2016: The Year

of the Edge

Q1 Analyst Briefing

Clint HeidenChief Commercial Officer,

EdgeConnex

2016: The Year of the Edge

January 12, 2016

“Adopt the Edge or Prepare to be Disrupted”

#YearOfTheEdge

2016: The Year of the Edge

The Not-So-Hyper-Connected World circa 1970

The Hyper-Connected World or IoT circa 2015è 2B connected individuals with 6B connected

The Ridiculously-Connected World or IoT circa 2020è 8B connected individuals with 75B connected devices

The Internet of Things mandates the Internet of Everywhere circa Todayè The advancement of technology depends on Infrastructure keeping paceè Every company will be valued based on an online relationship within 5 years

è In 10 years 40% of F500 companies will no longer exist - John Chambersè The Message: Evolve or be Disrupted

2

Said Differently: The Years of Core are Over

#YearOfTheEdge

In One Second in 2015….The Volume of Content Created

3

Inonesecondthereis22,574GbofdatacreatedovertheInternet

#YearOfTheEdge

Our Agenda:è Overview (prior page)

è Introductionsè Predictions for 2016 and beyond

è Questions & Answers (submit via chat button)è Follow-up material - electronic and snail-mail

Our Panel:è Moderator: Clint Heiden, CCO, EdgeConneX

è Noam Freedman, SVP Networks & Chief Architect, Akamai

è Guy McCormick, SVP Engineering, Cox Communications

è Peter Neill, SVP Global Product Strategy & Customer Experience, EdgeConneX

è Don MacNeil, CTO, EdgeConneX

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2016: The Year of the EdgePanelist and Agenda

2016: The Year

of the Edge

Q1 Analyst Briefing

Deploying at the Edge

January 12, 2016

Akamai’s Network Deployment Philosophy

Noam FreedmanSenior Vice President, Networks

Akamai Technologies

#YearOfTheEdge

Making the Internet Fast, Reliable and Secure

Akamai is the leading provider of cloud services for delivering, optimizing and securing online

content and business applications.

US BANKS

ALL TOP 10U.S RETAILERS

97 OF THE TOP 100

MEDIA COMPANIES

ALL TOP 30OF THE U.S. MILITARY

ALL BRANCHES

6

#YearOfTheEdge

200,000servers3,100locations1,450networks650cities120countries

Akamai’s Planetary Scale Platform

7

#YearOfTheEdge

Akamai’s Network Deployment Philosophy

To meet the performance, reliability,

security and scalability needs of our

global customers, we must deploy deep within end-user networks.

8

#YearOfTheEdge

Why Deployments in End-User Networks?

0%10%20%30%40%50%60%70%80%90%100%

1 10 100 1000 10000

Cumulative%GlobalTraffic

NumberofNetworks

9

#YearOfTheEdge

Why Deployments in End-User Networks?

0%10%20%30%40%50%60%70%80%90%100%

1 10 100 1000 10000

Cumulative%GlobalTraffic

NumberofNetworks

600

90%

10

#YearOfTheEdge

Offload traffic from peering limitations

Reduce costs for Network Operators

Improve performance and scalability

Minimize the “unprotected” paths

Why Deep Deployments?

11

2016: The Year

of the Edge

Q1 Analyst Briefing

The Growth of Network Traffic..

January 12th 2016

..And the Impact of Localization

Guy McCormickSVP of Engineering,

Cox Communications

#YearOfTheEdge

Cox Communications

About Cox CommunicationsCox Communications is a broadband communications and entertainment company, providing advanced digital video, Internet, telephone and home security and automation services over its own nationwide IP network. The

third-largest U.S. cable TV company, Cox serves approximately 6 million residences and businesses. Cox Business is a facilities-based provider of voice, video and data solutions for commercial customers, and Cox

Media is a full-service provider of national and local cable spot and digital media advertising. Cox is known for its pioneering efforts in cable telephone and commercial services, industry-leading customer care and its outstanding workplaces. For eight years, Cox has been recognized as the top operator for women by Women in Cable

Telecommunications; Cox has ranked among DiversityInc's Top 50 Companies for Diversity 10 times, including the last nine years. More information about Cox Communications, a wholly owned subsidiary of Cox Enterprises, is

available at www.cox.com and www.coxmedia.com.

