Okay. Good morning, everyone. I am Mark Murphy, software analyst with J.P. Morgan. It is a great pleasure to be here with Ed McGowan, who is the CFO of Akamai. First off, Ed, can't thank you enough. It's very generous of you to take the time out of your schedule and be here with us.
Well, happy to be here. Thanks for inviting us.
Yeah. Maybe we could begin... Akamai is a big company, and I'm sure most people have heard of it, but maybe you could kind of give us the 30-second overview, just for the benefit of anyone out there who is more of a generalist.
Yeah, sure. Akamai Technologies, we've been around since 1999. Went public back in October of 1999. About $3.8 billion in revenue, roughly. A very profitable company. We're in three lines of business. We started off in what's called the CDN business, so you probably interact with us many times a day and you don't even know you're doing it. We carry about a third of the world's internet traffic. We make the internet work, basically. We also. Now our largest source of revenue is in security, primarily related to application security. As we're delivering those websites and web applications, we're protecting them from all the bad things that can happen. We also have a smaller but faster growing business with enterprise security, so more traditional IT security. Most recently, our newest area is in the compute business.
Think of that as now you can build your application, you can secure it, and you can run it and deliver it on Akamai.
That's a great overview. That evolution is kind of exactly where I wanted to start. We think back to kind of the very late nineties, Akamai got its start in delivery. You built a very large security business, and I think you just mentioned that it became your biggest business.
That's right. Last quarter.
Last quarter, by revenue. Now you're leaning very heavily, very aggressively into compute as well. Can you help us connect the dots?
Sure.
on, you know. This is the evolution. That's where you're heading. What are the synergies that we should be seeing between delivery, security, and compute?
Yeah, sure. You know, originally we started off solving a problem where, you know, the Internet itself is not built for performance. The general routing protocols don't take performance into consideration. We built this massive overlay network on top of the Internet. We're distributed into over 4,000 locations. We basically put our servers close to where the users are. Where you connect to your local ISP, we have a server that's either in that ISP or very close to it, so that when you request content and it's one of our customers, you get served as close to the end user as possible. The reason for that is, if you think about, there's massive amounts of capacity at your home. A lot of people have fiber to their home. The choke point is the core of the Internet.
By building this distributed platform, we were able to get around that issue and be able to deliver superior performance. It also gives you an enormous amount of scale. You can defend cyberattacks from where they're emanating from and shut them down and not actually bring the data to the data center, and that's the, you know, worst thing you could do. Basically, that first evolution of the business, we became the largest CDN in the world. If you think about the CDN business, there's a lot of synergies with security. First of all, we see every Internet user many times a day. As I mentioned, we're also the largest provider of recursive DNS, which DNS is essentially the on-ramp to the Internet. We have an enormous amount of data. We moved from the CDN business into security.
It was a natural evolution. You leverage the data. You leverage the platform. As I talked about, we handle a lot of denial-of-service attacks, where you have massive amounts of infected devices that will go and attack a site, try to take it down. We can block that site, or that attack, right where the attack is coming from. The same server that might be delivering a video to Mark's home is blocking an attack from his neighbor's house. We're able to leverage that same platform and build the technology that delivers the security as well as the content. For example, one of our largest security offerings is our web application firewall, so it's protecting websites and web applications from all these nefarious things that can happen, someone taking over your site, someone trying to steal information from it.
We deliver those web application firewall rules at the same time we're delivering content, so we don't slow down the performance as we're providing that security. When it comes to compute, we've always been in what's called the edge compute business. What do I mean by that? That essentially is using Java and technologies like that to do things on the Internet, at the edge of the Internet, that are sort of more functions of a service. For example, personalization or image optimization, or maybe you wanna run an A/B test. You're doing advertising. You wanna send, you know, show one group of people an ad and a different group an ad dynamically at the edge, understand which one performed better. Sort of a lighter weight compute, if you will. Maybe it's a waiting room.
