Startups

Linode’s $900M acquisition by Akamai is a ‘game changer’ for cloud service providers

The Old City company will maintain its brand and employees under the deal, which is expected to close before the end of this quarter. Here's what it means for the industry, and Philly.

Linode CEO Chris Aker outside Linode's Old City office, December 2015.

(Photo by Jeremy Messler)

Linode, the nearly 20-year-old cloud software company that’s made itself a household name in the Philly tech scene, will be acquired by Akamai Technologies.

CEO Christopher Aker founded the company in 2003, and it’s been bootstrapped ever since, growing to about 250 employees in 2022. The company, which provides open-source cloud service capabilities to a wide range of clients, will keep all its employees and its brand name under the $900 million deal, which is expected to close before the end of the quarter, VP of Cloud Experience Blair Lyon told Technical.ly on Wednesday.

Linode provides services similar to huge names like AWS or Google Cloud Services. Its acquisition by Cambridge, Massachusetts-based Akamai merges Linode’s developer-friendly cloud computing capabilities with Akamai’s edge platform and security services.

“Akamai has been a pioneer in the edge computing business for over 20 years, and today we are excited to begin a new chapter in our evolution by creating a unique cloud platform to build, run and secure applications from the cloud to the edge,” said Tom Leighton, CEO and cofounder of Akamai, in a statement Tuesday. “This is a big win for developers who will now be able to build applications on a platform that delivers unprecedented scale, reach, performance, reliability and security.​”

In a statement, Aker said the deal brings the company closer to solving evolving challenges “as cloud services become all-encompassing, including compute, storage, security and delivery from core to edge.”

"It's a game changer for us, and it's a big impact for Philadelphia that we now have a real serious threat to competitors here at home."
Blair Lyon, Linode

“We’ve been working really hard [toward] that idea that ‘one cloud to rule them all’ is a really bad thing, and choice is a really good thing,” Lyon said of Linode. “So we’ve been talking about ‘alternative cloud’ — alternative to the big guy — and now we’ve sort of validated ourself in this market and created another tier: pure-play cloud-to-edge infrastructure computing that competes with AWS and Google.”

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Aker has owned 100% of Linode since he founded it, and Lyon said it was going to take essentially “the perfect deal” to change that. The deal happened relatively quickly, although there wasn’t urgency to do so, since the company is “highly profitable” on its own.

“We’ve been doing this for 19 years, and we’re used to doing it on our own,” the VP said.

But the team had been exploring how it might hit a broader market, and determined it would need more security and capabilities to do so. Both Linode and Akamai were very early to their respective markets in the late 1990s and early 2000s, and by partnering, they create an end-to-end solution, Lyon said: “It’s almost magical that it makes so much common sense.”

The Old City company maintains “well over a million accounts” but has anywhere around 150,000 active users of its platform at any particular time. Linode’s HQ, the bank building at Third and Arch Streets, remains, and will essentially become an outpost to grow computing capabilities, Lyon said. Its leaders see some local hiring coming down the pipeline.

Akamai has acquired and maintains other companies in its portfolio that have continued operating independently. For clients and Linode employees, there won’t be too much noticeable change, Lyon said — they’re keeping very focused on the same goal, but now paired with a company that fills out end-to-end cloud services.

“Our main goal is to provide great cloud capabilities, and that’s all we do. And we can do that at best-in-class scale, with services of all ranges for the market,” Lyon said. “It’s a game changer for us, and it’s a big impact for Philadelphia that we now have a real serious threat to competitors here at home.”

Companies: Linode
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