What Cloudflare is doing, a profound take

Some one sent me this off board, but was embarrassed to post it himself. I thought it was brief but profound, and it was the first time I felt I actually understood what Cloudflare was doing! I’m posting it with his permission, but keeping him anonymous as he requested.
Saul

Saul, I’m not going to have the technical chops to put this in the board. But I do want to respond with what it looks like to me.

The internet is a dangerous and insecure place. It is also the spinal cord of out current civilization. What Cloudflare is offering might be thought of as a secure subset of the internet. Two entities within the secure subset can communicate in safety. Communication with the “outer” unsafe internet is available, but you take your chances.

What is their goal? Get everyone who matters into the secure subset! At one end that means major providers, but at the other end it means businesses and individuals who live by their internet connections and can afford to pay a bit more for a safe internet… That’s how it looks to me, at any rate.

Saul here: As I said, I thought that was profound!

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What is their goal? Get everyone who matters into the secure subset! At one end that means major providers, but at the other end it means businesses and individuals who live by their internet connections and can afford to pay a bit more for a safe internet… That’s how it looks to me, at any rate.

Saul,

I have been expecting the internet to develop this way for a long time. I would hope the technically savvy can add color to this belief.

It is my opinion, as uninformed as it may be, that for there to be a really secure internet, each end point must have some sort of financial accountably.

In wireless we actually have this. Every phone that connects to the wireless net work has to be authenticated and some one with financial accountability must be identified. The wireless companies in an effort to save money and make the products more interesting made the wireless network more integrated with the World Wide Web. This allowed people to use SIP (Session Initiation Protocol) to spoof phone numbers endlessly. This is why the phone companies cannot stop robocalls. Worse, many of the setup, the SIP protocols must be moving in the web. I have detected that the AI of the robocalls are targeting me based on incoming and outgoing phone calls.

If Cloudflare is working on a system that can isolate unauthenticated addresses I
probably will re-take a position and follow them much more closely.

Cheers
Qazulight

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If Cloudflare is working on a system that can isolate unauthenticated addresses I
probably will re-take a position and follow them much more closely.

Correction. Only had one cup
of coffee. Looking back at my port I sold Snowflake, not Cloudflare (NET). i still have a full position in Cloudflare.

Cheers
Qazulight

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Engineering VP here, with 15 years in mobile and 5 in public safety (police, fire, etc).

I spent the last few years working on how to morph private radio systems (LMR=Land Based Mobile Radio) to public cloud and LTE. What stands out is the need for resilience — systems that must continue to operate even when the world goes bad: tsunamis, earthquakes, terrorist attacks, cloud outages, etc. These requirements must be met for autonomous vehicles to really take over. Similarly for any degree of IoT that is truly resilient — it won’t work if you can’t turn your lights on or open your door because there is an outage somewhere 1,000 miles away.

It is clear that Amazon with 77-odd data centers or Google with 21 will not be able to satisfy these needs. Whoever figures it out will be managing tens of thousands of points of presence, so every city can continue to operate even when disconnected from the rest of the world.

What I see in Cloudflare’s announcement is that they are going to build the skills to do this. Add in some routing, and they may be the closest to the level of distribution that is required for a truly resilient system. They are starting with caching and security and other clear needs, but the ecosystem they are building is beyond what Amazon or Google have, and it appears to be well suited to a fault-tolerant IoT world. It will be interesting to see where they go with it.

Martin

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It is clear that Amazon with 77-odd data centers or Google with 21 will not be able to satisfy these needs. Whoever figures it out will be managing tens of thousands of points of presence, so every city can continue to operate even when disconnected from the rest of the world.

Which is pretty important as four guys each with a crow bar could isolate Omaha,
probably for weeks. Of course the fall out would be the failure of first net in all of Nebraska, Western Iowa, all of South Dakota, all of North Dakota and maybe a little of Minnisota.

It would also have a negative impact on Strategic Air Command, FAA flight control and east west internet traffic and most of the cell phones in three states.

Cheers

Qazulight

This is “off-topic,” but not really.

To get some background on internet security, I’ve been reading Bruce Schneier, a well-known security/cryptography expert. (If anyone has any other names and sources to suggest, please do.) The main point I’ve been getting from his book “Click Here to Kill Everybody” (meant as a tongue-in-cheek reference to techno-hype) is that the internet was not originally designed with serious security in mind, never intended as something that critical operations would depend on for communication.

That makes for a continuing arms race between hackers and security people, and profitable investments in companies like Cloudflare, Crowdstrike, etc. [It also makes for hackers stealing my SSN (and those of many others) from the federal government because I happened to work on the 2010 US Census.]