You're selling tickets or you've got a big event and people are all coming and you don't wanna overload the login server, you know, at the data center, so you just put a nice screen up with a waiting room and that sort of stuff. Kind of lighter weight stuff. Now we're getting into actually building the application. VMs as a service, Containers as a Service, block storage, et cetera. Competing with the big hyperscalers, that's the next evolution of us.
Okay. That's a fantastic overview. If I asked you this way, what do you perceive as the Kind of secret sauce for Akamai? kind of across all those layers, and segmentations, is there a differentiation in the architecture of the network? Is there differentiated IP or patents? Is it the sheer number of points of presence? Because we're definitely aware
Mm-hmm.
that Akamai kind of eclipses everything else, right, in terms of the points of presence? What is insulating Akamai or kind of making it difficult to replicate?
Yeah, good question. I would say from a technical standpoint, absolutely the architecture. If you think about all the things we talked about, whether you're trying to deliver, you know, a big web event or you're delivering e-commerce experience, performance does matter. The closer you are to the user, the better performance. That has played out over the last 20 years. From a CDN perspective, we are by far the largest. It's also leveraging the technologies that we have and the data that we have and to be able to build out that platform and continue to drive services that have higher margin on top. I think that, you know, that plus the data science, just the amount of information that we have is greater than pretty much anybody out there in the market.
I also think from a business perspective, we have some pretty big moats. What I mean by that is, the CDN business is about scale. We were the first ones to get to massive scale. We're the only profitable CDN out there today. We've been able to build higher margin products on top. We've got a very profitable business model. We've got, you know, great customer relationships. We've got great people. I think it's a combination of all that we were sort of the first ones to figure out that there's some challenges in the CDN market in terms of pricing and things like that.
You have to innovate and continue to stay ahead and find ways to use that scale and synergy, if you will, to continue to build your business and get into higher margin, higher value products.
Okay. There's the architecture, there's the data science, there's the fact that you've got the profitability, kind of embedded into the business model.
That's right.
Okay. If we double-click for a moment on the delivery business, if we look at the contraction there, that has actually moderated a bit, if I look at it for the last two quarters. It was 11%. I tried to put it in constant currency. It was 11% contraction, and then it moved to about 8%-9% contraction. What was interesting was that you pointed to an uptick in traffic late in Q1 and also with more favorable pricing.
That's right.
It felt like there were two good things happening there. Can you help us understand the dynamics that would be kind of driving an improvement in pricing and volume? I mean, should we be... Are we calling a bottom? Is it too early to call a bottom? Is it a local trough, something like that?
Yeah, good question. Always tough to call a bottom in the CDN business. There's always for the 20+ years I've been at the company, traffic has gone up into the right. It's always grown. The internet has grown generally 30% a year or more, and prices have come down. There's a very tight correlation between unit economics, volume, and price, and that has stayed consistent. We had a bit of a super cycle when it came to the delivery business during the pandemic. You had three things happen. You had a pandemic, so people were at home spending a lot more time online.
Right.
You had 4 major OTT services that came out. You also had a console cycle along with sort of a new gaming phenomenon, this multiplayer...
Yeah.
gaming like Fortnite.
It was overheated.
Overheated. We saw massive growth in traffic in 2020. If I was on the stage at the end of 2020, I would say I would expect to see 2021 traffic decline a bit, or at least not grow at the same rate, I should say.
Yeah.
We actually saw a very strong 2021 in terms of traffic.
Mm.
It wasn't until March of last year that we started to see traffic really drop off the growth rate. It's still growing, but at, you know, call it half of what it normally does. We've gotten to the point where we've overlapped that, and we're starting to see our anniversary, that we're starting to see traffic grow again. It's growing a bit faster than it was last year. Not quite what it normally does, but it is an encouraging sign. On the pricing side, and I talked about this several years ago at a, at an event that as volumes start to moderate, pricing declines will moderate. Prices still come down because volumes are still going up, but it's moderating. It's not nearly as bad as the renewals I was doing in 2020.
Mm. Mm.
