operating a multi-tenanted CDN platform: “It requires sophisticated technology to ensure economies of scale, supporting diverse workloads across different customers.”

The market dynamics have been shifting towards true distributed or edge computing, involving the expansion from dozens to hundreds of nodes globally. This transformation, however, poses significant challenges. Adib notes, “The expansion from dozens of CDN nodes to hundreds of nodes (i.e. true distributed/edge computing) is non-trivial and the need for economies of scale suggests that only few distributed edge CDN providers will win in the market. The jump from a traditional CDN platform to a comprehensive edge platform is not straightforward. It’s a different business model that targets a broader customer base.”

Indeed, the consolidation in the CDN and edge computing sector suggests that only a few providers with the requisite scale and technology will thrive.

“It raises questions on how Akamai (albeit a much bigger company) will be able to be successful with its general edge computing platform, Gecko, as it seeks to move beyond CDN,” Adib continues.

“An obvious starting point may be to focus on supporting traditional companies (e.g. media, web players) with non-CDN workloads first, e.g. personalized ads for media services, AI inferencing (for enhanced user experience), etc.”

The competitive landscape further underscores the challenges of selling generalized edge services. Successful players often specialize in specific application domains or industries such as media streaming enhancements, telecoms/networks, or industrial-focused edge cloud solutions. Adib remarks, “What we are finding in the edge market is that it is difficult to sell ‘vanilla’ edge. Focusing on distinct propositions like private cloud, data privacy, or local AI proves crucial in navigating the complexities of the edge market.”

The closure of StackPath serves as a poignant reminder of the volatility within the tech industry, particularly in sectors grappling with rapid technological advancements and shifting customer demands. As enterprises reassess their CDN and edge computing strategies in light of StackPath’s exit, the spotlight now shifts to how remaining providers will innovate and adapt to meet the evolving needs of enterprise customers worldwide.

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