If the internet were redesigned with security-friendly underlying protocols, it might make for fewer profit opportunities, but a more stable society, and I think we’d sleep better at night.

It amazes me how much we’ve become forced to depend so much on something so rickety.

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What Cloudflare is offering might be thought of as a secure subset of the internet. Two entities within the secure subset can communicate in safety. Communication with the “outer” unsafe internet is available, but you take your chances.

What is their goal? Get everyone who matters into the secure subset! At one end that means major providers, but at the other end it means businesses and individuals who live by their internet connections and can afford to pay a bit more for a safe internet… That’s how it looks to me, at any rate.

Well, not really.

Remember that Cloudflare is not, and probably will not ever be, its own internet such that traffic never or even rarely leaves it. And that’s simply because no company can ever be the Last Mile connectivity solution for everyone except a select number of large businesses that can afford it. And even then, as a business you’re not going to limit yourself to working only with companies that can also afford to be on the same private internet, so you have to be connected to the public internet. And, being connected to the public internet means you are subject to things like DDOS attacks. You can read how Cloudflare connects to last mile networks here: https://noise.getoto.net/2021/09/16/unboxing-the-last-mile-i… , as well as how they’re working to help issues be identified quickly.

What Cloudflare is providing, at its core, is a hosting service. They have servers set up around the world to host your website and applications (which included APIs). Their architecture is by its nature distributed, but at the end of the day they have servers, running a bunch of custom security and performance-oriented software, connected via both public internet and their own private backbone, on which they run their customer’s applications and host their websites. It’s not a “secure subset of the internet.” The security part helps stop DDOS attacks from impacting you as a customer, and the performance part helps your website or application’s performance among widely distributed users.

It is my opinion, as uninformed as it may be, that for there to be a really secure internet, each end point must have some sort of financial accountably.

I’m not sure about the “financial” part, but yes, knowing endpoints is a good piece of establishing secure connections. Being able to examine and remove bad traffic before it reaches vulnerable endpoints is another good piece. These are both provided in Cloudflare’s Zero Trust solutions: “Cloudflare Access” & “Cloudflare Gateway.” But, they are not for the general internet, they are for businesses that want something better than a firewalled internal network. Similar to what ZScaler offers, btw. These “Zero Trust” solutions are great, but implementing them on a world-wide scale is akin to the Third Reich’s Kennkarte usage (everyone had to apply for, obtain, and show “their papers” on demand to officers. A business can do that for their internal employees/users, but we expect more privacy from the government.

What stands out is the need for resilience — systems that must continue to operate even when the world goes bad: tsunamis, earthquakes, terrorist attacks, cloud outages, etc. These requirements must be met for autonomous vehicles to really take over. Similarly for any degree of IoT that is truly resilient — it won’t work if you can’t turn your lights on or open your door because there is an outage somewhere 1,000 miles away.

It is clear that Amazon with 77-odd data centers or Google with 21 will not be able to satisfy these needs.

A bunch to unpack here.

First, it’s true that there are systems which have become so important that they must be resilient to man-made and natural disasters. However, neither autonomous driving nor home control are good examples. There are no production autonomous driving systems that rely on connection to a network to function - they all are able to process inputs and determine what to do via an on-board system. Some may get additional information from a network (traffic is an example of widespread adoption), but that information is not necessary. There are no 5G edge networks capable of the latency requirements needed to, say, process an image and detect that it’s a pedestrian you don’t want to hit. Similarly, I don’t know of any internet-enabled home control systems that do not have local control overrides. If Alexa can’t turn your lights on, you can always walk over to the physical switch.

I also disagree with the characterization that Amazon, for instance, does not have a resilient architecture in place. You can read https://docs.aws.amazon.com/whitepapers/latest/aws-overview/… or https://aws.amazon.com/about-aws/global-infrastructure/ to find out that Amazon currently has 25 fully isolated “Regions,” with each region having multiple “Availability Zones,” which are themselves isolated, and you can elect to have your application run on multiple Availability Zones within a Region to achieve complete redundancy. In addition, Amazon provides regional API endpoints, which are designed to operate securely for at least 24 hours even if isolated from the rest of the internet. Amazon’s infrastructure goes far beyond anything that Cloudflare has today in terms of worldwide resiliency.