The challenge with the CDN business is you've got big customers that... The good news for Akamai is we're very, we don't have a lot of customer concentration risk. We only have about eight customers or 10 customers that are 1% of revenue or greater. No customers that are 10%. When those customers all renew, you can have some disruption. You'll always have some variability in the CDN business, especially when you have concentrated renewals with large customers. That's why it's hard to call a bottom. The dynamics in the business are better than they were last year, certainly.
Okay, it's good to hear. What about gaming? It was the first thing you mentioned actually, when you were talking about the pandemic. I know there, over the top is another one I want to come back to.
Yep.
in a moment. Is there something happening in gaming right now that gives you comfort?
Not yet. Gaming is sort of, almost like a fashion, right? It's if you have a popular title, like when Fortnite came out, that was a massive boom for the gaming industry.
Mm-hmm.
You had a lot of me-toos that came out with similar type games. It really is about the development cycle and the popularity of games, and that's not something that we can control.
Okay.
When you start to see, like there wasn't any major releases last year. It was kind of a soft year. That tends to be pretty cyclical. Not calendar cyclical, but cyclical in terms of there's times when there's new games that come out that are really popular and there's lots of them, and there's times when you're in sort of a lull, and we had been in that period. Hopefully, things... I mean, we're due for that to turn around at some point.
Yeah. Okay. Now what if we think about media delivery and e-commerce? The e-commerce obviously went through this major pandemic gyration. You know, it had the spike. You can pull up a stock chart.
Mm-hmm.
Of Shopify and BigCommerce.
Yep.
See that. The Connected TV providers have had some fits and starts as well. What are you seeing behaviorally from... I mean, if you can comment on both of those.
Sure.
I think we're just wondering what is the behavior like if you think across everything Disney+.
Mm-hmm.
Amazon and HBO and TikTok.
Yeah
even Apple. How does that part of it feel?
Yeah. I won't get into individual names, but just sort of at a high level, we'll start with commerce. With commerce, while we had a boom in traffic for the commerce business during the pandemic, we had a lot of economic challenges. One of the things I talked about that I think is a differentiator is our relationship with our customers. We actually worked with our customers, restructured a bunch of contracts. I called all this out on the earnings call, so you can see if you wanna go back and look.
Yep.
We restructured contracts, we extended some payment terms, did sort of the right thing by the customer to maintain that relationship. We get out of that. Things are good. Customers are buying more security, which is great. Security business is growing. Now, we're in a recession. That business is going through another challenging environment just from an economic standpoint. You're starting to see a few bankruptcies pop up and things like that. That business is always really more tied to the economy than anything else. When a good economy, we tend to do better in e-commerce. Bad economy, we tend to do a little bit worse. On the media side, we saw, like I said, a bit of a super cycle. You had four major content releases between the major OTT providers, that just generates an enormous amount of traffic.
what happens is you start to see them go into different countries, right? you start off big launch in the U.S.
Mm.
Europe, you go across Asia, across Latin America. We're seeing some expansion, geographic expansion with the providers. We are starting to see an interesting phenomenon now with a few, we called this out on our last call, that a lot of these providers will go with multiple CDNs, okay? It's fairly easy to build a load balancer that essentially will sign out users as they come to their site.
Mm-hmm.
It can be as sophisticated as measuring performance to as easy as just round robin or just set a percentage. 10% goes to this one.
Mm-hmm.
50% goes to that one.
Mm-hmm.
We're starting to see the number of vendors consolidate because all of us generally will have volume tiered pricing. If you wanna get the lowest unit rate, you consolidate volume, you get the lowest unit rate. We're starting to see a little bit of that, which is a good trend for us because we have the highest performing CDN. We get usually the biggest share in those accounts. That's a positive trend for us. That's also adding to some of the traffic growth.
When did that start happening, actually, a narrowing of the list of CDN providers?
I would say that's been a phenomenon over the last five or six months.
