Fastly CEO plots course through AI and security

Platform strategy

While security is the fastest-growing part of Fastly’s business, its CDN capabilities are still bringing in new customers.

“Our strategy is around the Fastly platform,” said Compton. “All of the services we offer are delivered on a unified global platform, and that is important to our customers because it means all of the services work together in a consistent way.

“Historically, CDN is what people came to us for, and that remains the largest part of our business by dollar value. But we are increasingly seeing customers start with security and then adding CDN or compute. Once they’re using the platform, they often start using additional services.”

Mike Shaver, Fastly’s vice-president of security products engineering, said the platform approach distinguishes Fastly from competitors by allowing it to offer a wide variety of well-integrated capabilities.

“I’ve stopped thinking about building security products, but rather about adding security capabilities to the Fastly platform,” he said. “We want to make sure that whatever Fastly capabilities you’re using to accelerate or protect your applications can be interchanged and combined.

Historically, CDN is what people came to us for, and that remains the largest part of our business by dollar value. But we are increasingly seeing customers start with security and then adding CDN or compute

“If you’re using our compute or delivery products, you can secure them the same way with our WAF [web application firewall] product, our anti-DDoS systems, or our AI bot management. All of those pieces can be layered according to the customer’s needs.”

This approach means developers and customers can learn the platform once and apply that knowledge across the entire portfolio.

“Integrating with Fastly is very much integrating with the web,” added Shaver. “We’re a company built on an open approach to technology – HTTP and all the standards that go with that – so products that meet us on those web standards are quite straightforward to integrate. We have a number of explicit partnerships, but also an implicit partnership with pretty much everything else that’s on the web.”

Shaver noted that Fastly’s compute services, which are integrated with the platform’s security capabilities, provide a flexible way to handle, route and pre-process HTTP requests using standard technologies like JavaScript and WebAssembly.

On observability, Shaver said Fastly aims for flexibility. “Our ambition is that you can choose to use our pane of glass to have a complete view of your systems … or you can export that data and use it in your preferred observability system,” he said.

AI, bots and the battle for content

A hot topic for the industry is the tension between the utility of training large language models (LLMs) on vast amounts of data and the rights of intellectual property owners. Compton said the issue came up in all of his recent customer meetings in Australia.

Customers with high-value content want companies like Fastly to protect it, give them insight into which bots are visiting their sites and for what purpose, and to provide the control to allow or block them.

“A lot of the customers we work with are taking very thoughtful approaches to how they monetise that content,” he said. “There’s a big difference between scraping for training data and fetching for real-time responses, and a lot of customers are looking at monetising those differently.”

The traditional ad-supported business model was compatible with search engines, as users would click through to a page, generating revenue for the content owner. This model breaks down with LLMs, which can deliver information to users directly, bypassing the original site and its monetisation.

“We’re in favour of innovation, but we believe it’s important for content owners to be compensated for their content so that their model is sustainable,” said Compton. “We’re really focused on giving them the tools they need to implement the business policies that they want.

“I’m optimistic that we’ll find a way to apportion that value … everyone’s trying to figure this out,” he added.

Fastly’s AI bot mitigation service is proving popular, according to Compton, and the company has a partnership with TollBit that provides additional telemetry and enables additional monetisation models.

The rapid rise of AI scraping bots has put the internet community on the back foot, according to Shaver. “If you go back a year, maybe even six months, AI bot management was not something that CISOs [chief information security officers] were talking about,” he said.

Many companies, he noted, don’t know where to start. “They want their information to be known by AI models where that’s meaningful,” said Shaver. “But in other cases, that’s content that has been developed at some expense or is considered proprietary, and they want to be able to control, monetise and protect those assets.”

This is where Fastly’s flexible approach to security comes in – the company has evolved its product into a “traffic classification engine” rather than just a tool to block or permit traffic.

“There are grey areas,” said Shaver. “Retailers absolutely want shoppers to get through, but they don’t want their inventory scraped by a competitor or a private equity firm. It can be hard to tell whether you’re seeing a bot operating on behalf of a human user, or if it is something more adversarial. Defining the kinds of traffic that system operators want to permit and navigating the grey areas is going to be a lot more work.”

Ultimately, Compton suggested, AI makes content more valuable, but a sustainable model for creators is essential. “Laws and conventions will trail the technology a little bit,” he said. “But it’s something that needs to be solved at a societal or political level. If there’s no model for content creation, it’s difficult to see how we sustain a culture.”

Path to profitability

Compton also addressed the company’s decision in 2023 to reduce its headcount by about 11%, a move made before his tenure as CEO began.

“That was a tough decision but something that was needed,” he said. “It gave us an opportunity to take a close look at our organisation, teams and investments, and align them with what our customers really wanted from us.”

Compton said this discipline, combined with business growth, recently allowed Fastly to guide the market that it would be free cash flow positive for the fiscal year – “an important milestone on our path to profitability”.

Asked about future growth, he said acquisitions will continue to play a role, balanced with in-house development and partnerships. However, he expects future deals are more likely to be smaller, “tuck-in” acquisitions rather than large-scale mergers.

APAC focus

Compton pointed to the company’s increased focus on the Asia-Pacific (APAC) region, including the recent appointment of a Singapore-based APAC leader, Nicola Gerber.

He suggested Fastly had not previously resourced the region to its full potential. “We’re bringing in more leadership and more focus on the region in general, and certainly in Australia and New Zealand,” said Compton. “These have been key markets for us.

“We see a lot of opportunity here, and I’m excited about some of the changes we’re making to increase our focus in the region.”