Regulations on data use and localization across countries have sparked business opportunities for global content delivery networks (CDNs) and cloud service operators. One of the beneficiaries is Akamai, which claims to have invented the foundational technology behind CDNs.
Increasing monitoring of data and fragmented regulations have thrown up new business opportunities for CDNs, said Tom Leighton, co-founder and chief executive of Akamai.
More governments are looking to regulate and control data, and this makes operations difficult to some extent, Leighton said in an interview. “But there’s more adoption of the internet, and as a result, there are more global entities. So, there’s a lot more use taking place over time. While government control presents challenges, they also present more opportunities,” Leighton said.
These opportunities come from a spate of regulations, including the Digital Personal Data Protection (DPDP) Act passed by Parliament on 9 August. The legislation brought control, sanctions and penalties on use and misuse of data by tech companies globally into Indian legislation for the first time.
Mint reported on 14 September that the Centre will set tight deadlines to large companies to comply with the new data rules, while smaller firms would get more time.
This can offer new monetization avenues for CDNs, Leighton said. “If you’re a global company, you’ve got to comply with all of the tech regulations around the world. This gives us a chance to come in, because we already have global technical skills that we can leverage across a large number of customers. Financially, this makes more sense—to be able to go to a company and manage their data-driven operations in different countries. That’s added value we can provide, which would otherwise be harder for individual companies,” he added.
To do this, global cloud service providers are working on being compliant to begin with. Akamai, Leighton said, has servers across 130 countries, which increases operational complexities rising out of the need to comply with various regulations such as the European Union’s General Data Protection Regulations (GDPR), and India’s DPDP Act.
Akamai has competition. In August last year, Jonathon Dixon, managing director, Asia-Pacific at rival CDN service Cloudflare, said the company was working to become compliant with India’s legislative requirements by the end of 2022. In September last year, the company launched a data localization suite for cloud and CDN customers.
“We have infrastructure almost everywhere, which means that we can serve the data within these regions, and we also do a lot of work to keep the data within the said region. This requires more investment on our side. To do all of this, we have 4,000 edge points of presence (PoPs) around the world, and are present across 1,200 different global networks—whom we work with to position our servers,” Leighton said.
The US-headquartered Akamai, which counts the likes of homegrown gaming startup Rooter, global gaming services Nintendo and Sony Playstation, and retail chain JC Penney among its CDN clients, registered an 8% constant-currency year-on-year revenue growth last year, with revenue at $3.62 billion. Leighton confirmed that Akamai today has over 2,500 employees in India, which accounts for a quarter of its global workforce.
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Updated: 26 Sep 2023, 12:02 AM IST