There are other large CDNs like Akamai. They just don't compete with Cloudflare in the consumer sector. It probably doesn't matter for them because enterprise contracts are where all the money is at.
Great comment. Cloudflare is not a CDN. They are an edge computing platform that happens to offer CDN services. Could Akamai grow into that market faster than Cloudflare can consume it? TBD.
And to be clear - CloudFlare is hardly the only available option. Akamai has existed for significantly longer, and there's plenty of competitors. Cloudflare did not invent the CDN.
CloudFlare is neither the first nor the biggest CDN. I can't recall Akamai having a hole this big. They're either more secure or better at keeping things quiet.
I'm not sure exactly what the reason is for the equivalent market caps, but Akamai still has about 4x the revenue, net income, employee head count, so it seems like a perfectly viable CDN. I don't personally have a choice with what I'm working on. I work for the Air Force, and they use Akamai.
Not advocating one or the other. Everything has outages. But Cloudflare is clearly not the only option out there. I think they just seem like it in solo dev/startup spaces like this because they have historically had the most extensive free tier in their industry sector.
As a business they absolutely are not going to stay in the CDN lane as a primary.
Akamai has $3b in sales and an $18b market cap.
Cloudflare has $348m in sales and an $10.8b market cap.
Akamai is their maximum ceiling if they focus primarily on the CDN segment. Cloudflare is rapidly approaching their valuation ceiling if they stick to CDN as their core (and they'd have to start killing Akamai just to get there; the CDN business is increasingly a slower growth segment in the larger cloud industry).
Companies all around them in the cloud are growing faster, yet few are more important than Cloudflare. Zero question Cloudflare will continue to aggressively branch out, leveraging their critical positioning. In the not-so-distant future CDN will not be the center of their business. CDN is and will remain a springboard for them, a gateway drug, milk at the back of the grocery store.
Akamai is their ceiling in CDN because they have a much higher value segment of the business, representing a drastically larger share of all dollars in the CDN space. Their business is nine times the size of Cloudflare because their customers are far more lucrative.
If Cloudflare holds onto all of their already considerable number of customers, and then kills Akamai and somehow takes all of Akamai's business, the combination will be a mere 10% larger than Akamai already is now. There is your general indie ceiling in action, with all segments combined (and Cloudflare isn't going to monopolize the entire CDN business besides).
All you need to know to spot the independent CDN ceiling is that Cloudflare + Fastly + Akamai = $3.6 billion in sales (with the understanding that it's a slowly increasing ceiling, as the CDN market is still growing). The ceiling in that space for Cloudflare just can't realistically be much larger than that combined group and that's not much larger than where Akamai is already at. The only way this isn't the case, is if you project Cloudflare knocks off most competitors and takes the market (they can't, Amazon, Microsoft, Google among other giants, are standing in the way of that outcome).
It'll take Cloudflare a small lifetime to get to $3 billion in sales in the CDN space at the rate they're growing (they're adding ~$8m-$10m per quarter in growth (all of which obviously isn't CDN), so maybe it'll only take a few decades with some compounding). It took Akamai 22 years to get there with very high value customers and a pretty nice open field for many of those years.
Akamai in absolute dollar terms is growing faster than Cloudflare + Fastly combined. The CDN ceiling is actually running away from Cloudflare at present. That shouldn't be happening.
Cloudflare knows full well CDN isn't their brightest business future. It's why so much of their expansion effort is going into everything else. Given the way they price-structured their CDN from day one, Cloudflare has always known CDN was a lure and the upside was in sprawling outward from it. Come for the CDN, stay for the workers or whatever preferably higher margin thing we can sell you on. It's also why they're not interested in / worried about trying to make money on domain registrations, as with SSL before that. They'll happily murder the margins in foreign services all day long (areas where they don't compete, but there is margin to wipe out cost effectively, and with customers to lure in), so long as they can occasionally launch a new service where they have a distinct advantage and can convert their base to use it and increase total revenue per customer in the process.
What would be a better path: if Cloudflare could own a big part of Akamai's CDN business by trying to aggressively climb up the ladder from an unassailable price-value position Akamai doesn't want to go down to, like an ARM eating an Intel from the feet upward; or just leave the snoring giant alone to keeping snoozing in his enterprise tower while Cloudflare busies itself sprawling out in many directions, leveraging the volume of customers that Akamai doesn't want to (and or can't) go after because they're not viewed as lucrative enough? I think what Cloudflare can find outside of the CDN business, is likely to be more valuable than what's inside the CDN business, very long-term speaking.
