Fastly (FSLY) is a leading edge cloud platform. While they support traditional CDN use cases, their focus and future growth opportunity lies in enabling edge computing. Edge computing represents a large addressable market and Fastly is rapidly rolling out new product offerings in this area. They are developer-centric with strong appeal to the developer community, due to their advantages in performance, security and programmability. Fastly has broad penetration among a set of forward-thinking enterprise customers and is experiencing high DBNER. They are founder led, with a strong leadership team. For these reasons, I think FSLY stock is worth consideration as part of a long term investment portfolio.
Fastly went public in May 2019. I do not ordinarily invest in software companies until they have been publicly traded for a year. This allows for several quarters of results to review and any IPO price inflation to wear off. So, I am not setting a formal price target on this stock. However, given its position as a software stack company and associated growth potential, I plan to monitor it closely and may open a position in the middle of this year.
Readers will find this post long and somewhat technical, with a focus on Fastly’s product offering, the technical underpinnings, the competitive landscape and addressable market. I think this foundation is important to properly evaluate Fastly for investment and to adjust expectations as the market is evolving rapidly.
Detailed Reviews
Fastly is a content delivery platform launched in 2011 and based on Varnish, an open-source web accelerator for dynamic content. The company’s main offices are located in three areas: New York, London, and San Fransisco. The main focus of Fastly is to provide a content distribution service that gives you full acceleration and full control, without compromising on performance.
Streaming Media
This feature gives the ability for you to provide a high-performance streaming service on your website with no complicated setup, which you can start within 15 minutes. It also has a video on demand feature which ensure effective caching for your videos, which improves the streaming performance for the end users. This way, no matter where your website visitors are located, Fastly provides the best speed for your streaming media, which is optimized based on the device and the location of the users. It means less buffering and less waiting for your visitors.
Real-time Caching
The real-time caching feature provides the best performance for your content distribution, which means that the end users can get the content that they want in the moment when they want it. Fastly allows you to configure the changes in your CDN account and see it reflected immediately for the users. It also provides process VCL logic, caching for all HTTP object types, fast dynamic content delivery, and unlimited HTTP purges.
Delivery Accelerator
The delivery accelerator feature ensures that your data is delivered instantly, within the microseconds. With more than 90% bump hit ratio, it means that the caching mechanism can deliver your data even faster than other CDN systems, which usually have around 60%-70% bump hit ratio. Aside from that, Fastly’s delivery accelerator feature also serves content request from the nearest POP. It also has a collapse request feature and the ability to serve content at the time of HTTP error, by delivering the more recent cache for that content.
Origin Shield
Origin Shield is a feature unique to Fastly that guarantees reliable content delivery for your website, no matter how massive the traffic that you get. The Shield POP will ensure that content can always be retrieved by the users in the moment of server overload. Request collapsing allows you to ensure that users get the content that they want, even though it hasn’t been cached. Also, the regular health check on the CDN servers ensures that all servers are healthy and ready to serve the content need of your end users at any given time.
Private CDN
Fastly provides a private CDN for you so that you can take the full benefit of each POP server that you have. It means that you are not going to share your CDN server with others, which is why you can get the best performance when using this service. The POP servers are powered by SSD storage system to ensure maximum performance.
Conclusion
Fastly can be a great content delivery network that you can use. With real-time caching and delivery accelerator features, the service ensures that you can distribute your content in the fastest and most effective way possible. Built on Varnish, Fastly can be integrated easily with your existing server if you already have this software installed on it. However, the minimum $50 monthly price might be a turn off if you don’t use a huge load of data transfer on your website, which means that Fastly should be ideal for you if you have a big data transfer that amounts to more than $50 of service fee per month.