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0

1000

2000

3000

4000

5000

6000

7000

8000

9000 FORECASTED

Today

Loca

lize

d vs

. Bac

khau

led

Net

wor

k Tr

affi

c

Localized Traffic

Backhauled Traffic

46%

54%

58%

42%

Cox Network Growth – Traffic & Localization Impact42% of Cox Internet traffic is now delivered locally, providing financial efficiencies, network reliability, and improved customer experience. This number is expected to rise to 46% by EoY 2016.

§ Today, 42% of Cox internet traffic is currently localized in six major markets.

§ Through 2016, the prediction is that localized traffic will grow at 55%, and backhauled traffic will grow at 50%.

§ Barring any major, unforeseen changes, Cox predicts the traffic growth in 2016 to be consistent to historical trends.

§ Anticipating Netflix encoding advances will reduce the bandwidth of existing content by 10-15% but quickly consumed by ABR and 4K

§ The combination of Netflix, Akamai, and Google will continue to be 65-70% of all Internet traffic.

§ Cox expects to see Apple and Amazon gain popularity, and bandwidth share, in 2016.

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2016: The Year

of the Edge

Q1 Analyst Briefing

Measuring the Impacts

of Localization

January 12 2016Peter NeillSVP, Global Product Strategy,

EdgeConneX

#YearOfTheEdge

§ Estimates that 100 ms increase in load time can decrease sales 1%

§ Increasing from 10 to 30 search results, increased the average page load time from 0.4 seconds to 0.9 seconds. This in turn, reduced traffic and ad revenue by 20%

§ A second median latency increase = 15% engagement drop and 5% bounce rate increase

§ Facebook pages that are 500ms slower result in a 3% drop-off in traffic

§ 1 second delay in Bing result, results in 2.8% drop in revenue, 2 seconds equals drop of 4.3%

§ If Yahoo increased page load times by +400ms they see a 5% - 9% drop in full-page trafficWeb

site

Per

form

ance

B

usin

ess

Impa

cts

Amazon

§ Researchers have determined that each 1 second video delay results in ~6% increase in abandonment rate

§ Minutes of video watched by consumer is negatively correlated with buffering. In 2014 a 1% increase in buffering time reduced video watched by 14 minutes

§ If an audience perceives video quality as “poor,” 92% of audience will stop watching before program is over. 75% of the audience will stop watching within the first 5 minutesV

ideo

Qua

lity

Use

r Im

pact

s

§ Studies of web page load times showing significant performance improvements (9-15%) or ~150 ms in two ECX markets across two unique content providers

§ Studied video delivery in single metro area to test the delivery of content before and after localization. Results clearly showed 11-17% lower buffering ratio for publishers prior to and after EdgeConneX solution was implemented. In fact, content delivered using a different ISP in the same metro area without localization had 2% higher re-buffering of the same content

Edg

eCon

neX

R

esul

ts to

Dat

e

Localizing “Services” Drives Substantial Improvement

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#YearOfTheEdge

Validates Edge Performance Improvement

Impacts of Localization on Web Performance

0

500

1000

0400800

120016002000

§ Search engine site measured in Norfolk, VA

§ Sam Knows measured an average page load time reduction of ~150 ms or 15.4% improvement

15.4% Decline

9.2% Decline

Page l

oad tim

e (

ms)

Page l

oad tim

e (

ms)

§ E-Commerce site measured in San Diego, CA

§ Sam Knows measured an average page load time reduction of ~150 ms or 9.2% improvement