Hmm, interesting. Okay. Just to be clear on this, you're not seeing the e-commerce vector pick up right now?
No.
You're saying that's economically sensitive.
Yeah, it's Really.
It's a little choppy right now.
Yeah, it tends to be seasonal. Q4 is our biggest season, obviously. The impact there is more on pricing. You tend to get more pricing pressure in a downturn than you do-.
Okay
... when things are good. That's more of a, you know, sort of a pricing dynamic issue. This is generally a slow season for your retail e-commerce type customers. Yes, you get graduations, Father's Day, but really the big one is the end of year holiday season.
Okay. How do you feel about the actual network capacity of your global CDN infrastructure? What I mean by that is when we think about this huge growth trend that you have on over the top or the, you know, what we think of as Connected TV...
Mm-hmm
... types of platforms, in online gaming, right?
Yep.
From a long-term perspective, is it more of an opportunity to grow, or is it more of a hurdle in terms of, you know, you have to avoid maybe overloading-?
Mm-hmm
your own network during peak periods?
Yeah, good question. We've actually changed our posture a little bit. There's two things that drive peak. One is a major live event, so big sporting event, think Super Bowl.
Mm-hmm.
you know, election sometimes...
World Cup.
Can be big. World Cup.
Yep.
Exactly. The other one would be a big software update. You know, tens of millions of users need a patch for an OS.
Mm-hmm
... or for a Microsoft patch. Those. Or a game, say Fortnite, a big update fo r that. Those tend to drive your biggest peaks. What we've said is we are no longer going to chase the peaks, and we are now saying no to certain things. It used to be someone would come to me and say, "I have the rights to X, Super Bowl, World Cup. I need Y in capacity." I say, "I'm not going to chase that. I'll give you what I got. This is all I have." Right? And that really is what drives your CapEx. Part of the reason we have changed our posture is we used to grow so fast that the traffic, that is, that if I spent to build out for, say, a World Cup, within a year, I'd be able to fill that in.
Mm.
Now it's taking me longer.
Mm.
It's just simple economics, and we're just saying we're no longer gonna play that game. If you wanna put an update out, maybe it takes you 3 days instead of 1, right? You go to other providers to find it. It's just.
Okay
not economical as it was in the past.
Doing that is helping your margins, right?
Absolutely.
Okay.
Absolutely, yeah.
Maybe we could talk about the enterprise capabilities that you have. We had recently caught up with one of your larger, enterprise customers. He was saying that his firm's usage of Akamai CDN, if you compared it to Cloudflare, was something like 10- 1.
Mm-hmm
... in this case, was talking about a key geography, it was a big country, where the Akamai CDN won on speed. Then he said They win the CDN business, the security piece kinda came along with it.
Mm-hmm.
Right? That you had won both of those pieces.
Yep.
You know, we'll have discussions like that. There is a narrative out there, though, that competitors can come up and perhaps move upmarket and actually compete in the enterprise with you. How would you respond to that kind of an assertion, and what do you view as Akamai's core differentiation?
Yeah.
to these enterprises?
Yeah, it's a good question. It's hard to do. You know, we made the decision early on that we're gonna focus on the top of the pyramid, the enterprise customer. There, the challenges are much greater, the sophistication of the solutions are greater, and it's interesting, the need for services is greater. You know, we hear a lot about self-service ability and things like that, and when it comes to security, what's interesting is, you know, we always decided we weren't gonna go after the small SMB types for the CDN business. The economics just don't work. Churn's too high. Dollar volumes are so low. It just didn't really make sense. We didn't think you could make money there. We focused on the top of the pyramid.
With security, what we found, and we have some examples of customers who have said, "I'm gonna go to a cheaper alternative for security," and they come back. Let's say you're doing bot management. Most of the traffic today on the Internet is not human, it's machine. Understanding the machines that interact with your site is a pretty challenging endeavor. What do you do with it? You got a price-scraping bot. Well, do you want them to scrape the prices? Do you wanna show them a different price list? You have a search bot. Well, that's probably good. You may be in the airline industry, and a bot comes and just reserves all the seats, right? Jacks up the prices in the market. You may have a malicious bot that's doing credential stuffing.
