CloudFlare: Protecting the Web

The billion dollar digital bouncer protecting the web and disrupting the cyber-security market. 

The world is now firmly established online, but at the same time the issue of cyber-security has become a major concern. And now an advanced new wave of cyber hacking is holding increasing power over tech companies for whom online security is both their reputation and their livelihood. One does not have to reach far for an example; in March of this year Meetup was hit by a DDoS (distributed denial of service) attack that, after attempting to extort money from the company, left Meetup’s service intermittently unavailable for a number of days.

The CloudFlare Concept

Enter CloudFlare, a cloud cyber-security service, or digital bouncer, stopping hackers in their tracks. The startup, founded in 2009 by three Harvard Business School graduates, Michelle Zatlyn, Matthew Prince and Lee Holloway with the aim to “build a better Internet”, is already seeing5% of the world’s Internet traffic pass through its servers.

CloudFlare’s primary service is to act as a virtual middle man between websites and malicious users who try to knock sites offline via scamming, spamming and DDoS attacks. CloudFlare directs all traffic to one of their 14 data centres across the world, rather than allowing it directly onto their clients’ websites. And if it identifies a user to be malicious, it slows or blocks their access, fielding requests and neutralises the threat. But if CloudFlare determines the user to be friendly, it speeds up their service.

But whilst the initial draw to CloudFlare is for these key firewall and security services, in fact the area accounts for only around 25% of its clients. CloudFlare also works to enhance website performance and infrastructure, offering advanced site-management tools such as routing, load balancing, and performance acceleration. The company also offers analytics and further ancillary services.

A Giant in the Making

Since launch, CloudFlare has grown 450% annually. Without any marketing and an only recently installed sales team, the company currently has about 2 million client websites and is adding about 5,000 new ones a day. One out of every 20 web-requests now pass through the company’s servers.

The company’s client base ranges from Fortune 50 financial services to major government agencies across the world; sites owned by the White House, and Reddit, the 17th largest site in the US, are all on CloudFlare’s books.

Indeed, as the company grows exponentially, in December 2012 it raised $50 million from backers including Union Square Ventures, New Enterprise Associates, and Venrock. Valuations put the company at $1 billion.

Appealing to the Masses

But where CloudFlare may well triumph over the dominant establishment firms like Cisco or Akamai, is that it is not just for big businesses paying millions of dollars. The company also offers a $200-a-month service, a $20-a-month service, and a free basic protection package: it offers any client on any budget the kind of services that previously only companies like Google could afford. And it is for that reason this startup has a chance to disrupt a huge and established industry.