The TAM is definitely substantial, and IMO Cloudflare can become a top 4 cloud provider. They’re building a cloud network just like the big three, except they’re starting from the network layer and moving into storage and compute. The other clouds started from storage and compute, with networking either an afterthought or a price gouging mechanism that allows oversubscribing compute.

Cloudflare can move into the storage and compute market without changing their business model. Whereas AWS/GCP/Azure cannot suddenly reduce bandwidth prices or offer unmetered networking packages, because their business model depends on using bandwidth pricing to extract high margins.

From a practical perspective, as a developer building an app, Cloudflare has a lot to offer that the other clouds do not. Their new services are developer-friendly, built around modern ideals, and run on a global network. For certain workloads there is a clear argument in favor of choosing Cloudflare over one of the “big three.”

Yes, I see the stock is down. It reminds me of 2015 when AWS was still part of Amazon, and any developer could clearly see that the entire industry was using AWS. And yet Morgan Stanley published 30 page PDF analyses of Amazon’s business without a single mention of AWS. That’s when I learned that Wall Street investors don’t know wtf they’re talking about, which makes sense if you’ve ever met one. Cloudflare looks like a good buy to me.