Businessmodel of CloudFlare

Customer Segments

CloudFlare has a segmented business model, with clients who have slightly different needs. Its customer groups are as follows:

• Individuals: The company offers the “Free” and “Pro” plans for general members of the public and individual professionals, respectively.
• Organizations: The company offers the “Business” and “Enterprise” plans for organizations, with the Enterprise plan offering higher levels of service. ### Value Proposition

CloudFlare offers three primary value propositions: risk reduction, performance, and convenience.

The company offers significant protection from Internet threats by providing a Website Application Firewall (WAF). It also helps prevent Distributed Denial of Service (DDoS) attacks.

The company offers a Content Delivery Network that customers can use to distribute their content worldwide, making it closer to site visitors and allowing the site load faster. Even Web pages with third party widgets and ad servers load quickly. CloudFlare does not bill for bandwidth usage, meaning even if the site becomes heavily trafficked (or suffers a DDoS attack) rates will stay the same. On average, a website on CloudFlare loads twice as fast and uses 60% less bandwidth.

The company allows users to have Free, Pro, and Business websites within one account. It also enables customers to upgrade or downgrade at any given time during a month on a per site basis. Further, it consolidates billing for all sites into a single invoice, simplifying the payment process.

Channels

CloudFlare’s main channel is direct sales, through which it acquires customers. It also markets its offerings through its website and social media pages.

Customer Relationships

CloudFlare’s customer relationship is primarily of a self-service, automated nature. Customers utilize the service through the main platform without interaction with employees. The company’s website provides a Support Center with detailed answers to many potential questions, as well as a Resources page that features white papers, case studies, and videos.

That said, there is a personal assistance component as it also offers phone and e-mail support for its users.

Key Activities

CloudFlare’s business model entails maintaining and updating its platform for its individual and organizational customers.

Key Partners

CloudFlare maintains a partner program for companies that offer website or domain services to customers. Its specific partner groups are as follows:

• Hosting Providers: The company works with managed hosting, cloud hosting, and hybrid hosting providers to help them offer CloudFare to their customers.
• Technology Integrators: The company partners with this group to offer its solution to its customers.
• Enterprise Distributors: The company works with system integrators, value-added resellers, and managed service providers who want to provide a total cloud technology stack. Specifically, it offers a solution for mobile, website, and API security and performance.
• Digital Agencies: The company works with digital agencies and web developers to provide solutions such as a content delivery network, DDoS mitigation, and a web application firewall.
• eCommerce Platforms: The company offers its eCommerce partners solutions to optimize their customers’ web properties. CloudFlare’s long list of partners includes FlexiNetworks, Gogax, Cynet, Altervista, and FastHive.

Key Resources

CloudFlare’s main resource is its proprietary software platform. It also relies heavily on its technology and customer service employees for daily maintenance and support. As a relatively new startup, it requires financing, and has raised $182.1 million in five rounds of funding from 12 investors.

Cost Structure

CloudFlare has a cost-driven structure, working to minimize expenses through significant automation and low-price value propositions. Its biggest cost driver is likely sales/marketing expenses. Other major drivers are in the areas of customer support/operations and product development.

Revenue Streams

CloudFlare has one revenue stream, the fees it charges for use of its platform. It offers the following price tiers:

• Pro: Cost is $20 per month and $5 per month for each additional website; plan features include quicker site performance, mobile optimizations, web application firewall, and real-time statistics
• Business: Cost is $200 per month per website; plan features include all Pro plan components, plus full customization, advanced DoS attack mitigation, 100% uptime guarantee, and Railgun web optimization
• Enterprise: Pricing varies (sales team must be contacted); plan features include all Business plan components, plus setup consultation, 24/7 phone support, a dedicated solutions engineer, and multi-user access