Report
Jordan Lambert

Cloudflare: Initiation Report

NET have exploited last-mover advantages to be considerably nimbler than legacy and some early cloud vendors. They have taken Software-Defined Networking (SDN) to the nth degree which enables them to spin up new solutions at a rapid rate compared to many competitors. This has also empowered them to enter new markets. In the past 3 years NET have expanded from their original Content Delivery Network (CDN) market, to the Serverless (Edge) Compute market, and more recently into the Secure Access Service Edge (SASE) market – effectively increasing their TAM by 5x.

This extreme SDN approach lowers their costs and simplifies the management of their architecture. As a result, they can offer substantial free services and a customer self-serve model that combined has amassed them 3.5 million customers – of which 97% are yet to be monetized. This huge free customer base is not just a source of future revenue; they consist of tens of thousands of techie enthusiasts and software developers who are encouraged to give NET regular technical feedback. This is a rich source of R&D to expedite and fine-tune product development.

We surmise this has aided NET to build better solutions in recent quarters that can serve broader and more complex sets of use cases which has led to them garnering greater appeal with enterprise customers. Off the back of this, NET should sustain solid revenue growth in the short-term and margins should improve as well.
Provider
Convequity Ltd.
Convequity Ltd.

Obtain high-conviction information edge with unique insights

Analysts
Jordan Lambert

Other Reports from Convequity Ltd.

ResearchPool Subscriptions

Get the most out of your insights

Get in touch