CloudFlare Is In Talks to Raise Funding At Near A $1 Billion Valuation
techcrunch.com
techcrunch.com
The more I read the article, the more it seems that the article is definitely masterful PR from CloudFare. K.M. Cutler either took the bait hook-line-and-sinker (comparing vanity metrics for a proxy service to service sites, etc.) or the bubble is way worse than I imagined.
I can see the Superbowl ads already: "It's not really the cloud unless it's dot-cloud."
That's 1/6th the Akamai market cap.
You know, Akamai. That other little CDN. The one that happens to make 4000x the revenue of Cloudflare.
Ah well, it's probably justified. Cloudflare insists they're not a CDN after all. They only happen to offer the exact same services by accident.
This is from techcrunch and not confirmed...
Not sure its worth the bandwidth/http request savings on a small site. If you run a big site, you'd be willing to pay for a top notch CDN.
Cloudflare sits in a weird middle ground.
On reading some of the criticisms here, I'm concerned I made the wrong recommendation - but at the same time, I'm also seeing comments like "CloudFlare is fantastic". Can anyone weigh in with what I really need to know about CloudFlare in order to ascertain if it's a good choice for my client or not?
Then I used it for my startup, which was using an SSL cert, and it had major problems on launch day because of that (ugh). It continued to have SSL compatibility issues for a week, so I've only been using it as a DNS since. As a test, I enabled it on staging and have left it off on production. To their credit, it seems like the SSL downtime issues have gone away.
It's been fine as a DNS, but I don't really have any desire to enable the CloudFlare features again. I love the idea of it keeping me safe from spambots and DDOS. At the same time, it really is a single point of failure, and it's failed more than any other technology in my stack. And the caching layer is way too brittle. I've set up rules to turn it off in staging.
Since then they've added an SSL service where you can get an SSL cert from them. It only SSL's the traffic from the client to Cloudflare, not from Cloudflare back to the server so you've still got part of your transport not secured. I wonder how many people bought into that service without realizing that. (You can have Cloudflare connect HTTPS back to your server, but they still offer that partially covered option for some reason).
Honestly, I hate them.
I usually get flagged when following popular links from Twitter. I just find it highly annoying their support doesn't care. When this happens, I just get told to wait 72 hours or whatever and go back to the site. I wonder how many users sites lose because of that.
I do like the idea of what they are doing, the DDOS protection alone makes their service worth at least $100/Month to most revenue generating sites. If they are signing up 30k new customers per month, and 1% pay $20/month, then you're talking about growing by $6k/revenue or more a month. compounding that adds up. I'd be surprised if they didn't break $1-2M in revenue in 2012. (pure speculation, no insider info. I do use their plugin on my blog)
It's not even 400m uniques unless you consider delivery of a cached page a unique where the end viewer of the page doesn't even know he is served by cloudflare. Other than hijacking the 404 pages (which would be a percentage of the uniques) there isn't any value that I can think of to that. It's like serving up dns queries in a way.
Things like these(although probably helpful to the site authors) are actually breaking the internet unfortunately.
Although I banned China, Russian and some eastern euro countries after getting hit heavy by spammers and using Cloudflare to see that they all came from there. Spam went down by 99% after that.
The caveat is that none of my signups were coming from those countries (where Diabetes is less prevalent).
$1 billion is high, but not outrageous.
Akamai is the market leader, and currently valued at ~$7 billion. They recently bought the most innovative player in the CDN market (Cotendo) for $250 million.
CloudFlare may not have huge revenue, but they have something that all the other non-Akamai CDN players would kill for: a huge, quickly growing customer base.
Their lack of revenue is a byproduct of their freemium business model. It's not a big problem, because CloudFlare can change the parameters in that model at anytime, and provided they are keeping customers happy it should be a fairly easy conversion to a paid customer.
People are used to paying for webhosting, and Cloudflare are already building reseller agreements with companies like Dreamhost to build these relationships further.
The biggest problem I see with CloudFlare is that they don't have strong (any?) video CDN offerings. At the moment that isn't a big problem for them (not many of their customers need it since most use SaaS platforms for video) but I would imagine it is an area they are looking hard at.
Drug dealers, if you measured the P/S ratio right after they have given out that first, free hit :)
Seriously, though: that's how freemium business models work. They deliberately delay revenue to build adoption.
Few users complained about being blocked. I contacted the support, but their answers didn't solve my problem. Finally, I figured out how to add my country to the "trust list" and never heard about blocks ever since.
I had similar problems with blocked users and site-is-down false positives, so I had to drop it.
What else could justify such a valuation for a Web security proxy provider?
But Cloudflare isn't just a CDN, it has an application firewall/security thing built in too.
That's important because suddenly you can't get away with just Varnish, and rolling Apache+mod_security out to each node is probably insufficient as well.
Edit: fixed url, thanks.
The idea of rebuilding it for $250k is ludicrous.
On the other hand, that is the baseline pitch that has been used by starry-eyed start-ups for ages now.
no but seriously. sounds like a CDN for your static URLs and maybe combined with a web throttler and web firewall in front of your dynamic URLs. I do see some revenue potential there, especially in providing service to companies with weak/no tech staff.