Thirdly, no matter who is hosting your application, if resilience is important then you need to design your application for that - you can’t just have it hosted on a great network and expect everything to always be fine. If you’re using Cloudflare’s distributed POPs (Points of Presence) for instance then you have to figure out where copies/backups of your core application’s data lives. Just think about having your customers log on to your website. You maintain some kind of database that stores each user’s information, including username and password (and potentially secure token ID). That database will usually live on a central server, which could go down. So, you need at least two servers with the database, and during normal times you have to keep them in close synchronization as new users are added, old users removed, or users just changing their passwords. And if you’re using something like Cloudflare’s edge network for performance, then you’re probably keeping read-only subsets of your user database on each POP (Point of Presence). Then if the POP goes down, perhaps another POP that’s further away takes its place, but it will have to go back to the central server to get the DB record for that user it hasn’t seen before. As a large company you’re not going to store your entire user database on a relatively small POP, and even if you did you’d still have the multiple DB synchronization requirements. With Cloudflare’s edge network, you’re getting faster performance most of time, not resiliency. The recent widely reported failures of edge networks taking out huge numbers of websites and applications prove this.

Now, there are certainly some kinds of applications that perhaps don’t require authentication and yet need to service users with performance and reliability. The caching nature of a POP can be helpful there, but there’s always an “origin server” which has the main storage of the data involved (and it needs to be backed up/synchronized). You can’t run an Edge Network like a disk farm of RAID 5 devices because that kind of constant inter-POP communication would kill performance.


So, what is the point of Cloudflare’s “backbone?” Here’s Cloudflare’s page on it: https://noise.getoto.net/2021/09/16/cloudflare-backbone-a-fa…

Essentially, it provides additional routing choices for data being requested at one of Cloudflare’s data centers needing to be provided through another of Cloudflare’s data centers. The “additional” part is important, because, as Cloudflare itself admits, sometimes the public internet is simply faster due to shorter fiber distances. But, capacity overloads or failures can mean that Cloudflare’s own backbone is there as either a backup or a faster performance option. But, it’s important to recognize that this backbone is only between Cloudflare data centers. It doesn’t run all the way to TMF’s headquarters in Virginia, nor to your home for that matter.

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Outstanding information about Cloudflare’s architecture and its standalone nature, Smorg. Thanks.

Thank you Smorgasbord for that comprehensive post. You clearly have a superb understanding of NET’s offering. I am sure that I am not alone in being curious as to whether you are long NET?

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Cloudflare’s claim to fame seems to be their CDN (Cloud Delivery Network).
This is something that allows your content to be cached on a server near your geographic location
and speeds up the websites (e.g. makes video download and rendering is quicker).

After reading a little more, the CEO targeting S3 egress is rational but pointless.
AWS has millions of customers and for Cloudflare to attract AWS Cloudfront’s customers he is making this pitch.
It’s NOT about getting AWS to reduce their billing to altruistically save people money - it’s Cloudflare trying to manipulate AWS to the benefit of Cloudflare.

Companies who are on AWS are not going to abandon AWS-Cloudfront which is a very good offering and integrates with AWS very well and S3 egress is free.

https://www.reddit.com/r/aws/comments/ornyo3/cloudflare_accu…

Competition:

https://www.techradar.com/news/best-cdn-providers

Coudflare’s primary competition is other CDN providers like Akamai, Cloudfront(which is a AWS service), Fastly.
Don’t get confused between Cloudflare and Cloudfront. Cloudflare does not compete with AWS,GCP or Azure.

Akamai’s revenue as of 6/30/2021 was $831m with a YOY growth of 7%. Market cap is $17B
Fastly’s revenue as of 6/30/2021 was $85m with a YOY growth of 13%. Market cap is $4.7B
Cloudflare’s revenue as of 6/30/2021 was $152m with a YOY growth of 53%. Market cap is $37B

Market is really rewarding growth.

How about gross margins ?
Akamai: 62%
Fastly: 52%
Cloudflare: 77%

Cloudflare is growing faster but more importantly scaling well.

Customers:

In a bid to highlight the important developments of Q2, the Cloudflare CEO stated:

“…We also added a record number of large customers, signing the equivalent of more than two six-figure customers every single business day in Q2.

They have strong large customer growth, with a record addition of 140 large customers in the quarter , bringing the total number of large customers to 1,088.

I am surprised with the brisk customer growth. They are stealing customers from competition.

I am not a Cloudflare investor (yet).

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Smorg, when I read this, There are no production autonomous driving systems that rely on connection to a network to function - they all are able to process inputs and determine what to do via an on-board system
it struck me as going against everything I thought I heard. The processing power needed for autonomous driving seems huge and could not be conducted on an onboard computer. So I did a web search that seemed to confirm my beliefs in multiple results, such as…

https://www.iotforall.com/how-do-self-driving-cars-work from June 2020
Self-driving cars use cloud computing to act upon traffic data, weather, maps, adjacent cars, and surface conditions among others. This helps them monitor their surroundings better and make informed decisions. Self-driving cars must be connected to the internet even if edge computing hardware can solve small computing tasks locally.

