Finally after all these years, the mystery behind CloudFlare is no more, as CloudFlare is on track to reach $40M in annual revenue in 2014, based on its current run-rate. They currently have 1.95M non-paying CDN customers, and 100k paying customers. If we take $40M in annual revenue and divide that by 100K customers, the average spend/customer is $400/yr (or $33/month). On the other hand, an Akamai customer spends $315k/year ($1.579B revenue / 5k customers). Now that’s a huge delta.
Company Background
- Started in 2009
- 28 POPs
- 2014 revenue run-rate is $40M
- Recorded its first cash flow positive quarter
- 1.9M non-paying customers
- 100k paying customers
- Paying customers shell out $20/month to $5,000/month
- Few customers pay $1M per year
- Average annual customer spend: $40,000,000 revenue/100,000 clients = $400/year
- Akamai annual average customer spend: $1.579B revenue / 5,000 clients = $315k
5 Year Annual Revenue Growth
- 2010 -$500k (guesstimate)
- 2011 -$1M (guesstimate)
- 2012 – $2.5 (guesstimate)
- 2013 – $9M
- 2014 – $40M (Forbes article stated 450% year over year growth which probably means 450% for two years
- 2015 (prediction) – $60M
- 2016 (prediction) – $80M
- 2017 (prediction)- $100M
Conclusion
CloudFlare is not a high flying, out of this world, demolishing the CDN competition, type of company. The numbers speak for themselves, CloudFlare is just another start-up CDN that has to work extremely hard for several more years to make it into the CDN history books. On the bright side, CloudFlare has strong name recognition globally, and garners more attention than most other CDNs, with the exception of Akamai. On a tougher note, CloudFlare needs to dramatically increase the annual average customer spend of $400/year. For every Akamai customer, CloudFlare needs about 795 customers to generate the same amount of revenue.
