Fastly Stock Is Rising Despite Outage That Took Down Websites

Fastly and other content-delivery networks, or CDNs, speed up the performance of websites by putting access to content and services closer to users. Customers can include businesses in media and retail that expect speedy, responsive website performance.

CDNs are complicated, consisting of thousands of servers in many locations around the world. CDN operators—Fastly, in this case— routinely make configuration changes to reflect shifting customer needs, security updates, or software upgrades. One such change went kaflooey on Tuesday.

Andy Champagne, a senior vice president at Fastly rival Akamai (AKAM), and chief technology officer at the company’s Akamai Labs arm, said the message people were seeing Tuesday morning on many sites—a “503 error”—simply means the page wasn’t available. The speed of recovery and the nature of the error messages make it clear that this was not due to an outside attack, Champagne said. He noted that network-configuration updates happen all the time, as often as every five or 10 minutes in Akamai’s case. 

While irritating, the issue says very little about the overall stability of the internet. “The internet has been under inspection for the last 18 months like never before,” Champagne said. “It was a crucible moment, and it has done awesome.”

Gartner analyst Mike Dorosh, senior director in the research firm’s technology and service-provider group, said it seems likely that Fastly “pushed a bad configuration” globally across its network, and that the error became immediately apparent due to the high-profile, high-traffic nature of the company’s customers. He said it could have been something as simple as a typo in a line of code.

“They would not have recovered as fast if it was something else,” he said. “It seems like an operational error.”

Dorosh said website operators have to take some of the blame for the outages, suggesting more sites should consider using a multi-CDN strategy to reduce risks. He also noted that in some cases, sites were partially down, which is possible because websites don’t always come from a single source. Advertising and payment services, for instance, are often served by partners, and can be tied to other content-delivery networks.

CNET noted Tuesday that while Twitter (TWTR) wasn’t affected directly by the outage, the server that hosted its emojis went down.

Dorosh also said that CDN service agreements generally require some credits or other compensation for outages. Piper Sandler analyst James Fish wrote in a research note that customers are likely to see a services refund, and that some traffic could shift to other CDNs.

“With the potential refund to customers and traffic share loss, this makes an already challenging 2021 …more difficult,” the analyst wrote. He maintained a Neutral rating on Fastly stock , with a target of $45 for the price.

Despite the outage, Fastly shares have rallied 9.6% to $55.55, while Akamai stock gained 1.3% to $117.42.

Write to Eric J. Savitz at eric.savitz@barrons.com