I am kinda busy but did some readings on Cloudflare and found their strategy is interesting to say the least. Here’s my shallow dive analysis and notes:
Cloudflare has 80% market share in CDN. Amazon’s Cloudfront has 5% market share…
Cloudflare can repeat the same strategy with R2 to compete with others.
“By the numbers, Cloudflare is easily the most popular CDN on the market. It beats out competitors such as Sucuri, Amazon CloudFront, Akamai, and Fastly. There’s hardly a lack of CDNs available, and some of Cloudflare’s rivals are powered by household names such as Amazon. This makes the former’s dominance all the more impressive.”
I am not trying to be political but just using it as an analogy.
CCP won over nationalist using Guerrilla warfare. How did they do it? They won the hearts of as many people as possible and they conquered the countryside first then moved to the cities: Encircled cities from the countryside. This is a game of GO! Which is what Cloudflare has been doing. That’s eating the cloud from outside in. Just point out some similarity. They are not completely the same. e.g. Cloudflare doesn’t hit and run.
Cloudflare is similar in a way that they built out a massive network around the globe first and then offers new services every year using the same servers. They have birthday weeks every year where they announce new innovations.
"Guerrilla warfare is a form of irregular warfare in which small groups of combatants, such as paramilitary personnel, armed civilians, or irregulars, use military tactics including ambushes, sabotage, raids, petty warfare, hit-and-run tactics, and mobility, to fight a larger and less-mobile traditional military. "
Since every server in our network runs every service, once we’re in for one thing means everything we do in the region gets better and less expensive to operate. This means, counter intuitively, as we add more locations to our network our costs generally go down, not up.
CloudFlare vs AWS and others:
-Modular vs centralized
-Disrupt incumbents by offering services they don’t care about. Take over the market and then move to new services which may eventually threaten incumbents
-Playing Go vs playing chess
-All services run on the same servers,fixed cost. additional services don’t increase cost much marginally.
- Egress fee is not economic but strategic. AWS uses it as incentives to lock in customers. Cloudflare is costing AWS some pain. This is a Sente Move in GO.
-R2 will be compatible with S3’s API, which makes it much easier to move applications already written with S3 in mind.
-Cloudflare strategy is influenced by Harvard Business School Professor Clayton Christensen. Professor Christensen actually sent Prince a note admiring his strategy and his company.
The market sees this and is giving Cloudflare a very rich valuation!