Cloudflare Is Inching Closer to AWS Territory

Cloudflare (NYSE: NET) does a lot more than speed up and protect websites. The company's global network, which now spans more than 330 cities around the world, puts about 95% of the global internet-connected population within 50 milliseconds (ms) of a Cloudflare data center. Cloudflare has rolled out a vast number of features, products, and services since its inception that leverage this network and remove pain points for customers.

Going after developers

Increasingly, Cloudflare is pushing deeper into the developer-services market. The company isn't a traditional cloud provider, like Amazon Web Services. While developers can spin up virtual servers and choose from hundreds of other complex products on AWS, Cloudflare has kept its focus on launching products that make developers' lives simpler.

Cloudflare Workers was one of the earliest additions to the company's developer platform. It allows developers to upload chunks of code to Cloudflare's network, putting that code close to end users.

Entire web applications can be built on Workers, and Cloudflare handles all the nitty-gritty details, like scaling. Developers don't need to concern themselves with figuring out what resources are needed or where their code should run. It just works.

Cloudflare has launched other products that integrate with Workers, including an image optimization and delivery service, various artificial-intelligence (AI) related products, and multiple database and storage solutions. A developer can build a complete application -- database and all -- on Cloudflare's platform, albeit with some limitations.

The biggest limitation is the inability to run containerized workloads. A container takes an application and all its dependencies and bundles them together in a bare-bones package, allowing the application to be run pretty much anywhere. A single virtual server can run a large number of containers, and cloud platforms like AWS offer container services. AWS' Elastic Container Service allows developers to run containers without the administrative burden of managing servers.

In cases where an application requires a third-party dependency that's not compatible with Cloudflare's Workers platform, a developer would need to look to a more traditional cloud computing provider. This lack of support for containers could be one thing holding back enterprise customers from jumping on board Cloudflare's developer platform since it doesn't quite check all the boxes.

Bringing containers to Cloudflare

Last week, Cloudflare announced that it was working on a container platform that will eventually allow customers to run containers across its global network. There's no launch date yet, although Cloudflare pointed to 2025 for wider availability beyond a small number of testers. The aim is to free developers from most of the typical concerns with running containers, including where to run them, how many to run, how many resources to allocate to them, and how to balance traffic between instances.

Cloudflare's container platform was born out of necessity. The company has been building and launching products like Workers AI and its Browser Rendering service, both of which use the container platform under the hood, as well as other Cloudflare products. The company ultimately built its own container platform, rather than use an existing solution to solve all the problems it needed to solve.

Once running containers is an option on Cloudflare's platform, the company will become a far more potent competitor to traditional cloud computing providers like AWS and platform-as-a-service providers. The PaaS market is expected to grow to more than $164 billion by 2026, and Cloudflare's container platform opens the door to more of that market.

As Cloudflare's developer platform becomes more capable and able to handle a wider variety of workloads, the company will become a bigger threat to traditional cloud providers like AWS.

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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Timothy Green has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon and Cloudflare. The Motley Fool has a disclosure policy.