It's got a bunch of usernames and passwords, and it's trying to just keep hitting the site and see if they can get a match, and then take that and sell it off to organized crime. That's pretty sophisticated stuff, and what we find is our customers say, "We want you to manage that, even though you've given us the tools and technology to do that." Same with web application firewall. The threat landscape changes so fast that keeping your firewall rules updated is a lot of work. While you have the tools to do it, we find that people want our expertise. Also, the other thing, too, is we made investments years ago, you talked about outside the U.S.
It's really important to have, especially if you're selling to big enterprises, the local language, local time support, and having people in market to be able to go and see your customers. It's hard to do that. You can do it remotely in the region, but it's hard to do that if you're only US-based. It is possible that someone can try to compete in that area. Competing on price doesn't work necessarily in that world.
Mm-hmm. Mm.
A lot of it's relationship. A lot of it's about having, you know, the trust of your customer. You don't take as many risks with security. We find very few customers that say, "Okay, you know, maybe I'll take a risk on the delivery side," but when it's security, it's very, very different.
Yeah. The risk/reward is different.
Mm-hmm.
Can we talk for a moment about your term Connected Cloud?
Sure.
You've been referring to the platform that way. A continuum of compute from core to edge paired with security and CDN. You have these edge locations, 4,100 plus.
Yep.
More than anyone. The security is pretty robust. You're making investments in compute. Can you describe what the Connected Cloud means?
Sure.
Why are you using that? I think people probably would like to know, well, how does it kinda differentiate versus what you see coming out of. You know, the landscape is gonna include the hyperscalers.
Yep.
It's gonna include Cloudflare and Fastly.
Sure.
Others. How do you differentiate it?
Yeah. Well, I'll start with the last part, with Cloudflare and Fastly. At the beginning of the conversation, I talked a bit about what we did with edge computing. It's been around for a long, long time, and it's where you're doing basic functions as a service. Things that augment the delivery experience. That's effectively what those companies are doing. They also have, I think one of them has an object store. A type of object store is you've got, you know, images and files for delivery. You know, it might be a song or a movie or whatever.
Mm-hmm.
They don't do. You can't build your full stack application. They don't have VMs or containers and whatnot. Don't have block storage. We're getting into that business now. If you think about all the major hyperscalers today, the CDN has become a feature of your cloud business, right? If you think about it, you're building your application in a cloud. You probably have it in a data center or two, and your users are far away from that, so you need to deliver a good experience, right?
Right.
Everybody has to go connect to that location.
Mm-hmm.
A lot of them offer CDN. As a matter of fact, most of our customers, I'd say a high percentage, I don't know exactly, but I'd be willing to bet it's 80% or 90%, use a hyperscaler as their origin. We're pulling from those origins. It's a natural extension to have your CDN as part of a cloud offering. Now, we are not gonna have a full stack compute in 4,000 locations. One of the ways we are gonna differentiate, though, is this year, we're adding about 15 core sites. Those are competitive with your AWS, your Microsoft. They won't be as large. You know, you're talking, call it 1-5 megawatt type facilities. We're also gonna build out several dozens and upwards of hundreds of smaller sites that will be more distributed.
We won't get to thousands. It won't make sense to do that, economically, but we'll get to hundreds. You might say, "Well, okay, why does that matter?" Well, it matters for low latency applications. It also matters... I was talking to a CEO the other day of a customer of ours, and he was saying, "You know, I've got data localization requirements, and there's certain things that I need to run. I just run in containers, so I've never bought any of the lock-in things that you get at, so to say, the hyperscalers. I have requirements that I need to be in said country, and they don't have that offering." That's another opportunity for us to be able to take business where people have data localization.
Mm-hmm.
low latency use cases.
