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Akamai officials insisted that our meeting begin with a visit to the NOC. We've been in our share of data centers over the years, so the display of lights, while pretty, was not especially exciting. What we heard from the provider's operations manager caught our attention, though. The ability to continuously monitor the Internet's functional status, then detect where user requests are made and route them to the nearest, fastest server connection is fundamental to Akamai Technologies' cached content-delivery scheme.

Our guide at Akamai, Stephanie Viselli, manager of vendor relations, told us that the information gathered in the NOC lets the company bypass congestion before most ISPs are even aware there's trouble on their backbones. We've never heard another company claim this ability to decipher, then optimize, network traffic in real time.

Indeed, the company's swagger flows from the top: "While our competitors are still trying to deal with last year's challenge, the delivery of individual objects from distributed locations, Akamai has changed the game with EdgeSuite, which today offers the ability to deliver dynamic content and whole pages from the world's largest and most distributed edge network," Paul Sagan, Akamai's president, says.

Get Back

In 1995, Tim Berners-Lee, one of the creators of the World Wide Web, foresaw a problem: How can congestion be prevented when masses of users try to access the same data at the same time? Remember the Victoria's Secret live Webcast fiasco in which the retailer's Web site was overwhelmed during an online fashion show?

Even the Web sites of companies with robust, powerful systems can be brought to their knees. One solution: a pool of bandwidth that can be allocated to cover transient traffic peaks.

In response, Akamai and other service providers began to offer enterprises CDNs (content-delivery networks) with distributed, scalable cache to respond to these peaks. These providers also eased day-to-day delivery of Internet content by shifting information from corporate customers' origin servers to cache servers around the globe. Moving Web content to the edges of the network places pages closer to users, speeding access. Data fetches no longer have to traverse the breadth of the Internet to bring content from an origin server in Boston to a browser in Hong Kong.

Akamai has crowned itself king of content-delivery service providers, claiming 75 percent of the world market. The company now supports nearly 10,000 servers, deployed in more than 60 countries worldwide and across hundreds of networks, and has assembled an extensive customer list, including CNN, Nasdaq and Adobe Systems. (You can compare the service offerings of CDNs from Akamai, Cidera, Digital Island and iBeam at www.nwc.com/compareit/comp-cdn.html.)

Business Health

Many pure-play Internet businesses have perished in the past year, cutting a swath through Akamai's customer base, and the carnage continues with the recent bankruptcy filing by PSINet, which was once a premier global hosting firm.

Akamai itself, another darling during the great bull market, has seen its stock price tumble from $132 per share to as low as $5.50, settling at around $10 at press time. While the company is still posting losses, for the three months ended in March, revenues were $40.2 million, up from $7.2 million in March 2000, and its goal is to be EBITDA (earnings before interest, taxes, depreciation and amortization) positive as of the second quarter of 2002.

How do we know this? By the dozens of posters plastered all over Akamai's business-development offices that say, in big block letters, "EBITDA 2Q 2002." It's an admirable goal, but the company has a ways to go: EBITDA losses for the first quarter were $36.5 million, a reduction from $45.1 million a year ago but still a big chunk of change.

This not-so-subtle profitability message is directed at a largely young, casual work force. Button-down shirts were worn by a few, but there was nary a suit and tie in evidence during our visit. Akamai has about 1,100 employees worldwide, with about a third in software engineering. Apparently taking inspiration from those who have probed the unknown, Akamai romantically named its conference rooms for famous explorers and astronauts, including John Glenn.

Officials scoffed at the suggestion that Akamai is angling for a suitor, saying the business plan has always called for independence. Good thing, because the current capital markets are dicey, and we see caution cooling the merger fervor: Witness the recent breakdown in talks between Lucent Technologies and Alcatel.

So where will growth come from? First, acquisitions. Akamai's strategy: Be selective. For example, Network24 Communications was wooed for its streaming application, now a core part of Akamai's Interactive Forum product; InterVu was purchased for its streaming audio, video and conferencing applications; and CallTheShots was drawn into Akamai's sights by the allure of its engineering talent in a tight job market.

Plus, Akamai says it gets lots of bang for its buck.

"It's important to understand that the capital expenditures associated with building our global network are very low compared to network providers and hosting firms that must sink major amounts into large physical plants," Sagan says. He likens Akamai's build-out costs to those of a software company, where up-front R&D support is pricey but yields a very high return on lower capital investments.

When asked about Cable & Wireless' $340 million acquisition of Digital Island, Akamai officials said the pact will have little effect on the competitive landscape. In fact, Robert O. Ball III, Akamai's vice president of business development, characterized the deal as little more than an attempt by C&W "to acquire a hosting presence along with their content delivery." In fact, Ball called C&W an important partner.

Eric Dorsch, vice president of global Web hosting at Cable & Wireless, has a different spin. "In terms of the relationship with Akamai, Cable & Wireless hosts Akamai servers in its network nodes," Dorsch says. But "by combining Digital Island's market-leading CDN service and hosting solutions with Cable & Wireless' global IP network and services, Cable & Wireless becomes the first company on a truly global scale that can offer complete, end-to-end e-business solutions delivered over its own infrastructure from the content origin to the edge of the network."

Most analysts consider marriages like those of C&W and Digital Island, NTT Communications and Verio, and WorldCom and Digex good news for enterprises. Why? The life expectancy of specialized providers is uncertain, and when it comes to enterprise service providers, uncertainty is scary.

"Akamai, as one of the leaders in the CDN space, can get away without a suitor for now, but as the competition heats up, it will be harder for the company to compete," says Counse Broders, a senior Internet services analyst with the market-research company Current Analysis. "The challenge is for Akamai to continue to grow and support a range of clients."