Business Breakdowns
· Matt Reustle, Sam Eden
[00:00:00] S0: If I'm thinking about that as an internal employee, would that be if I'm logged in and I click on a link that goes to a website, it's giving me the alert that this looks unsafe. Does it extend beyond that in terms of phishing emails and scams? Curious to know who's doing what in the chain of constant precautions that I'm being told? [00:00:00] S1: Anytime you're doing something on the internet in a work context, that's this whole space. And Cloudflare has a solution to that. It's a very broad market, there's a lot of competitors in here. There's probably three buckets of activity that an employee will commonly take that you need to protect. One would be you're on your work laptop or your work network and you're visiting an outside public website. And you want to make sure that the traffic going in and out of your work environment to the public internet is safe and secure. The second type would be you're working just with your internal apps. You're checking Salesforce, you're checking ServiceNow, things like that. So you need to make sure that you're actually approved – and this is that zero trust – approved to view each app. And then maybe there's different policies on what you can view. And then the third bucket is, I guess, all the adjacent things with that. The email security is one, protecting against phishing attacks and things like that.
· Matt Reustle
[00:00:00] S0: I've definitely experienced where being on-prem, I can use certain apps even, but once I'm off-prem, I'm mobile or on my own device, there are certain restrictions on what I can access. For good reason. I have some sense of how they've evolved pretty naturally from being that external third-party guard dog of sorts to also protecting from the inside. Would you point to anything else just in terms of the evolution or what they've rolled out that was key or monumental in terms of the development of the overall business and what they offered?
· Sam Eden
[00:00:00] S1: This is a continual evolution that all companies are going through is – your corporate environment used to just be your on-prem network, but now everything's cloud-based. You can work from home. You can work from anywhere. The corporate perimeter or security perimeter is effectively the whole internet. That's why they can fit nicely in there and provide those services. They realized that with their hardware system and their single global network, they could expand from web services to corporate security. The way they did that was building a lot of the software themselves. To be able to provide these services at a global scale, they often had to build a lot of their own software. They couldn't rely on AWS, for example. No one else could handle their scale, and they wanted to have really strong security. What that meant is they have this proprietary software stack. That leads to their next product evolution, where they realized that if you can build Cloudflare using these internal tools that we've built ourselves, then other developers will be able to build really powerful products with these tools as well. So they started offering these services to the developer market. So these include things like cloud storage, lightweight databases, video services, and their flagship product in this – what's called Act 3 – is the Cloudflare Workers. So that's a serverless function service. And they specialize in lightweight containers, lightweight functions that can be spun up and spun down really quickly to solve bite-sized tasks.
· Matt Reustle, Sam Eden
[00:00:00] S0: And are these developers working within corporations where what Cloudflare is building off the shelf needs to be maybe expanded upon and they're incorporating it there? Or is it separate from the enterprise corporate type clients and it's developers that are building some unique product and then selling it themselves to a different audience? [00:00:00] S1: It's currently quite separate. You don't have to use these products together. You can just be a developer building a weekend hobby project and you want to use the Cloudflare serverless functions. That's a totally valid use case. They're working to bring the products together into a more unified experience, but they don't need to be. You can use these Cloudflare developer products on anything really. [00:00:00] S0: The developers, I assume, are then paying Cloudflare some software costs to use that?
· Matt Reustle, Sam Eden
[00:00:00] S0: The developers, I assume, are then paying Cloudflare some software costs to use that? [00:00:00] S1: That's right. So similar to other cloud models, I'd say from the hyperscalers, their developer products follow a usage-based pricing model. So the more you use, the more you pay. But similar to the early products, they have a very generous free tier because they really want to attract that long tail of developers and then bring that into the enterprise, which is what they're doing at the moment. So there's over 3 million developers building using these Cloudflare developer products. A lot of them would be building quite sophisticated functions just within their free tier. To give a sense of how generous this free tier is, I think with their Workers serverless functions, you can query that up to 100,000 times a day. Their storage is 10 gigabytes per month with zero egress fees, which is dramatically cheaper than a lot of the alternative developer products. [00:00:00] S0: Can you just give an example of what a developer might build with the tools, just to give a sense of what a tangible example might be?
· Matt Reustle, Sam Eden
[00:00:00] S0: Can you just give an example of what a developer might build with the tools, just to give a sense of what a tangible example might be? [00:00:00] S1: Cloudflare Workers are best for quick functions that need to be done close to the user. Maybe one quick example would be that if you're loading a website, you might have a quick Workers script that changes the local pricing or changes the local language based on where that web page is loaded. That's done at the edge. So it's faster than querying, say, a central database to generate the page from scratch. The way to conceptually think about these Workers is anytime you can take a task and put it into bite-sized functions, it's good for that just because they spin up so quickly and then turn themselves off. It is a slightly different way of thinking because you're deploying again to the single global network. If you deploy a function to AWS, you might put that on the US East servers, so it lives there. So if you call that function, you have to travel there. Whereas with Cloudflare, if say you're building an app in New Zealand, you deploy a function immediately in London, someone can query that website and that same function is served from that London server at the edge. Everything gets propagated around really quickly, which is just another benefit of this single global network that they've built.