
CloudFlare Is In Talks to Raise Funding At Near A $1 Billion Valuation - dwynings
http://techcrunch.com/2012/04/17/cloudflare-billion-valuation/
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jayp
$250,000 revenue. $1 billion valuation. W - T - F. This better be a bloody
joke.

The more I read the article, the more it seems that the article is definitely
masterful PR from CloudFare. K.M. Cutler either took the bait hook-line-and-
sinker (comparing vanity metrics for a proxy service to service sites, etc.)
or the bubble is way worse than I imagined.

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loverobots
But it's "Cloud," very different from the .com a while back. I heard it on TV
and read it in a blog.

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gojomo
Has anyone filed the ~$200K ICANN application to get the .cloud TLD going yet?

I can see the Superbowl ads already: "It's not really the cloud unless it's
_dot_ -cloud."

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moe
Is is April 1st yet again?

That's 1/6th the Akamai market cap.

You know, Akamai. That other little CDN. The one that happens to make 4000x
the revenue of Cloudflare.

Ah well, it's probably justified. Cloudflare insists they're not a CDN after
all. They only happen to offer the exact same services by accident.

~~~
dmix
Lets all wait until they actually get valued at $1 billion before getting all
excited.

This is from techcrunch and not confirmed...

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citricsquid
I've had terrible experiences with cloudflare, a fellow HN user uses it and I
constantly have problems connecting to his site (cloudflare telling me it's
down) when it's definitely up and accessible by others. I definitely see the
value in their product (idea) though.

~~~
adriand
Some big swings in the opinions on CloudFlare in this thread so far. I've used
CloudFlare on a site with low traffic and I liked the results and so I just
recommended that a publisher client who gets around 20,000 daily uniques
should use it too.

On reading some of the criticisms here, I'm concerned I made the wrong
recommendation - but at the same time, I'm also seeing comments like
"CloudFlare is fantastic". Can anyone weigh in with what I really need to know
about CloudFlare in order to ascertain if it's a good choice for my client or
not?

~~~
luigi
I used it for my low traffic personal site and thought it was great. But then
one my posts got on the front page of HN and the traffic triggered CAPTCHAs
for everyone. I dialed down the security settings and the CAPTCHAs went away,
but still, that was annoying. And tech support wouldn't own up to their
software thinking an HN spike was an attack.

Then I used it for my startup, which was using an SSL cert, and it had major
problems on launch day because of that (ugh). It continued to have SSL
compatibility issues for a week, so I've only been using it as a DNS since. As
a test, I enabled it on staging and have left it off on production. To their
credit, it seems like the SSL downtime issues have gone away.

It's been fine as a DNS, but I don't really have any desire to enable the
CloudFlare features again. I love the idea of it keeping me safe from spambots
and DDOS. At the same time, it really is a single point of failure, and it's
failed more than any other technology in my stack. And the caching layer is
way too brittle. I've set up rules to turn it off in staging.

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dragonmantank
I hate their stance toward SSL. When one of the sites on Cloudflare needed SSL
the only thing you could do was turn off caching for HTTPS.

Since then they've added an SSL service where you can get an SSL cert from
them. It only SSL's the traffic from the client to Cloudflare, not from
Cloudflare back to the server so you've still got part of your transport not
secured. I wonder how many people bought into that service without realizing
that. (You can have Cloudflare connect HTTPS back to your server, but they
still offer that partially covered option for some reason).

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brianbreslin
This article is littered with inaccurate comparisons. Getting to 400M uniques
for them is completely different than facebook or twitter. It should be better
compared to how long did it take google analytics to hit 400M uniques.

I do like the idea of what they are doing, the DDOS protection alone makes
their service worth at least $100/Month to most revenue generating sites. If
they are signing up 30k new customers per month, and 1% pay $20/month, then
you're talking about growing by $6k/revenue or more a month. compounding that
adds up. I'd be surprised if they didn't break $1-2M in revenue in 2012. (pure
speculation, no insider info. I do use their plugin on my blog)

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larrys
"Getting to 400M uniques"

It's not even 400m uniques unless you consider delivery of a cached page a
unique where the end viewer of the page doesn't even know he is served by
cloudflare. Other than hijacking the 404 pages (which would be a percentage of
the uniques) there isn't any value that I can think of to that. It's like
serving up dns queries in a way.

~~~
brianbreslin
I was thinking exactly the same thing. The value is compared to the commercial
DDOS protection services that many of these hosts offer like liquid web
<http://www.liquidweb.com/services/ddos.html> ($$$)

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sidmitra
Cloudflare is a frigging nightmare if you're outside the US and on a dynamic
ip(which includes pretty much everyone in India.) I keep having to enter a
captcha on links from HN, because a lot of people apparently use them.