Okay, so 15 of these core larger sites, and then you think it could end up being a couple hundred of the-
Distributed. Think of those as more half a megawatt to a megawatt in size for things like you might be doing, say, autonomous driving or you're using, say, sensors to get information on real-time and do some processing. Heavier weight than what I talked about with, you know, basic functions on your website, but more lighter weight compute than what you would do in a core site.
I mean, should we be thinking of it as basically taking the Linode...
Yes.
-template and pushing it out into those facilities? Okay.
Exactly, yeah. We acquired about 11 facilities. We're building out another 15, so about 26, give or take, big core sites that would be, you know, analogous to what you'd get at a hyperscaler.
When you have built this out, this kinda unique, differentiated stack, which seems like it's pretty well thought out, what are gonna be the best specific use cases?
Sure.
-or workloads that... Where you would say, "Okay, you know, we're well suited to this...
Mm-hmm.
It's not outside of our core, and we're gonna do it better than these other providers?
Yeah. To start off with, media is the most logical, right? We've got a couple of customers. We've got some use cases we've talked about. Think about a social media site that's doing live ingest for uploading content. Well, having that distributed out over a few 100 sites makes a lot of sense. You're gonna get better performance, it's cost effective, et cetera.
Mm-hmm.
Anything that... If you're using, say, your video delivery site, you're doing encoding, transcoding, content management, all that stuff makes a lot of sense to run with someone like us. We're gonna be cheaper than the hyperscalers. We don't compete with them. A lot of companies have used their own proprietary stuff, and they're not locked in. That's where we're gonna be focused. We're gonna be moving to commerce. We're building out more functionality, capacity, and compliance. As you start to tick off things like PCI compliance, it opens up the market to your commerce customers. Your media customers tend to have the lowest requirements from a compliance perspective, it makes sense that they'll be the first ones. They're also the customers that we have.
You know, it's one of our biggest verticals and very trusted relationships with.
Okay. It's actually gonna be a couple of your very largest.
That's right. There's a lot of synergy there.
Super applicable to it.
Yep.
Okay.
To start, we're actually gonna be our first biggest customer, right? I've talked on our calls that we're spending over $100 million with the hyperscalers. We're bringing all of that in-house over the next year and a half. We are gonna be our biggest customer. The use cases there are range from security to running IT applications to you name it.
Yeah. You could price it at a discount to yourself.
Oh, it is so much cheaper. Yeah, absolutely. I mean, we're gonna save a fortune. It is amazing the margins in this space.
Where do you optimally wanna sit? When you think about this Connected Cloud and you think about this build-out that you're getting into, there's a continuum, right? Where on one end of it, you wanna serve the kind of the world's largest websites and apps and games and over-the-top providers. On the other end of the scale, there's this really longer tail of smaller entities.
Yep.
you know, we know you've kind of sat on the one side of that much more historically. Is there interest in trying to expand-
Yeah.
maybe more of a self-serve motion and try to pursue the longer tail? Or is it not is it not economically-
Yeah. You know,
viable or realistic?
Great question. Part of the Linode acquisition was to, one, pick up the capabilities that we need. One of the things that is a little bit different than the CDN market is you need to be very developer-friendly. You need to make it easy, simple to use. You could literally fall into a virtual machine in a matter of minutes if you go to the Linode site. Very simple to do. That's not something that was core to Akamai, right? We're solving big challenging problems with really sophisticated solutions. We needed to get that expertise, so we picked up that expertise. What was amazing is they had a business that was about $100 million accretive immediately, and it was profitable.
While that won't be a primary focus, what happens when we're in the space and we're, you know, getting a bigger presence, advertising, all that stuff, you're gonna get a drag along in that business. We're also adding a lot of features and functionality that accrete to that smaller SMB business as well. While that's not a primary focus, that's a nice growing business. It's very profitable for us. It's very low touch. It's, you know, we've got a ton of synergy with our core network, with our buying power. Colocation costs are very low. We've got one of the largest backbones, one of the big pain points that people have is with egress fees. We're gonna be extremely cheap, if not free, from an egress perspective.