Though current “autonomy” like Tesla’s is still primitive and I am don’t know how it would get a fast enough connection to the cloud to matter at this point.

Lots here:
https://www.financialexpress.com/auto/industry/internet-conn…

Autonomous driving or a smart car is expected to generate a huge amount of data that needs to be responded with quick turn-around-time. According to Barclays, an autonomous car could generate 100 gigabytes of data per second, and with a response time of less than a millisecond and output of 1Gigabit, 5G will be the new definition for speed and connectivity for autonomous vehicles.

Level 5 is full autonomy and we are not there yet, but it seems that has to have lots of IoT and Cloud support.

Pete

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The processing power needed for autonomous driving seems huge and could not be conducted on an onboard computer. So I did a web search that seemed to confirm my beliefs in multiple results…

You found an Indian investing website and an IoT enthusiasts site with an article written by a guest-writer who works at a language translation company. There’s a lot of hype around 5G and how it will supposedly enable all kinds of things, autonomous driving included.

Here’s an MIT Technology Review article that points out that Waymo’s autonomous vehicles are not continuously connected to the internet: https://www.technologyreview.com/2017/01/10/154642/why-some-… A snippet:

Waymo is able to take its cars offline because its crucial systems are all stored on local computers aboard the car. And since those systems are performing the same job as a human driver—that is, taking in information about the roadway and making decisions about how to behave—there’s no need for it to pull data down from the cloud at every turn.

Waymo itself confirms that it doesn’t even rely on GPS because of the potential loss of signal: https://waymo.com/waymo-driver/

instead of relying solely on external data such as GPS which can lose signal strength, the Waymo Driver uses these highly detailed custom maps, matched with real-time sensor data, to determine its exact road location at all times.

Here’s a CNET article (https://www.cnet.com/tech/mobile/5g-latency-why-speeding-up-… ):
“Nobody is going to do robotic surgery. Autonomous cars will never be controlled by 5G,” said Technalysis Research analyst Bob O’Donnell."

5G cell towers can be no further apart than about 1,000 feet, compared to 4G towers that can be miles apart, due to their shorter wavelength. Add in that 5G signals are far more easily blocked by obstructions like buildings and trees. As a result, we’re not going to blanket the US with 5G cell towers that cover every foot of every road in the US (which you’d need for Level 5’s “everywhere” requirement). Heck, you can’t even drive Hwy 1 in CA without losing cell signal for miles and miles in Big Sur today. And even so, this would require serious Edge Computing that isn’t practical. Are you going to put high powered compute on each and every of those gazillion 5G towers? No, so you’re going to need fiber to connect those 5G towers to the internet and have a large number of local POPs, but now you’ve got additional latency to/from the tower and POPs, and you also have to worry about POPs getting overloaded from too many vehicles in their area or going down from failures (internal and external) and what the fail-over plans are, and then what failing over actually does to the needed latency, which means multiple and overlapping POPs and near-instant failure recognition and fail-over mechanisms. None of which exist in the real-world today at any reasonable scale.

As a result we’re not going to get that 1ms latency that’s been hyped, at least any time soon. It’s not only easier and cheaper, but more reliable, to simply have faster compute on-board vehicles. And what we’re seeing is companies like Nvidia and Tesla designing and building chips that are not only fast enough, but that have built-in redundancy so one CPU can take over if the other fails. And I believe we’re going to more smart devices in the vehicles. For instance, cameras that don’t just send images but can do some on-board image processing beforehand, off-loading some work from the car’s main CPU. The other side is, of course, optimizing the self-driving software to require less compute, which will happen as neural nets and algorithms improve.

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Not sure how relevant autonomous driving is here. About two years ago NOVA did a program “Looks Who’s Driving” about self-driving cars. As impressive as the strides have been, it’s not likely to happen in my lifetime. I will forego all the gory details.

To summarize, there were two approaches: big data, and computer learning. Big data is basically lots of examples and computing power, which you alluded to. The other was machine learning from almost zero. Takes a long time, and it’s still not good enough. It failed to recognize a pizza delivery guy because he was holding the pizza up (by his head), for example. No mention was made of 5G (or similar) that I recall, though they had a vision that cars would talk to each other, coordinate their actions, and thus avoid accidents. Which is even MORE computing power necessary.

Driving is a much more complex process than we realize. The human brain takes lots of short-cuts, and still processes vast amounts of data without us being aware we’re doing it. Getting a computer to do that is, at the present time, not really possible. Maybe someday. Not today.

1poorguy (no position in Cloudflare, Tesla, or any other stock I’ve seen mentioned in this thread)

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