Akamai To Acquire Linode

I got an email that Akamai is planning on acquiring Linode for $900M, L1T’s beloved sponsor.

I’ve been using Linode for several years to host a minecraft server and an email server. The $100 referral credit from L1T seems like an arbitrage opportunity, although I am already a current customer for several years. I have to admit that I fall asleep at night trying to find some ethical loophole that will allow me to take advantage of the credit.


I got as far as where the press release said “metaverse”, and then closed the tab. :unamused:

Not a huge fan of Akamai. Maybe they won’t screw it up? I guess we’ll see.


Have been using Linode over a decade. They have been doing amazing things for longer than that, and their trajectory has been nothing but steadily upward. I have a hard time seeing how Akamai really brings anything to the table here to make Linode better than they already are. This smells to me like Chris wanted to get out and a sale was the easiest way. I’m dubious to say the least.


Listened to some of the Akami call; so it’s a $900M cash purchase, with an expected 2022 revenue addition of $100M. That’s a 9x revenue valuation, pretty high in this market, unless Linode was growing at 40% y.o.y.!

But then again Akami had 0% growth over the fiscal year for the CDN service, and only 25% growth in security, which is 39% of revenue, so … kinda had to buy something.

If Chris leaves, in a year, Akamai will probably screw it up and kill the growth. It was disappointing not see him at least be given a potemkin title.


I dunno in most cases acquisitions don’t work out well for similarly sized companies. See any videos from this guy. The ones that go well are substantially bigger.

Do you know what Linode’s YOY growth is? Can’t be 40%.

The initial 40% was a guestimate based on how we value companies; usually the revenue multiple is 6.5 * growth rate, so 9/6.5 = ~1.4 or 40%.

I just read the call transcript and JP Morgan had the first question and the same question. The CFO was cagey, but essentially confirmed that 40% number. Essentially pre-acquisition Akamai had a projected growth rate of 15%, but post-acquisition they’re projecting at 30%-35% on aggregate.

However later on, in response to the question from Cowen and Company, the CEO let it slip that Linode was doing 15% growth before. He then goes on to trash Linode by blaming the growth number on not having a proper sales force, and to expect growth to spike to 30% by pushing Linode through Akamai’s enterprise sales force.

At which point Linode basically takes over the call, and all the bankers get concerned about Akamai pushing Linode to the enterprise and ignoring the coders and “downmarket” customers.

It also sounds like Chris will be out by Q1-end, so April, and Adam, the Akamai COO is taking over most of the heavy lifting at Linode.

For anyone interested, the call transcript is finally up, and slides are available on the Akamai IR website:

For those curious, the base revenue multiplier for tech valuations is usually between 6.5x-9x depending on a variety of factors such as CapEx ratio, CAC, and net margin. Usually capital intensive businesses, like hosting, are lower close to 6.5 and high margin businesses, like Uber or Airbnb, are higher close to 9.


If they fuck it up I’ll just go back to Digital Ocean.


Yeah I’ve got all my configs backed up. Wouldn’t be hard to move to vultr or do

I’ve never used Vultr, how are they?

Well they are part of the big 3. Ultimately mostly the same. Less automated with apps and stuff. More about just the VMs

I’ve never used vultr or digital ocean, but I think vultr and linode are unique in that you can use your own OS if you wanted to. You don’t have to use their pre-packaged images.

This probably is not a huge selling point for a lot of people, but it is very easy on linode. I haven’t tried it on vultr.

Yeah it seems a bit niche considering the trend to move away from Golden Images and just configure everything post OS bootstrap with build tools.

I have been on linode of maybe two years or more (Kid Vid time warp), but this makes me cry. I have known about Linode for a long time but had not been in the position to pay someone else to host my stuff out there until recently. What are the alternatives out there. I know that there is a German company out there is very similar to Linode. Rene Rebe uses them for the T2SDE hosting stuff.

As a US American, what are the implications of hosting my stuff in the EU?

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There is Hetzner that derba8ur has an affiliate with. He even did a video on the facility itself and it’s actually a marvelous place. They are or have added US based servers to the system, not sure which it is. Might check them out.

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I’m not sure things will change that fast. I don’t have any plans yet to migrate anything just yet. I think the acquisition still might have to pass regulatory scrutiny, although there don’t seem to be any glaring issues, like the ARM/Nvidia attempt.

I think for alternatives, off the top of my head, in no particular order, is vultr, digital ocean, hetzner (now with a US footprint), OVH. There might be others and this is not a recommendation/endorsement. I’ve looked at the bigger players (AWS, google cloud, etc) and the product offering is too confusing for me. I don’t need that many buzzwords.

For context, I host a private email server on linode. I used to have a minecraft server, but as the number of worlds got larger, it was more practical to host the MC server at home. I’m not doing anything fancy, sensitive, or profit generating.

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My experiences with Linode have been positive while my experiences with Akamai have been negative.


vultr is offering a $150 credit to try to win over linode customers…

Not unique, most cloud providers let you do this on their VMs. The amount of documentation varies. (e.g. gcp)

You’re less protected from your own government but gain some protections from the EU government.

99.99% of cases, you should worry more about cost (dirty us coal is cheap) and latency (cross Atlantic fiber is both slow and expensive), than legalese.


If you are only hosting personal projects then I don’t think there’s huge difference. GDPR is probably the biggest change in terms or legislation.

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