Yahoo Finance Akamai (AKAM) Survey Shows Rising Demand for Cloud Solution
Akamai Technologies, Inc. AKAM recently published a survey report indicating that 95% of channel partners consider cloud technology a major component of their client’s 2023 strategy. Despite recognizing the need for cloud adoption, many enterprises remain cautious in their investment decisions. The study suggests the recent macroeconomic volatility, rising costs and balancing with other IT operational expenses are the main reasons behind the firms’ conservative behavior.
The study sample comprised 386 respondents from several nations, including Singapore, Australia, New Zealand, India, China and Japan. Respondents from India, Vietnam and Indonesia expected that around 60% of the IT budget would be focused on the cloud. On the contrary, a significant portion of responders from Thailand, Japan and Taiwan opined that less than 20% of the IT budget would be devoted to cloud adoption.
With the increasing digitalization of commercial activities, enterprises are witnessing rising consumer demand for various online services, resulting in higher data generation and information flow. Consequently, it is becoming increasingly challenging for enterprises to invest and expand IT infrastructure and provide optimum service with in-house computing.
Akamai is looking to address these issues with its connected cloud, a user-friendly cloud solution with greater transparency, flexibility and an easy-to-use interface. With ever-changing workloads, cloud solutions will allow users to scale the resources according to requirements, thus nullifying the risk of over-investments and over-provisioning in data centers and ensuring better resource utilization. Cloud technology also enables developers to accelerate innovation and rapid deployment of applications, thus reducing the time to market.
Along with its cloud technology, Akamai — with its advanced security solutions — is emphasizing on providing robust protection to its customers against sophisticated cyber-attacks. Akamai also plans to establish several cloud computing sites worldwide by the end of 2023 and intends to support underserved cloud developers with basic cloud infrastructure.
Akamai is a leading provider of content delivery network (CDN) services, as its platform handles approximately two trillion web interactions daily. Its solutions help customers address the challenges of bandwidth constraints and Internet traffic while reducing the need for additional hardware to manage traffic loads. Software distribution is important in bolstering the business as the company benefits from rapid growth in Internet-based distribution of applications, operating system software and online game software.
Cybersecurity is an area that holds a lot of promise for Akamai. With the rapid adoption of cloud computing, security has become a major concern for enterprises. Hackers are using new and sophisticated techniques to take advantage of the security loopholes of the cloud. Large enterprises are expected to increase their security budgets to address security concerns and instill confidence in cloud computing. Demand for Akamai’s security solutions will likely translate into significant growth opportunities over the long term.
Shares of the company have lost 33.7% in the past year compared with the industry’s decline of 17.5%.
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Akamai currently carries a Zacks Rank #3 (Hold).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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