Backblaze is unprofitable and publicly traded, a combination which cant last forever. They raised B2 prices 20% last year, I wouldnt be surprised to see more increases if they continue to burn through cash.
Cloudflare practically has a stranglehold on the modern Internet. I would bet money they would be immediately profitable if they killed their free tier. There aren't that many competitors, and I don't know if they've got the spare capacity to absorb all the exodus.
I'm not so sure about Backblaze. I don't even think they're the biggest player in that space (AWS is, I would guess). I would guess most people could migrate off if Backblaze turned south.
if they simply streamlined their sales pipeline and created a mid tier (somewhere between $500-$2500 a month for example) that unlocks some of the features that are behind "contact sales" banner they could boost revenue without changing any existing tiers, I'd wager.
I think the platform has a ton of potential and it already shows signs of real progress, but much like fly.io, its rough edges are incredibly rough.
I don't work in enterprise sales or nothing, but it seems to me that businesses whose only price tag is "call us" are the ones with the most revenue. Transparent pricing is great for SMBs, but the big bucks are in making yourself entrenched in giant enterprises.
We sell a B2B application. We've had "call us" prices since the start as far as I know.
Yet even though we're now dominant in our sector, we've got about 50% of the revenue from a couple of dozen very large customers, and the remaining from many hundred medium and small businesses, including many single-person shops.
A key ingredient is that we have a usage-based pricing element, so what we charge a customer monthly varies with their activity. And it's primarily this element that is tweaked between customers, so that it's affordable to both small and large, while still making it profitable for us to provide the software and support.
Having such a varied income stream has been quite good for us, and has allowed us to turn down potential lucrative customers which had unreasonable demands that could have killed us, or be flexible when certain customers really struggled under corona say, so they didn't have to go to a competitor.
I used to be quite negative to "call us" pricing, but got a new perspective after I started here. That said, I prefer transparent pricing when shopping software on my own.
A few jobs ago I was looking at switching from CloudFront to CloudFlare. I was basically told to come back when I have real money to spend. They essentially said that they don't even want to work with me and my $3k/month cloudfront bill, they start at $5k.
I'm not sure about Cloudflare. Their free tier vastly reduces the barrier to entry for setting up a DDoS as a service business (without it you'd need to have very expensive hardware for circumventing DDoS attacks, as otherwise you'd get DDoS'd by your competitors). This in turn increases the demand for Cloudflare's services to protect against DDoS attacks.
I'm not saying they're good for the internet, just that if I was going to make a bet on which one is more likely to survive a decade, it'd be Cloudflare.
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.
I went to go look at Akamai's site, and I don't think either party is interested in that transaction.
Akamai doesn't look like the kind of company that wants to deal with 3,000,000 tiny accounts, and I don't think the customers will be happy with the service they get.
I guess to put it another way, do you use Cloudflare currently? If they made the free tier $5-$10/month for as many sites as you want, would you pay them or put in the effort to migrate?
I think I've got 2 sites I actually care about enough to want a CDN and DDoS protection. I would probably just pay up. I'm sure I could go somewhere else for free, but my Cloudflare setup works and I don't want to have to redo my Let's Encrypt wildcard.
The amount of profit isn't always the most important number anyway. A lot of companies choose to not be profitable while they can spend their bank account growing their business (Cloudflare is one, and Backblaze may be another but I have no idea about their finances, historically Amazon and Salesforce both did this too).
If qoq and yoy revenue keeps going up, and cost of revenue stays the same or decreases (as a percentage) in the same time period, it makes sense to spend the bank account on growth. If the growth stops, that's when you start cutting expenses like R&D and operations to get the profit. Reasoning being: getting x% of a bigger revenue is better than getting x% of a smaller revenue.
Cloudflare is cash-flow positive because a big chunk of employee compensation is paid thru the issuance of new shares (eg constantly raising more money and diluting existing owners / investors). If you include that comp as a cost they are not making money https://stockanalysis.com/stocks/net/financials/cash-flow-st...
You clearly haven't read the earnings report. In December 2023, their net income was -27.86M. The've been loosing 100M a year for a few years now. To be clear, I think this is the right move from a business perspective, I'm just saying it's a little unfair to knock backblaze without mentioning this nuance.
So is Cloudflare