We may live in a hyper-fast world… but package delivery still takes time.
And most of that time comes from what logisticians call “the last mile.”
In a product’s journey, the “last mile” is the final step of the process… for example, from a local Amazon warehouse to your doorstep. It’s the most expensive and time-consuming part of just about any shipping process.
The telecommunications, cable TV, and internet industries also have last-mile issues in getting their products from their networks to our at-home devices.
It’s an issue that — most of the time — we consumers don’t notice. But thanks to 5G, those tech last-mile problems are about to get a lot tougher to solve.
As we’ve been discussing here, 5G represents a brand-new “information highway” that is 100 times faster than the one we use today. 5G provides the foundation for a whole host of “gee-whiz” technologies like autonomous vehicles, telemedicine and remote robotic surgeries, “smart” factories and home, and the Internet of Things (IoT).
But we can’t get all that “gee-whiz” if the telecom “last miles” into our homes, hospitals, vehicles, and factories can’t handle all that 5G data.
That’s where a technology known as “content delivery networks (CDNs)” comes in.
CDNs are geographically distributed collections of servers that work together to provide fast delivery of internet content. They’re like a network of data “minimarts” that operate closer to end users than the large web-hosting data warehouses known as “data centers.”
These minimarts don’t deliver everything you’d ever need, just everything you need right now.
A CDN does not host content like a data center, and it can’t replace the need for proper web hosting. Instead, it caches content at the network edge, which enables the quick transfer of data like streaming video and applications.
This “edge computing” takes place at or near the physical location of either the user or the source of the data.
In other words, the “edge” is the part of the internet that’s closest to end users. It’s the “last mile.” The edge sits between the cloud data centers at the core of the internet and the billions of devices that are in homes, offices, and mobile networks.
Here’s the thing.
Just like we depend on Ring security cameras — or nosy neighbors — to protect our doorsteps from package thieves, we also need security at the edge to protect us from cybercriminals.
So today, let’s talk about the importance of edge computing security.
Then, I’ll tell you a little bit about a company that is, by reputation, the world’s premier CDN provider.
But behind the scenes, it is becoming one of the world’s leading cloud-security firms.
Keeping the Edge Secure
Data speed and data security have become inseparable processes. It used to be that CDNs could focus on delivering content, while devoting minimal attention to IT security.
But times — and technologies — have changed. Data delivery and data security have become inseparably linked.
Think of CDNs as a kind of local bank. Back in the “olden days,” most neighborhood banks operated with wide-open doors and no security of any kind.
Although bank robberies posed a legitimate threat, they occurred so infrequently that very few banks would bother with expensive security measures like hiring armed guards.
But as robberies increased over time, so did the imperative to boost security in various ways. That’s why most neighborhood banks utilize basic security protocols like installing cameras and holding as little cash as necessary outside the vault.
Now, let’s imagine that local banks started facing threats that were both more intense and more frequent.
Let’s imagine that would-be robbers were trying to breach the bank’s defenses every single day — by bursting through the door with armed robots and drones, tunneling under the vault, hacking into money transfer systems, impersonating Brink’s security personnel, or everything at once.
Suddenly, your local savings and loan is no longer that folksy place where you sit down with a pleasant teller to decide if your personal checks should carry images of puppy dogs or kitty cats.
It is now a fortress.
Fail-safe security becomes paramount… just as it has become for CDNs and edge computing.
And the more that businesses and individuals migrate their technological lives to the cloud — and the more data that 5G enables us to put there — the greater the imperative to secure the data and apps that reside there.
For example, as the global workforce becomes more distributed and more employees work from home, demand for cloud-based security systems grows.
The concept/origin of edge computing goes back to the 1990s but has picked up more steam over the last decade.
Now, let’s take a look at an edge computing security company that has embarked on a new trajectory of long-term growth — growth that the 5G rollout could accelerate faster than most investors currently expect.
A 5G Boost
The company was one of the infamous boom-bust stocks of the dot.com era 20 years ago — and that storied history has laid the foundation for what could become an impressive tale of future success.
Its edge platform is the largest cloud delivery platform in the world. Because its CDN serves more than 900 cities in 135 countries, it carries about 30% of the entire world’s internet traffic.
The large majority of this company’s CDN revenue comes from its edge delivery solutions, which process video streaming and software downloads.
This business is certain to continue growing, as 5G technology boosts data demand across numerous applications and end uses.
More importantly, the company’s dominant and steadily growing CDN platform provides a solid foundation for its cloud security business.
Data speed and data security have become inseparable processes. That’s why its cybersecurity division has been growing so rapidly that it now accounts for one third of the entire company’s revenues.
In effect, this is a fast-growing cybersecurity company in the guise of a slow-but-steadily growing CDN.
According to ResearchAndMarkets, the global cloud security market is projected to grow from $34.5 billion in 2020 to $68.5 billion in 2025, at a compound annual growth rate (CAGR) of 14.7%. This company expects to capture a meaningful share of this cloud-security bounty.
Already, it has become the market leader in several areas, including DDoS prevention, web app firewalls, and bot management.
Last year, this company’s app security and fraud protection solutions delivered more than 20% of the company’s total revenues. Network security and related services kicked in another 12%.
Importantly, these cloud-security revenues are growing at a rapid clip — 33% per year over the last five years.
The reason this revenue stream is growing so rapidly is obvious: Security attacks are increasing rapidly. And so, this firm is targeting a 20% CAGR for its security business over the next three to five years.
If it can achieve that goal, security revenues would double by the end of 2023 and account for roughly half the company’s total revenues.
Moreover, although it doesn’t qualify as a “deep value” stock, it looks quite cheap alongside the valuations of other leading cloud security companies.
I told my readers a lot more about this company — including specific “Buy” instructions — in a recent issue of Fry’s Investment Report.
You can learn how to join us there by clicking here.
P.S. Hundreds of thousands of folks saw my “Technochasm” viral video from earlier this year.
Well, the whole world has changed since then… and I’m back to talk about the Technochasm, the biggest megatrend in investing, in ways I couldn’t before… and discuss opportunities for even bigger market gains… the kind to keep you from falling behind. And I’m bringing along investing legend Louis Navellier to join me on camera for the first time ever.
On the date of publication, Eric Fry did not own either directly or indirectly any positions in the securities mentioned in this article.
Eric Fry is an award-winning stock picker with numerous “10-bagger” calls —in good markets AND bad. How? By finding potent global megatrends… before they take off. In fact, Eric has recommended 41 different 1,000%+ stock market winners in his career. Plus, he beat 650 of the world’s most famous investors (including Bill Ackman and David Einhorn) in a contest. And today he’s revealing his next potential 1,000% winner for free, right here.