Businessmodel of Limelight Networks

Customer Segments

Limelight has a niche market business model, with a specialized customer segment. The company targets its offerings at emerging and traditional media firms operating in the music, television, newspaper, radio, movie, magazine, software, game, social media industries.

That said, it also does business with enterprises, technology firms, and government entities engaging in digital content delivery. During a typical year, a small number of its clients account for a significant portion of its revenue. In 2015, sales to its top 20 clients accounted for approximately 57% of its overall revenues.

Value Proposition

Limelight offers three primary value propositions: accessibility, convenience, and brand/status.

The company creates accessibility by providing a wide variety of options. It has acquired several companies since its founding, including Kiptronic, a provider of dynamic advertising insertion and device-optimized content delivery solutions; EyeWonder, a provider of interactive digital (rich media) advertising; Delve Networks, a provider of cloud-based analytics and video publishing services; and Clickability, a web content management system. This strategy has greatly expanded its capabilities.

The company offers convenience by making operations simpler for its clients. Its Limelight Orchestrate Platform is an end-to-end solution that handles many tasks, including the following:

• Live and on-demand video streaming for RTMP, HDS, HLS, MSS, and MPEG-DASH
• Automated video transmuxing and transcoding
• Website and web application acceleration
• HTTP2 content caching and delivery
• Distributed cloud-based storage with automatic replication
• Layered security services to protect content and ensure website uptime The company has demonstrated strong performance. It provides policy-controlled cloud replication and storage, with software that enables clients to deliver faster websites (15 terabits per second of egress capacity), responsive web applications, and high quality video for streaming. Also,  its network architecture can support both small files and the large files comprising most current content.

The company has established a strong brand due to its success. It is one of the largest content delivery networks (CDNs) in the world, with over 80 points-of-presence (PoPs**). As of December 2015, it has 963 active clients and a presence in over 56 countries around the world. Its high-profile customers include ABC, Amazon, Apple, BBC, Bell Canada, Ciena, DirecTV, HBO, MLB, Middle East Broadcasting Company (MBC), NBC, NFL, Microsoft, Nintendo, Nissan, QVC, Sony, Walmart, and Yahoo! Lastly, it has won many honors, including the following:

• The Global Business Excellence Award for Outstanding New Product/Service for its SmartPurge near-instant online content removal solution (2016)
• A Webby Award in the Professional Services category (2013)
• Recognition as a“Strong Performer“ in The Forrester Wave: Online Video Platforms Report (2013)
• A Frost & Sullivan award for Product Line Strategy (2012) ### Channels

Limelight’s main channel is its direct sales team, whose members are located in offices across the U.S., EMEA, and Asia-Pacific. The team includes employees in both field sales and telesales. The company promotes its offering through its social media pages, advertising, and participation in webinars, trade shows, summits, and conferences.

Customer Relationships

Limelight’s customer relationship is primarily of a self-service, automated nature. Customers utilize the service through the main platform while having limited interaction with employees. The company’s website features a Customer Support Portal through which clients can access “Self Help User Guides“, diagnostic tools, and troubleshooting resources. The site also has a “Resources” section that includes white papers, solution briefs, case studies, data sheets, infographics, brochures, books, videos, webinars, and market research.

Despite this orientation, there is also a personal assistance component in the form of 24x7x365 phone, e-mail, and live chat support. There is also a community element in the form of a forum.

Key Activities

Limelight’s business model entails maintaining a robust cloud platform for its clients.

Key Partners

Limelight does not maintain a formal partnership program. That said, it forms strategic alliances from time to time in order to enhance its offerings for its clients. Examples include the following:

• In May 2016 Neustar, a provider of real-time information services, announced that it was combining its Distributed Denial of Service (DDoS) solution with Limelight’s CDN to create the world’s largest, most distribued DdoS Mitigation Network and help prevent attacks.
• In April 2014 NeuLion, an online video technology provider, announced it was integrating its TV Everywhere Platform with the Limelight Orchestrate Platform to deliver Over-the-Top (OTT) solutions and enable clients to more quickly monetize their content.
• In May 2013 Qwilt, a provider of video delivery and transparent caching solutions, announced it was partnering with Limelight to develop joint solutions to help service and content providers reduce infrastructure scaling costs while enhancing subscribers’ quality of experience. ### Key Resources

Limelight’s main resource is its proprietary software platform.

It depends on its human resources in the form of engineering employees to maintain and update the platform and customer service staff to provide support.

Furthermore, it places a high priority on intellectual property, with 133 issued patents and 39 pending patent applications in the United States as of December 2015, as well as nine issued patents in other countries.

Cost Structure

Limelight has a cost-driven structure, aiming to minimize expenses through significant automation. Its biggest cost driver is cost of revenue, a variable expense that includes cost of services. Other major drivers are in the areas of sales/marketing and research/development, both fixed costs.

Revenue Streams

Limelight has two revenue streams:

• Subscription Revenues – Revenues generated from subscription fees charged for monthly access to the Limelight Orchestrate Platform. Clients typically sign contracts lasting one year or longer, and must adhere to a minimum monthly level of usage.
• One-Time Fee Revenues – Revenues generated from fees charged for one-time, non-recurring services such as installation and usage fees.