It doesn't cost us anything 'cause we're running a CDN with hundreds of terabits worth of traffic running across it, and the type of traffic that comes off the cloud is much smaller. It's almost like a rounding error for us.
Cheap, if not free, from an egress perspective.
Yes.
Okay. In the time remaining, we've got a few minutes left. Maybe we can try to talk about what you're doing. If we double-click on the, on the compute piece of it, really significant investments in compute.
Mm-hmm.
clearly, the long-term opportunity is there. When we think about compute, you know, for most people in the audience, they would look at compute right now, and they would say they'll think of the hyperscalers.
Yep.
They'll say, "Well, hyperscalers are undergoing this tremendous deceleration right now in their, in their revenue growth. Customers are slowing the investments." In the cloud workloads, they're really optimizing them, right?
Mm-hmm.
They're currently trying to crank it all down and get it all efficient. It's just a world of deceleration. Can you talk us through that opportunity and why are you looking at this and saying, "Well, now is the time to invest in that...
Yeah.
-despite that current environment?
Yeah. Well, I mean, you just described the opportunity. We're hearing from all of our customers that this is their number-one pain point. It's the fastest growing cost in their business. We had that same issue, where we said, "We have to go solve this," and we decided to solve it ourselves and create a business out of it. We've got a huge backlog of customers that are saying, "We wanna move applications to you, to use you multi-cloud." There's customers that are coming to us for that distributed use case. If you think about just the sheer size of that market, you're talking hundreds of billions of dollars still growing at 20%, 30%. We think we can carve out a niche in that market.
We're not gonna be the next AWS, but we think we can carve out a nice business there, generate several billions of dollars over the next couple of years at a very impressive profit. We're gonna disrupt some of that market. Are we gonna be a major thorn in the side of these guys? No. If we double the size of the company, it's only $3+ billion. That's a rounding error to these guys. Yet we have customers telling us that they want us to be in this space. They've been asking us. We've actually done a few things that are a little bit custom. There's an interesting use case where we helped out a big software company with something that they needed to run in hundreds of our locations. We said, "We need to make this a more scalable business for us.
Mm-hmm.
We see the demand, we have our own demand, we think we can do this very profitably, so we're gonna give it a go.
I'm sorry, Did you say you think you can get it to a couple billion in the next several years or...
Yeah, next few years. Yeah, that would be the goal.
And how commonly are you hearing that feedback from companies that are, you know, saying, you know, "Our bill is just too high on AWS, Azure, Google, somewhere else," or having them come to you and saying, you know, "We feel kinda locked in here?
Yeah.
We're not comfortable with the relationship.
Yeah. One of the things we hear commonly is if you have data that moves around a lot on the hyperscalers, you're paying enormous egress fees. Egress is just the data coming out and moving around. Our value proposition is that cost goes away if you come to us. That's one of the big pain points, especially with anyone who has data that's moving around, and there's a lot of companies that have that. You also have the customer that'll come to us and say, "Hey, I just lost the rights to XYZ sporting event that I've had for 20, 30 years. Guess who I lost it to? One of those guys. I'm sick of funding them. I'd rather go with someone else.
Mm-hmm.
They're directly competitive. We're not competitive. There's a niche here that could be a very attractive business for us. Obviously, there's a lot of execution between here and the promised land, but, you know, we're going in with a very informed decision. We're not big risk takers. This is, you know, Tom and I have been working together, he's the CEO, for over 20 years.
Mm-hmm.
We don't take giant risks that are not informed.
Mm-hmm.
We think, you know, 1, we're gonna be customer 1. That's saving us a ton of money. There's a lot of learnings that go along with this. We're gonna bring customers along with us for the journey.
Yeah. It's an informed view and an educated bet.
Yeah.
I think that's a great note to end on, and we're right at the end of the allotted time. Ed, again, I can't thank you enough for taking the time to be with us.
All right. Well, thank you, Mark. Really appreciate it.
Thank you.