How Cloudflare Makes $2.8 Billion Running 20% of the Internet
TThe Coding Koala
Internet TechnologyBusiness NewsComputing/Software
Transcript
00:00:00If you shut down the Cloudflare right now, most of the services across the internet from social
00:00:04media apps to AI platforms and companies like Uber, Canva, Shopify, and many other services
00:00:11would be down. That's what happened on November 2025, so I am not joking. Cloudflare handles
00:00:16around 20% of the entire internet traffic, and this is not even the crazy part. A huge chunk of
00:00:22the sites and services using Cloudflare are using it completely for free. So somebody needs to
00:00:27explain how a company holding up a fifth of the internet is making billions every year
00:00:31without charging most of its users. So before we get into exactly how they make their money,
00:00:36it's worth quickly understanding what Cloudflare actually is, because it's important for the
00:00:41rest of this video. Cloudflare is basically an invisible layer sitting between you and everything
00:00:46else on the internet. So when you type in a website's address, your request usually hits
00:00:51Cloudflare first instead of going straight to that website's actual server. If you have
00:00:55a website hosted, you may not have manually signed up and used Cloudflare, but your hosting
00:01:00provider probably does. So either directly or indirectly, you may have used Cloudflare.
00:01:06So along with handling website traffic, it also takes care of internet security so you don't
00:01:10get DDoS by a guy with a ponytail. It also makes sure you don't have to wait five minutes
00:01:15to load a website because they have CDN servers all over the world. And it also provides cloud
00:01:20services for developers to run actual code directly on that global network through something called
00:01:25workers. Meaning instead of renting a server in one specific region, your code just runs
00:01:30everywhere at once. They just handle a lot of things. So these were just some main stuff.
00:01:35Now let's get into the main topic. Cloudflare earns in four major ways.
00:01:39Number one is workers. Cloudflare has a product literally called Cloudflare Workers, which is
00:01:44basically a serverless platform that lets developers run their backend code on Cloudflare's network
00:01:49without ever touching or managing a server themselves. Kind of like AWS Lambda, but unlike AWS, where
00:01:56you keep your services in few regions, it's spread across entire planet. And because that code runs
00:02:02close to the user, it can respond much faster, especially when you have users all over the world.
00:02:07And here's where the money actually comes from. Instead of paying for a server that sits idle
00:02:11most of the day, you're billed based on how much your code actually runs, the number of requests
00:02:16it handles, and the compute time it eats up. So the more your app gets used, the more Cloudflare
00:02:21makes. But this isn't what Cloudflare earns most of its money from. Now moving on to the next
00:02:26method, we've got Cloudflare Zero Trust. This is another product from Cloudflare, which is dedicated
00:02:32to security. It is a security system built around controlling exactly who can access
00:02:37what instead of just trusting everyone sitting inside a company's network. Because in the old
00:02:42school approach, if you're connected to the company VPN, you're basically trusted by default. But with
00:02:47Zero Trust, you have to actually prove who you are every single time. And this is where Cloudflare
00:02:53earns its money. Zero Trust uses seat-based pricing model, meaning companies pay per employee per month,
00:02:59almost like a subscription for every single person who needs access. So the bigger the company,
00:03:03the more seats they need covered, the bigger the check Cloudflare is caching every month.
00:03:09Moving on to the third one, we've got Enterprise Contracts. So basically, if your company needs most
00:03:14most of what Cloudflare offers all bundled together, things like networking services, zero trust,
00:03:19workers running your backend, dedicated 24/7 support, custom security rules, and a pile of other internet
00:03:26jargon all in one package. They sit down and negotiate one massive custom contract, usually locked in for
00:03:32multiple years. And that single deal alone can be worth more than thousands of small customers. And then the last
00:03:38one on our list is subscriptions, which is refreshingly straightforward. The free plan doesn't really cap you
00:03:43on traffic or anything like that, but it does cap you on features. So once your site gets big enough that
00:03:49you actually need the serious stuff, things like better bot protection, more advanced security rules, faster
00:03:55support, all of that, you start paying month to month for it, moving from a cheap little plan up to a genuinely
00:04:00expensive one depending on how big your site actually gets. So these were the four ways Cloudflare makes
00:04:06money. And since you are already this far in the video, if you paid really close attention to their
00:04:11business model, you will realize one thing. Cloudflare has a category of customers, the big ones, the ones
00:04:18paying over $100,000 a year. You'd think that's a tiny, small slice of the business considering there are
00:04:24literally millions of free and small paying users out there. But that small group of large paying customers is
00:04:30responsible for around 70% of Cloudflare's entire revenue, which means the millions of free websites are
00:04:36essentially just the marketing department. They're the proof, the trust builder, the thing that makes a giant
00:04:42enterprise company trust Cloudflare, because millions of websites already use and trust it. And once that
00:04:48enterprise signs on, they're not paying $25 a month, they're writing checks with a whole lot more zeros. And
00:04:54that's the main reason Cloudflare offers such a generous free plan. The free users help
00:04:59Cloudflare get millions of websites on its platform, build trust, and as a result, attract bigger companies.
00:05:06So I guess that's it for this video. And by the way, if you're trying to learn how to code, make sure to check out Scrimba. They have courses for everything you need to learn in order to land a job as a developer. So make sure to check it out. If you like this type of tech business content, make sure to like, share, and subscribe, and I'll see you guys in the next one.
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