Deep Dive into Fastly’s Pricing Model

Fastly is awesome CDN that is growing by leaps and bounds. They remind me of Cotendo and EdgeCast in their early years. They’ve hired experienced Sales Engineers and Sales Reps that understand the business. CDN experience is a key requirement in winning new accounts against the Akamai’s of the world. That’s why the Cotendo sales model was successful.

Fastly has a solid product mix for an up-and-coming CDN. With millions in the bank, the next step is to accelerate the product roadmap and deliver critical features like FEO, ADN, WAF, and Rules Automation. Based on my research, the features being offered now are caching, streaming, origin shield, instant purge, and a light version of ADN. Once the new features are added, Faslty will be at the same level of Limelight, Yottaa & Akamai, product wise.

Published Website Pricing

In my opinion, publishing CDN prices on the website does more harm than good. CloudFlare, Amazon, and Godaddy publish pricing. Akamai, Limelight, & EdgeCast don’t. They thought about it long and hard, and decided against it. Unless a CDN wants to be like a CloudFlare & CloudFront, and plans to sign up tens of thousands of customers paying a few hundred dollars per year, then publish the pricing on the website. Otherwise, think twice before doing it. Below are some of the impacts of publishing CDN pricing.

Impact of Publishing CDN Pricing & Pay-as-you-go Model

1. When a CDN publishes price on the website, it handicaps the sales reps, by taking away their power to negotiate a better deal for the CDN. CDNs don’t need a robust outside sales force for this type of sale. Inside sales reps are a better fit for this type of model.

2. Why provide the competition with valuable pricing information, in which they can use against you, when competing with you in an account. Right now, just eye balling the published prices on the Fastly website, the prices seem high, and provides me with enough ammo, to counter attack and win the business in that account.

3. What if a prospective customer is price sensitive, and can only afford to pay $5,000 per month for 100TB of data transfer at $.05/GB. Once they see the $.06/GB price for 100TB of data transfer, they might click away without ever making any direct contact because it’s not in their budget.

4. With the Pay-as-you-go model, a CDN will never have secure revenue streams. A customer will be able to walk away at any time. Not securing the monthly revenue stream is not good for a CDN. Look what happened to Panther Express.

5. With the Pay-as-you-go model, a CDN is always going to have an issue with sales commission. Ultimately, the sales reps usually end up making much less. Then, once they learn the ins-and-outs of competing and winning new accounts, another CDN will come in and scoop them up, and offer them a more stable commission structure.

6. Customer A and Customer B pay $6,000 per month, for 100TB of data transfer at $.06/GB. However, Customer A requires 5 hours of calls with the pre-sales team, 15 hours of pre-sales NOC support, and many more hours supporting the client in post production. Customer B is tech savvy, and only requires a 30 min call with the pre-sales team, plus 1 hour of pre-sales NOC support, and no post production support. Should both customers pay the same rate?