Akamai is a software company. It is not, fundamentally, an infrastructure company. You could blow up their network of servers from orbit, and most of the value of the company would be preserved. It’s a company that runs on its intellectual property, the breadth and depth of its feature set, and, ultimately, its ability to rapidly innovate software features. Like any SaaS company, it needs infrastructure upon which to deliver those features (which are mostly focused around content delivery), but the infrastructure itself is not really its value.

I used to be able to generalize this to the CDN market as a whole. Like most software markets, there was feature-set competition and the generality that what you invented today, your competitor would try to replicate in the next year.

I’ve come to the realization that this is no longer an accurate characterization. It’s true of Akamai and a very small number of competitors, but for everyone else, CDN has become an infrastructure play — about having a network and a lot of servers and just enough software to control it all efficiently.

Software and infrastructure businesses have very different characteristics, and the shift has a cascade of implications.