Scrub-a-dub-dub: Akamai and Prolexic in the tubBy Mike Rothman
They say it is better to be lucky than good. I seem to test that theory on a daily basis. Just yesterday I ranted about the need for multi-layer DoS defenses, mostly by poking at a Prolexic white paper advocating the opposite. I alluded to the reality that most customers wouldn’t run all their traffic through a scrubbing center, so they need on-premise defenses as well (so a multi-layer system).
What I didn’t specifically say is that if all traffic runs through a processing center, a customer could get pretty full DoS protection. Then Akamai went and bought Prolexic for $370MM in cash, basically to test that concept. The combined entity can (at least on paper) offer DoS protection against both volumetric and application-layer attacks as part of a single service, as long as (and tis is the big qualifier) all traffic is running through the provider… which is Akamai’s normal mode of operation, and fits well with their pricing model.
The deal makes sense for perspective both parties. Prolexic gets a parent with deep pockets, which is critical when you need to keep pace with ever-increasing bandwidth available to ever-increasing millions of compromised devices being used as DoS artillery. Prolexic’s investors get out at a reported 7-8x sales multiple, which is generous for a business with significant infrastructure and bandwidth costs impacting profitability.
Akamai gets a blue-chip customer base of large enterprises who get hammered by DoS attacks daily. They get some sales folks (hopefully the ones who stay) who understand security. They also get some research, response processes, and know-how to supplement their existing in-house capabilities. Akamai has struggled to make inroads in the security business, so clearly this adds significant momentum and some credibility.
They also get to leverage their existing global network as the underlying infrastructure for Prolexic’s services. That takes one of the huge costs of running a DoS service provider – bandwidth – out of the mix. Not that Akamai gets free bandwidth. But given the size of their CDN networks, Prolexic’s bandwidth requirements should be a drop in the bucket. Maybe not even that…
Of course I add my usual caveat that even the best paper deals all come down to execution in the end. There are countless ways Akamai could bungle this deal and squander the hammerlock they just bought in enterprise DoS mitigation services. But on the surface this deal makes perfect sense – which is rare for security deals lately.
Photo credit: “bath time for pandas” originally uploaded by Second Life Resident Torley