CloudFlare vs Limelight Networks and Akamai

CloudFlare, the high flying CDN with 1.5M customers, hosting 334,00 websites, supporting 250 billion page views, with 750 million unique IP addresses that touch its network, handles more traffic than Yahoo, Amazon, Instagram, eBay, AOL, and Apple combined. That’s an incredible amount of Internet firepower by any measure. For many folks, those stats are mind boggling.

But if you’re in the CDN industry, those numbers don’t mean much. There is only one number that matters: annualized MRR (monthly recurring revenue) per customer. Akamai has about one thousand customers paying them about $1.5 billion annually. CloudFlare has 1.5M customers paying them $50M-$100M annually.

Now, let’s do the math: Annual revenue / number of customers

  • Akamai: $1.5B per year/ 1,000 customers = $1.5M per customer
  • CloudFlaire: $100M per year / 1.5M customers = $67 per customer

Who’s your daddy now? That’s right, Akamai is the Big Daddy Kane in the CDN industry.  The $1.5M per customer, is mind boggling.

With this in mind, how can CloudFlare be valued at $1B, which is 4x to 5x more than Limelight Networks? That’s the math I don’t understand 🙂