Part 2 - The CDN Survival Guide

Though Rayburn said Akamai was facing pricing pressure from upstarts, Tim Napoleon, chief of strategy for digital media for Akamai, said seasonality was more to blame for the company's flat revenue. He also noted that the move by major content players toward HD online video, which needs larger files that cost more to deliver, would offset any revenue pressure from upstart competitors driving the price down.

"We haven't seen any deterioration in the customer base, and we've been very aggressive, as we've shipped more than 10,000 servers over the last quarter for deployment in the cores of ISPs," Napoleon said. "We've also found more efficiency in our software, and we then pass the savings on to our customers. We're excited to take the digital pennies Jeff Zucker has talked about to digital dollars and realize the vision of really monetizing video content online."

Napoleon said Akamai is excited to see consumer behavior continuing to trend toward online video consumption, and he added that the company would continue to invest heavily in improving video quality and its analytics package.

Akamai's closest competitor, Limelight Networks, only added five net customers in the second quarter and its revenues barely budged. But Chief Strategy Officer Mike Gordon echoed Lunsford's refrain that the company had to cut some poor credit customers and said he sees no cause for concern, given the positive trends in video-capable device adoption and overall video consumption.

Gordon said he expects growth in video delivery to be driven by continued proliferation of connected devices, continued uptake of higher bitrate video, and adoption of smartphones such as the Apple iPhone.

"I don't think any of those are going to be any great breakout, but as we help our customers solve their business and operational challenges as they move online, all of these trends together make me think there is a lot of growth ahead," Gordon said. "There is a tremendous opportunity in devices, and many CDNs have not leveraged that yet. The global macroeconomic situation will continue to be difficult, and we're not yet at a time where growth is surging, but traffic is clearly growing. People are still using the internet every day, and user adoption of long form video, internet connected TVs, and smartphones will continue to grow year-over-year."

Limelight has invested heavily in preparing its network and software for mobile video delivery, and its purchase of mobile advertising company Kiptronic furthered its move into mobile video delivery and monetization solutions.

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