And if you're Akamai and you let Cloudflare get far enough along with that sprawling (likely already too late), how about if they drop your CDN legs out from under you. Cloudflare builds out many other legs to stand on, so they flip the switch on the margin and kill the CDN market for the independents, as they were willing to do with domains and SSL. Free CDN, all tiers, all features. They can't do that today, they might be able to do it tomorrow. The CDN market becomes the SSL market, and as a totally free lure it accelerates a rush into Cloudflare's other more exclusive services (including for larger, lucrative enterprise customers). Surely this switch has been pondered inside of Cloudflare, road-mapped as a potential.
Akamai performs admirably (perhaps even better?) just that they're not as active as Cloudflare employees around these parts.
The CDN space is rife with healthy competition all around, especially with 5G around the corner, but sure, Cloudflare seems to move the quickest and probably has the strongest product vision that resonates with news.yc crowd, a lot. Nothing inherently good or bad about that: In fact, I seem to enjoy using their products as a developer more than other Cloud vendors.
I didn't suggest you did. I am simply saying that Cloudflare started with a Free plan which helped build the company. So Cloudflare took on the smaller customers by design, as evident from the Free tier of accounts.
So, by the time Cloudflare started really going after meaningful enterprises, it was a race to the bottom for Akamai if they wanted to kill off CF.
Yes Cloudflare has taken some Akamai customers, but when I was working there, it was pretty well established that we didn't directly go after existing Akamai customers. It was a losing battle for Cloudflare. Akamai had a far superior streaming service and there was no way Cloudflare could adequately compete against them in the space where Akamai retained most of their customers.
I'm not as up-to-date on the CDN wars, but I am pretty sure thats still the case. Cloudflare launched a streaming platform, but it still couldn't compete directly against Akamai. Cloudflare has decided that it wants to do everything decently in an agnostic way because it allows them to pick up a wider range of businesses vs being force to go head to head with Akamai or Fastly. Both of those providers offer similar cache response times, and in some cases are much faster than Cloudflare. So, Cloudflare tries really hard to not lock itself into fighting with CDNs directly. We viewed Amazon as a more direct competitor vs Akamai.
CloudFlare publishes their pricing. Akamai doesn't.
Dealing with salespeople is a massive PITA. They're not going to tell me anything that's not in the docs or support forums and I don't want to spend a week negotiating. I've seen many others make this point on HN over the years.
Maybe Akamai only focuses on large enterprise customers while CloudFlare also goes for the SMB market. IDK. The HN crowd seems to work at SMBs (startups included) or at companies big enough to operate their own CDN.
I think this is Akamai figuring out they need to address the self-serve market.
Akamai has 6x the edge network footprint of Cloudflare and has all the cool trendy stuff like edge workers, they just suck at selling to the developer.
I don't see how Cloudflare has a stranglehold. They've captured the bottom of the market by having low, low introductory prices and turnkey security. They have tons of huge and small competitors though. They have far less revenue than Akamai.
You could say the same thing about any CDN - Cloudfront, Fastly, Akamai, etc.
Is it right to say that the only reason Cloudflare is the forefront of this concern is because of their business model of offering the CDN for free, while the others have a much more limited free tier or service or none at all?
> Monopolistic Control of the CDN Market: Another issue is the monopolistic control that Cloudflare has over the CDN market. As one of the largest CDN providers...
This is a silly piece, but the claim that Cloudflare is so big that they can push sites around doesn't make sense. Not everyone has released 2022 revenue yet, but in 2021 Akamai took in $3.5B to Cloudflare's $0.66B, Fastly's $0.35B, and Edgecast's $0.29B. Then consider that while we don't have separate revenue numbers for Amazon Cloudfront, Google Cloud CDN, or Azure CDN they're all serious contenders. If Cloudflare offers you bad terms you have many other companies that want your business.
Most if not all of Cloudflare's competitors have been around longer than they have. Their contracts with governments and militaries is why they're valuable, not that nobody knows how to offer a CDN, or other services they sell. They have plenty of competition, and I don't think they lead the market with any of their products.
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