Cloudflare Takes Aim At AWS With Promise of $1.25 Billion To Startups That Use Its Own Platform (techcrunch.com) 21
An anonymous reader quotes a report from TechCrunch: Cloudflare, the security, performance and reliability company that went public three years ago, said this morning that it will help connect startups that use its serverless computing platform to dozens of venture firms that have collectively offered to invest up to $1.25 billion in the companies out of their existing funds. It's a smart, splashy incentive to entice more startups to use the now five-year-old product, which, according to Cloudflare, enables developers to build or augment apps without configuring or maintaining infrastructure. Cloudflare notes in a related press release that startups can scale so fast using the platform that Cloudflare acquired one last year: Zaraz, a startup that promises to speed up website performance with a single line of code. (Cloudflare isn't promising to acquire other startups, but the suggestion is in the air.)
Indeed, this funding program, as far as we can tell, is really about Cloudflare taking aim at hugely lucrative products like AWS, Azure and Google Cloud. Toward that end, we asked Cloudflare CEO Matthew Prince over the weekend why Cloudflare thinks it can steal market share from these much bigger companies. "I wouldn't characterize it as 'stealing' market share from anyone," he said. "It's a matter of earning market share, and the way you earn market share is by providing a better product at a more affordable price." Asked how much more affordable, he said merely that it's "significantly less expensive than the legacy public clouds" because of how it's built. As Prince explains it, modern browsers "encounter new, untrusted code with nearly every page they open online today. They need a way to quickly and safely execute that code [and use a] technology called isolates to achieve that." Cloudflare Workers, which is the name of the platform, "takes the isolates technology inspired by the browser and makes it available as a developer platform."
Prince said the idea to connect startups on its platform with venture funding came out of existing relationships it has with VCs who'd begun noticing that more of their portfolio companies are using Cloudflare Workers as their developer platform. "When they did due diligence," said Prince, the VCs would "push [founders] on 'why Cloudflare and not a platform like AWS,' [and] the answer that startup after startup gave was that Cloudflare Workers scaled better, had better performance, and was less expensive to operate." "If you're a VC and you hear an answer like that multiple times from the most promising startups it causes you to take notice," he added. Cloudflare is not providing any funding or making any funding decisions, it makes clear. All funding decisions will be made by the participating firms.
Indeed, this funding program, as far as we can tell, is really about Cloudflare taking aim at hugely lucrative products like AWS, Azure and Google Cloud. Toward that end, we asked Cloudflare CEO Matthew Prince over the weekend why Cloudflare thinks it can steal market share from these much bigger companies. "I wouldn't characterize it as 'stealing' market share from anyone," he said. "It's a matter of earning market share, and the way you earn market share is by providing a better product at a more affordable price." Asked how much more affordable, he said merely that it's "significantly less expensive than the legacy public clouds" because of how it's built. As Prince explains it, modern browsers "encounter new, untrusted code with nearly every page they open online today. They need a way to quickly and safely execute that code [and use a] technology called isolates to achieve that." Cloudflare Workers, which is the name of the platform, "takes the isolates technology inspired by the browser and makes it available as a developer platform."
Prince said the idea to connect startups on its platform with venture funding came out of existing relationships it has with VCs who'd begun noticing that more of their portfolio companies are using Cloudflare Workers as their developer platform. "When they did due diligence," said Prince, the VCs would "push [founders] on 'why Cloudflare and not a platform like AWS,' [and] the answer that startup after startup gave was that Cloudflare Workers scaled better, had better performance, and was less expensive to operate." "If you're a VC and you hear an answer like that multiple times from the most promising startups it causes you to take notice," he added. Cloudflare is not providing any funding or making any funding decisions, it makes clear. All funding decisions will be made by the participating firms.
Peanuts (Score:2)
Expected effect: None. Probably was cheaper to pay this than to hide their criminal efforts better.
Re: (Score:2)
Oops, wrong story. Please ignore.
Funny Money (Score:2)
Is that $1.25 billion in "cloudflare credits"?
If so, it's basically nothing.
"Serverless" infrastructure, huh? (Score:3)
So they own not only your data, but your ass.
Why (Score:3)
People know how to use AWS. If you're in the Microsoft ecosystem, Azure has an easy on-ramp. Google cloud has decent AI support.
There are reasons to use those systems. If you use Cloudflare, then the savings you get will be eaten up by retraining costs.
Re: (Score:2)
They're aiming at startups - there is no retraining - from day 1 you're on Cloudflare. If you can find CF people to hire in the first place, I guess...?
AWS and GCP offer a whole range of features - and so you can build your apps with message queues, databases, "big data" options, or IoT or whatever else. Cloudflare (like many other small cloud vendors) may do one thing very well, but you won't get all the other things, so you'll end up rolling your own. If you only have a couple of requirements, you could s
lazy (Score:2)
This seems like a really lazy solution for people that want to write software and have no idea about hardware. It is still cheaper to roll your own, especially as a startup. Setting up your business no top of a pay-per-use platform just does not seem like the best option.
Re: (Score:2)
I mostly agree with you, and especially a year or two ago I would have had similar disbelief that this made any business sense. Now I am starting to wonder; there are so many things that are virtualized, containerized, and appified... maybe I am missing something.
If you need a low-latency application to serve geographically diverse customers, why would you really want to try to be your own CDN and deal with servers in many different locations? Does it give you an easier path to regulatory compliance one w
Re: (Score:2)
It does make sense when you (as all startups do) expect to be either out of business or huge two years down the road.
Remember that your goal is to burn through ALL the money and leave nothing behind. You want to grow explosively while burning cash so that investors are at the "dump more money into this company because it's going well and it won't survive if you don't" decision at every investment round. You do NOT want to own anything that would give investors an idea of recovering some of their investment.
Re: (Score:2)
Calculate real TCO to put something DIY together that is comparable. Power, space, cooling, hardware, software, etc for something that is just as performant, fault tolerant (from the components all the way up to the datacenter), physically secure, firewalled, all managed for you, etc etc.
Chances are you don't think you need all of that and that is why you say you can do it cheaper. Most folks don't count their time or their employees either.
I'm not saying your wrong. I'm just saying folks that say DIY is
Re: (Score:2)
Most businesses do not build their own datacenter(s) and that is not what I am suggesting. There is a big gap between build everything yourself (even the datacenter itself) and using a pay-per-use serverless SaaS. The answer depends on your use case.
Re: (Score:2)
I agree. However, these threads usually have comments about the cloud is more expensive than DIY. The correct answer is, "It depends."
For my case, higher ed in "hurricane alley", it is typically cheaper and easier to go cloud/SaaS than on-prem.
Re: (Score:2)
This is why it is important to try to pick the right path early:
https://levelup.gitconnected.c... [gitconnected.com]
Re: (Score:2)
Yep. Developers (or any internal customer) needs to fully understand the TCO of what they are building / using / requesting. Blindly leaving it to others and taking no responsibility is ignorant at best.
Just one more step... (Score:2)
...to verify that you're not a robot!
You had me at... (Score:3)
ROFL.
Who writes this stuff?
Re:You had me at... (Score:4, Funny)
Re: (Score:2)
Can't you have the equivalent of a large program in a single line of Perl code?
That will qualify as one line of code, regardless how long that line is. ;)
Re: (Score:2)
Mind Blown (Score:1)
KiwiFarms should apply (Score:3)
Who's going to trust Cloudflare with their entire business? VC's are going to be very wary if it's anything disruptive.