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Comment by nuerow | Hacker News Reader

> I don’t understand your argument. A relatively small but innovative company is working to provide competition against the big 3 cloud providers … and you cringe?

Cloudflare is by no means a small hosting provider. By some accounts, cloudflare is world's leading CDN provider by a long margin, far ahead of AWS in this market, and it currently piles up about half a billion dollars in revenue.

https://blog.intricately.com/2020-state-of-the-cdn-industry-...

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Meanwhile, AWS holds 41% of the entire marketspace, with $14.8 billion USD in revenues per quarter. Extrapolating that a bit, $60 billion USD in revenues... $500 million is peanuts compared to this [1].

What Cloudflare is trying to do is remarkable considering what they are up against.

[1] https://www.cnbc.com/2021/07/29/aws-earnings-q2-2021.html

> What Cloudflare is trying to do is remarkable considering what they are up against.

I repeat, Cloudflare is already the world's leading CDN provider, ahead of AWS by a long margin. This is not a David vs Golias story. At most it's a CDN Golias vs a all-in Golias.

It's disingenuous to compare Cloudflare and it's CDN offering to AWS at face value based on gross revenue. AWS offers everything from build pipelines to satellite ground stations, and even provides backup services comprised of a big truck with armed guards.

Cloudflare is impressive and very successful, but it's by no means a small upstart, specially when it serves a market where it eclipse all competitors, including AWS.

Perhaps you meant Goliath?

In any case, it kind of is a David vs. Goliath. Cloudflare currently employs ~1800 people and has revenues of under a billion dollars. They don't qualify as a large enterprise by anyone's definition. They aren't a 2-man shop but they are very much a David in the broader market. Amazon is an absolute monstrosity in comparison.

Golias is used in some other languages. See, e.g., http://www.bibliadinamica.comunidades.net/o-gigante-golias

Interesting read!

I think OP is correct, I'm not sure a judge would say that the "market" here is the entire set of cloud offerings. If the market is CDN, Cloudflare is the current market leader.

I think this is generally how things are seen. For example, in the Apple vs Epic lawsuit, the judge said the market was "mobile gaming", and that in that space Apple was not a monopoly.

Amazon total revenue adds up, but in each of the cloud categories they operate in, are they the leader?

So AWS as well the other public clouds are being dis-integrated by small startups - see snowflake for DW and now cloud flare.

Note that cloud flare is not fighting against AWS or Amazon but only against the S3 team inside AWS.

At this point they're competing with CloudFront, S3, and Lambda, but it is still a a long ways away from all of AWS.

> * At this point they're competing with CloudFront, S3, and Lambda, but it is still a a long ways away from all of AWS. *

Cloudflare's offering does not compete with Lambda at all. They have completely distinct usecases.

Cloudflare Workers at best compete with Lambda@Edge, which in spite of its name is actually a CloudFront feature.

https://aws.amazon.com/lambda/edge/

Cloudflare Workers competes with both Lambda and Lambda@Edge. Workers is a general-purpose compute platform that happens to run on the edge; it is not a platform intended to be specific to things that need to run on the edge.

(Disclosure: I'm the tech lead of Workers.)

It's probably better said as, "CF Workers competes with Lambda's synchronous use-cases".

Based on what I understand, there are still a few things missing to compete with Lambda's asynchronous use-cases. e.g. Step Functions, 15 min time limits, non-cron events (i.e. events for every CF product), batching events into the same execution, etc. While some of these are technically "not part of Lambda", to compete with Lambda CF needs the ecosystem as well.

Disclosure: 1. I'm an AMZN investor, therefore calling out that the ecosystem is worth keeping in mind. 2. I'm a NET investor, therefore calling out that I'm looking forward to seeing the ecosystem develop :)

I'd say that CloudFront Functions was a closer functional fit (and likely created in response to Cloudflare Workers). Lambda@Edge, despite the name, doesn't actually run at edge locations, but CloudFront Functions does.

Cloudflare is definitely not the world's leading CDN provider. Akamai has 7x the revenue.

That report is very misleading. Customer count is a useless metric for a CDN. If you looked at total traffic and spend, Cloudflare would be dwarfed.

It is when about 18% of the internet runs through Cloudflare.

Source? Assuming you're talking about 18% of traffic and not percentage of websites, how do you define what counts as traffic in that case? Transfer between AS's? Does internal traffic within AS's count? Does traffic between entities within the same AS count (e.g traffic from one AWS customer to another, or traffic from a Netflix OCA to an ISP?) I'm skeptical of any entities ability to fully measure the throughput of the internet even remotely accurately. The closest estimate you'll likely get is if you're a transit provider able to measure data transfer, and even then you'll be lucky to extrapolate within the correct order of magnitude from that for total global inter-AS traffic.

The 18% likely comes from here (% of websites) https://w3techs.com/technologies/overview/proxy

also, what is considered internet Traffic? lots of private wan's also exist. which complicates this comparison even further.

Amazon market cap 1.732T

Google market cap 1.89T

Microsoft market cap 2.289T

Cloudflare market cap 55.86B

Who do you expect to provide competition to Amazon/Google/Microsoft for egress pricing if not smaller company who is a "leading CDN provider" ?

Your comment seems to be justifying why Cloudflare is ideally suited to provide competition against the big 3 cloud providers with its R2 offering ...

Why would you think that a company's market cap (not only the relevant portion of the business, but the entire company) is a reasonable marker for how big of a player they are inside of this part of the industry?

Heck, market caps at this point are almost entirely untethered from reality. {cf. Tesla}

Market cap is a reasonable proxy measure for how much money those companies can bring to bear to win the market (especially if losses[1]), should those companies decide that competing is a number one priority. Two examples from Microsoft: XBox (worked) and Windows Phone (failed).

Revenues or profits in the cloud market for each company are mostly a measure of how much they are winning. How much they are spending is a measure of how much they are trying to compete, and the amount they can spend is also dependent on profits in other areas of their respective business.

> Heck, market caps at this point are almost entirely untethered from reality

Most stocks have some basis in reality, and relative value still matters even if you think the whole market is in Lala land. The stocks mentioned are not diamondhand stocks. Variation in valuation is not hitting two orders of magnitude, which is what we have here.

A better measure might be some gross profitability figure for each company that measures how much each company can pump into competing (expenses), but that is hard to calculate, especially for Amazon.

[1] Google Cloud Losses Shrink 59%, Revenue Hits $4.6B https://www.sdxcentral.com/articles/news/google-cloud-losses...

Edited: added second paragraphs.

It seems cloudflare makes about 500M in revenue. So their price/revenue is like 100, ouch. The market seems to believe cloudflare will do very well.

Market cap. has little meaning nowadays especially in tech. It's just a pumped-up number. You could talk about revenue but that's a different discussion.

Revenue for 2020:

Amazon 386B USD

Google 183B USD

Microsoft 143B USD

Cloudflare 431M USD

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