Akamai Technologies, Inc. (NASDAQ: AKAM) today announced the company has entered into an agreement to acquire SOASTA, a leader in Digital Performance Management. The acquisition is intended to give Akamai customers greater visibility into the business impact of their website and application optimization strategies. The all-cash transaction is expected to close early in the second quarter.
Online businesses are well aware of the benefits of delivering exceptional digital experiences to their customers. Studies1 have shown that sites and applications need to be fast and reliable to maximize both consumer interaction and business outcomes. For example, nearly 10 percent of visitors will leave a site if response times increase by only one second and nearly 30 percent of visitors will not return to a slow site.
Traditionally, online businesses have found it challenging to generate a holistic view of web site and application performance. Application logic and complexity are moving to the front-end (e.g. browsers, and native mobile applications), limiting the effectiveness of traditional Application Performance Management solutions that are more focused on monitoring IT infrastructure performance as opposed to the real-world experience of actual end users. Increasing investment in, and dependence on, third-party services introduces even greater complexity. SOASTA addresses these challenges with a unified platform for measurement, testing and analysis that delivers performance insights across both technology and business contexts.
“Akamai has long been associated with delivering exceptional technology solutions for optimizing web and mobile application performance,” explained Ash Kulkarni, senior vice president and general manager, Web Performance and Security, Akamai. “The addition of SOASTA’s technology is intended to give our customers new ways to measure, optimize and validate the business impact of their web performance strategies.”
Through its acquisition of SOASTA, Akamai plans to add several new capabilities to its Web Performance Solutions portfolio. Akamai customers will have improved ability to accurately measure how real users experience their applications, and how that experience impacts their behavior. This will help customers prioritize and implement the most impactful performance optimization strategies to positively affect business outcomes. Through SOASTA solutions, Akamai customers will then be able to test optimizations at scale prior to deployment and validate the business impact of those optimizations once they are live in production. The result is a comprehensive set of cloud-based performance and business outcome optimization solutions.
“As important as web and mobile site and application optimization is to online businesses, the ability to truly understand the result of those optimization strategies is crucial to continued success,” stated Tom Lounibos, CEO, Co-founder of SOASTA. “This acquisition will provide Akamai customers, many of whom are already SOASTA customers, with a new way to measure and test the optimizations they are making to their sites, and validate the actual business impact of their site’s performance.”
SOASTA, headquartered in Mountain View, California, is a privately funded company. The closing of the transaction is expected to occur early in the second quarter of 2017. The Company expects the SOASTA acquisition to be slightly dilutive to Akamai’s Non-GAAP net income per share for FY 2017 in the range of $0.06 to $0.07 and to become accretive in 2018.
Additional product and financial information related to the acquisition will be discussed during Akamai’s Investor Summit at the Hilton Boston Logan Hotel, on Thursday, March 30, 2017 from 8:00 a.m. until 1:00 p.m. ET. A live webcast will be available at the Investor Relations page of the Akamai website and an archive of the webcast will be available following the event for a limited period of time.
1 The Performance Beacon, SOASTA, November 28, 2016
Akamai Statement Under the Private Securities Litigation Reform Act
The release contains information about future expectations, plans and prospects of Akamai's management that constitute forward-looking statements for purposes of the safe harbor provisions under The Private Securities Litigation Reform Act of 1995, including statements regarding the expected benefits of the acquisition of SOASTA. Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors including, but not limited to, difficulty in integrating SOASTA’s technology with Akamai's, lack of market acceptance of the post-acquisition solutions, failure of Akamai's network infrastructure, and other factors that are discussed in the Company's Annual Report on Form 10-K, quarterly reports on Form 10-Q, and other documents periodically filed with the SEC.
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