The CEO of Fastly says that the ‘strange situation’ around TikTok, its biggest client, has taught it a vital lesson about the cloud industry (FSLY)

Fastly CEO Joshua Bixby

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The battle over TikTok’s future in the US was an unexpected glitch in the popular app’s explosive rise. 

It was particularly jolting for Fastly, which helps deliver the quirky, viral videos to TikTok’s millions of users faster via the cloud.

ByteDance, TikTok’s China-based parent company, is Fastly’s single largest client — which all of a sudden became a liability as TikTok found itself in the center of an international trade dispute between the Trump administration and China. The TikTok saga’s impact on Fastly hit home last month when its stock plunged due to a drop in demand.

“If you told me six or nine months ago that I’d be in a situation where this would be the topic of discussion because of how this has played out, I’m not sure I would have believed you,” Fastly CEO Joshua Bixby told Business Insider. “So it’s a bit of a strange situation to be in.”

The demand plunge from a major client was an unforeseen hurdle for the fast-growing company whose technology helps major platforms — including Slack, AirBnb, Spotify, Stripe and Pinterest — deliver video and other content faster and more securely. Fastly’s stock has dropped more than 40% over the past month.

The Fastly situation shows how the rapid rise of social media apps like TikTok has clashed with changing attitudes toward data and privacy. Bixby says their experience underscores the need for cloud companies to be even more nimble in a rapidly changing tech landscape.

“We don’t have a lot of history where specific apps have come under focus like this,” Bixby said. “We are a tool for innovators. That’s really the business we’re in. How the regulatory environment shifts under us, it’s just hard to predict and something that we don’t consider ourselves experts on.”

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The TikTok deal is in limbo, and it’s causing ripples for Fastly

The dispute began when the Trump Administration demanded that the Chinese tech giant sell the app’s US operations to an American entity, claiming it was violating the privacy of US citizens. ByteDance denied the charge, but agreed in September to create a new US-based TikTok entity in which Oracle and Walmart would collectively own a 20% stake. 

The deal is in limbo as other details of the agreement have yet to be finalized. The Trump Administration had given TikTok until Thursday, November 12 to finalize the agreement. But on Tuesday, TikTok said it is asking a federal court to intervene, complaining that the company has received “no substantive feedback” on its proposals for resolving data privace concerns.

Meanwhile, the uncertainty has taken its toll on San Francisco-based Fastly.

Fastly’s stock plummeted in late October after Bixby told analysts on an earnings call that TikTok, which accounted for 11% of Fastly’s revenue in the first three quarters of the year, “removed a majority of their US and non-US traffic from our platform by the end of the quarter.” 

“We believe this global reduction was in response to the potential of a prohibition of US companies being able to work …read more

Source:: Businessinsider – Tech

      

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