E-Commerce Site

9.2% Improvement

Search Engine Site

15.4% Improvement

100msdelayinpageloadtimescanimpactsalesby1%(AmazonQuote)

WithWithout

Without With

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#YearOfTheEdge

Top 120K video views: Akamai Customer A

Cox – San Diego

11%Re-buffer rate improvement

ISP 2 - San Diego

2%Re-buffer rate

increased

Validates Edge Performance ImprovementImpacts of Localization on Video Performance

WithoutWith

Top 120K video views: Akamai Customer B

Cox - San Diego

17%Re-buffer rate improvement

ISP 2 - San Diego

2%Re-buffer rate

increased

WithoutWith

November ‘15 Whitepaper Results

§ Improvements driven by ISP’s connecting to local content in EdgeConneX facilities

§ ISPs & CDNs peering at the Edge will benefit significantly (Cost to Provide Service and User Experience)

§ Results include higher viewing/engagement (CE & Advertising $), less abandonment (CE & Churn), and higher customer satisfaction (CE & Retention)

-3

-8

-11

-14

2011 2012 2013 2014

Engagement Reduction (minutes) With 1% Increase in Buffering

33.6%

VERYUNLIKELY

24.8%

UNLIKELY

24.6%

UNCHANGED

86%CHURN

RISK

6.6%VERY LIKELY

8%LIKELY

How Likely Are You To Watch From That Same Provider

Again?

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#YearOfTheEdge

Available and Potential NA Locations

Madison

Denver

Salt Lake City

Las Vegas

PhoenixSan Diego

Sacramento

Portland

Seattle

Minneapolis

Houston

Miami

Jacksonville

Tallahassee

Richmond

Norfolk

Pittsburgh

Boston

Detroit

Nashville

Memphis

Santa

Clara

Data Center Locations

Coming Soon

Under Consideration

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#YearOfTheEdge

Netherlands(Amsterdam)

France(Marseille)

Italy(Milan)

Germany

Austria(Vienna)

Romania

Turkey

Finland(Helsinki)

PolandUnited Kingdom

(London, Birmingham, Manchester, Leeds, Glasgow, Liverpool)

Available and Potential EMEA Locations

Data Center Locations

Coming Soon

Under Consideration

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#YearOfTheEdge

The Edge Goes GlobalExtend Footprint Beyond the Traditional Peering Hubs

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2016: The Year

of the Edge

Q1 Analyst Briefing

Edge Drivers & Implications

January 12 2016Don MacNeilChief Technology Officer,

EdgeConneX

#YearOfTheEdge

2016: The Year of the Edge

Enabling Digital Transformation and the Internet of Everywhere

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Cloud

IoT

Traffic

Content

Devices

Security

DigitalTransformation

• Through 2015, at least 50% of cloud deployments

will suffer from business-impacting performance issues, requiring extensive network redesign to

address them (Gartner)

• 67% say security concerns are a top challenge to

implementing their cloud strategy (IDG)

• By 2019, global data center traffic will reach 10.4 zettabytes per year

• By 2019, 4 out of 5 data center workloads will be

processed in the cloud

• 83% of Data Center Traffic Growth from Cloud;

Representing over 8 Zbs (Cisco);

• By 2018, at least Half of IT spending will be Cloud

Based, Reaching 60% of all IT Infrastructure…by

2020 (IDC);

• Some 30 billion devices will be connected by 2020

• Driving the development of 200,000 New IoT Apps and Services (McKinsey & IDC);

• It is estimated that only 0.5% of data is being

analyzed (GE-IDC);

Gaming

• Globally, IP video will represent 80% of all traffic

by 2019

• Internet video to TV grew 47 % in 2014;

• 13x Growth in mobile video traffic b/n 2013 &

2019 (Cisco)

• Whereas Internet traffic was once broadly

distributed across thousands of companies, by 2009 half of all Internet traffic originated in less

than 150 large content and content distribution

companies. By May of 2014, this number had

dropped by a factor of five. Today, just 30

companies, including Netflix and Google, contribute on average more than one half of all