Things like these(although probably helpful to the site authors) are actually
breaking the internet unfortunately.

~~~
eli
FWIW, Cloudflare lets you configure how aggressive you want it to be in
blocking "threats." The default seems a bit strong, but there's an option
labelled "essentially off"

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kevingadd
I don't think that option was there initially, at least not for the free tier.
It's nice that it's there now.

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nl
People who are looking at the revenue and think this valuation is outrageous
probably have a fundamental misunderstanding of the CDN market.

$1 billion is high, but not outrageous.

Akamai is the market leader, and currently valued at ~$7 billion. They
recently bought the most innovative player in the CDN market (Cotendo) for
$250 million.

CloudFlare may not have huge revenue, but they have something that all the
other non-Akamai CDN players would kill for: a huge, quickly growing customer
base.

Their lack of revenue is a byproduct of their freemium business model. It's
not a big problem, because CloudFlare can change the parameters in that model
at anytime, and provided they are keeping customers happy it should be a
fairly easy conversion to a paid customer.

People are used to paying for webhosting, and Cloudflare are already building
reseller agreements with companies like Dreamhost to build these relationships
further.

The biggest problem I see with CloudFlare is that they don't have strong
(any?) video CDN offerings. At the moment that isn't a big problem for them
(not many of their customers need it since most use SaaS platforms for video)
but I would imagine it is an area they are looking hard at.

~~~
moocow01
That may be true and they could have out of this world potential but I can't
think of any sector or business model where a P/S ratio of 4000 is anywhere
close to sane.

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nl
_I can't think of any sector or business model where a P/S ratio of 4000 is
anywhere close to sane._

Drug dealers, if you measured the P/S ratio right after they have given out
that first, free hit :)

Seriously, though: that's how freemium business models work. They deliberately
delay revenue to build adoption.

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cypherpunks01
I can't speak much for Cloudflare's CDN features, but they're one of the best
free DNS providers I've ever come across - Anycast, web management, and API-
wise. I use them mostly for that.

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james33
I'm surprised at a lot of the negative posts about CloudFlare. We serve around
100 million impressions monthly through CloudFlare, and have been doing so for
the past year with no issues.

~~~
robryan
The negative posts don't seem to be directed at the company, which probably is
a solid company doing great things. Just the crazy $1 billion dollar valuation
figure being thrown around.

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decadentcactus
I've also had issues with CF. Saying the site is down while I'm logged into
the server. Does anybody have any solid alternatives to the bot blacklist? It
gets hard to keep up with htaccess ip blocks, and it's more or less all I'm
using it for now (apart from DNS which can be changed anyway).

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larrys
The other thing to realize about cloudflare is unless you play with your
apache logs any hits coming in will show cloudflare Ip's as accessing pages as
opposed to the end users. There are workarounds for this (if you know enough
to play with apache etc. config) but the default state when you sign up gives
you the cloudflare ips.

<https://www.cloudflare.com/wiki/Log_Files>

~~~
xxdesmus
That's how any proxy service works. It's not just CloudFlare.

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slig
I've been using CF for a few months, and thus far it's been great: I use it to
server static files and my bandwidth bill is 100 USD cheaper. I host on
linode, and their bandwidth is pretty expensive.

Few users complained about being blocked. I contacted the support, but their
answers didn't solve my problem. Finally, I figured out how to add my country
to the "trust list" and never heard about blocks ever since.

~~~
arn
Seems likely that there are other users that are blocked and never complain,
and just leave.

I had similar problems with blocked users and site-is-down false positives, so
I had to drop it.

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antihero
Did anyone else originally hear about them because the lulzsec page used them?

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blantonl
Either this is total BS or some VCs are trying to ride the Instagram wave.

What else could justify such a valuation for a Web security proxy provider?

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patrickgzill
What is the barrier to entry for CloudFlare? Putting a few servers in
different colos, buying quality bandwidth, set up BGP anycast, get the IP
Geolocation database from MaxMind. We are talking a service that could be
duplicated with open source software and about $100K to $250K investment.

~~~
pbreit
One of the least informed opinions I've seen on HN.

~~~
patrickgzill
Enlighten me... a 1U server can handle nearly 1Gbps of traffic. BGP anycast -
a solved problem. How many different locations do you need? For USA - Chicago,
NYC, WashDC, Boston, LA, Phoenix, Dallas. In Europe - Amsterdam, Frankfurt,
Berlin, London, Paris, Moscow/StPete, probably a few I have missed. Australia,
Singapore, Taiwan, HongKong. Half a rack (20U) in each location would more
than cover most, though possibly the USA would require more.

~~~
nl
<http://fastly.com> does that: Varnish on SSDs.

But Cloudflare isn't just a CDN, it has an application firewall/security thing
built in too.

That's important because suddenly you can't get away with just Varnish, and
rolling Apache+mod_security out to each node is probably insufficient as well.

Edit: fixed url, thanks.

~~~
stickfigure
CloudFlare also provides basic analytics, DNS, url rewrite rules, and a fairly
decent UI.

The idea of rebuilding it for $250k is ludicrous.

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axiom
<http://www.youtube.com/watch?v=I6IQ_FOCE6I>

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mkramlich
not a bubble, not a bubble, not a bubble, not a bubble...

no but seriously. sounds like a CDN for your static URLs and maybe combined
with a web throttler and web firewall in front of your dynamic URLs. I do see
some revenue potential there, especially in providing service to companies
with weak/no tech staff.

