Does Cloudflare have any defensible moat? If Google or Microsoft decided to muscle Cloudflare out of business tomorrow, what’s to stop them? In comparison, we already know that Google can’t take out Facebook.
It reminds me a lot of Dropbox and the situation where for years Dropbox's value proposition was "yea OneDrive and iCloud provide the same service, but people like Dropbox because it is independent, unbloated, and simpler to use". But over time that's become less true, and as more and more companies move to using O365, they end up getting OneDrive as part of the deal anyway. And once you're already working in an environment with OneDrive, why continue using Dropbox?
In 3-8 years activist investors are going to realize that Cloudflare is the man-in-the-middle data collection point for a percentage of the internet and that a merger with $adnetwork would produce a money printing machine. A handful of "good guys" in engineering and management will be powerless to stop it when the time comes.
There are hundreds of thousands of companies that choose not to pay ridiculous price of AWS or not to use Amazon and Google at all - they use smaller providers, many of them manage their infrastructure themselves.
For them there is 0 reason to us CDN, DDoD protection etc from Google or Amazon. Cloudflare is one of the best choices for them. It makes sense even for AWS/Google clients that don't want to be changed millions for bandwidth like its gold or something.
So, while I see your point that eventually OneDrive could displace Dropbox entirely, I believe that Dropbox still has plenty to offer at the moment.
I would like to see data, but from my pov, dropbox is only losing market.
Google could replicate this, as could Amazon (that would be more my bet personally), but Cloudflare has no vendor lock allowing customers to use any infra. Google could do the same, but it would almost always have better and more robust support on GCP, and that would create a disconnect. Same for Microsoft and Azure. They're incentivized to vendor-lock you into their compute services. Cloudflare isn't.
But, there is room for multiple competitors across the space. For instance Akamai is still a dominate player in the CDN space and Fastly has been strong. Luckily there are plenty of businesses available that they all can eat. Google muscling in might hurt Cloudflare down the line, but it wouldn't necessarily reduce the staying power of Cloudflare. Again, it's hard to achieve and undo their physical network distribution.
That's funny because in the late 2000s, people said that FB was doomed as soon as Google would decide to compete.