Internet traffic in the United States during prime

time hours. (Deepfield)

• Twitch, an online video game site, ranks 4th in

terms of Peak US Internet traffic, ahead of Hulu, Amazon and Facebook (Deepfield)

Content TrendsLatency

Cloud Trends

KeyRequirements

1.Location/Proximity2.HighPowerDensity3.Connectivity

#YearOfTheEdge

More Users, More Devices, More Applications & More Content

Accelerates Zettabyte Era• By 2020, there will be nearly

3.9 billion global Internet users

(more than 51% of the world’s

population)

• By 2019, there will be 24

billion networked devices and connections globally

• Globally, the average fixed

broadband connection speed

will increase 2.2x to 42.5

Mbps by 2019• Globally, IP video will

represent 80% of all traffic by

2019

#YearOfTheEdge

Rapid Cloud Adoption Drives Architectural Evolution

EdgeConneX Helps Brings the Cloud and IoT to the Enterprise with Distributed Architecture

50+Local CloudHubsCloudarchitecturebecomesmoredistributed

EdgeGoes Global: Local CloudHubsFewKeyCloud Hubs(MajorDataCenterMarkets)

Alltrafficisbroughttooneofthesepoints

Exchange facilities are legacyNSFNETexchangepoints IXPsarerunbycarrier-neutraldatacenteroperators Localdatacentersarerunbyspecialized edgeoperators

PeeringPoint

Phase12010– 2015

PhasesintheEvolutionoftheInternet

Phase22016- 2020

Phase3Global

RapidlyGrowingDataCenterTraffic DrivenLargelybyCloud Problem• Latency:CloudApplicationPerformance• Compliance:DataSovereignty• Redundancy:BC/DR• Flexible:HybridCloudSolutions

Solution• Deployattheedge…asclose toenterprisesaspossible

• Distributedarchitectureallowsforredundancyandlocaldatarequirements

• ScalablesolutionswithinfacilitytosupportbothCSPandEnterprisedeployments

EdgeConneX• BuildsCloudEcosystemsattheEdgeincloseproximitytoEnterprises

• CloudcomestotheEnterprise;OptimalalternativetoformeronpremisedatacenterforEnterprises;

#YearOfTheEdge

Why Cloud Needs to Move to the EdgeApplication Performance: Quantifying the Impact of Latency and Localization

• Streamingbasicvideoandmusic• Textcommunications• Voiceover IP• WebBrowsing• Webconferencing• Cloudbasedlearningmanagement

systems

• SaaSsolutions:ERP&CRM• HDvideostreaming• SDvideoconferencing• Webelectronichealthrecords• VoiceoverLTE• Personalcontentlocker

• Telemedicine• HDvideoconferencing• UltraHDvideostreaming• Virtualoffices• Hi-frequencystocktrading• Connectedvehiclessafety

applications

Source:CiscoGCI,2015

#YearOfTheEdge

IoT Further Accelerates the Need for the EdgeEnabling the Industrial Internet

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WHAT HAPPENED WHEN1B PEOPLE

BECAME CONNECTED

Entertainment was DigitizedSocial Marketing Emerged

CommunicationsMobilized

IT Architecture was VirtualizedRetail & Ad Transformed

WHAT HAPPENES WHEN75B DEVICES

BECOME CONNECTED

IT is VirtualizedAnalytics become predictive

Machines are self healing & automatedMonitoring and maintenance is

MobilizedEmployees increase productivity

2016: The Year

of the Edge

Q1 Analyst Briefing

Wrap-Up and Q&A

Clint HeidenChief Commercial Office,

EdgeConneX

#YearOfTheEdge

PredictionsIn 2020 We Will Experience the Following Phenomena's

29

Welcome to 2016

Welcome to the Year of the Edge!

30

#YearOfTheEdge

Q1 Analyst Briefing