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When there's more then one company operating in the same space, trying to solve similar problems there's a big challenge for the investor. That's deciding where to invest? The problem becomes even trickier when both the companies seem to be doing pretty good! Finally, the problem becomes really hard to solve when it's not easily understandable how they differ in what the're offering ( with so much overlap :)).

If you've read some of my previous posts, you probably know that Cloudfare ( NET ) is a company I'm invested in. The reason for my investment is very simple... working with big data and the cloud offer many challenges like security, monitoring, analyzing. However, one of the biggest challenges of big data and cloud applications that goes a little unnoticed is...moving data around and making data and applications available from a point as near to the end user as possible ( edge computing) . That's a very costly task in both time and bandwidth. And that's precisely the problem that NET is solving with their CDN. It's said that around 10% of the world's internet traffic is moving through Cloudfare!

When things are looking real promising for NET as even more businesses are digitizing and moving to the cloud trying to reach a global audience you start noticing... Fastly (FSLY) in the rear view mirror :)

At this point I want to take a pause and thank Bear for a very insightful write-up on FSLY.
https://boards.fool.com/why-i-bought-fsly-34514084.aspx

and muji for the deep dive on Cloudfare.
https://boards.fool.com/cloudflare-net-deep-dive-34417701.as...


So what's the difference between FSLY and NET? They both seem to be CDN (content delivery network) providers. They both have DDoS (distributed denial-of-service attack) protection and their own share of raving fans.

The answer seems to lie in their primary focus:

NET: Trying to build a better Internet which is secure, fast and reliable. Cloudfare has focused on security right from the beginning ( It was in 2015 when I was researching on security of websites and stumbled upon Cloudfare). The work they do is quite incredible with data centers in over 200 cities around the world.

FSLY: Trying to redefine content delivery ( high performance). They have focused their efforts on placing fewer, more powerful POPs( points of presence ) with solid-state drive (SSD) powered servers building a blazing-fast network that requires less hardware to deliver comprehensive global reach. At 35.4 microseconds, Fastly’s environment is supposed to offer a 100x faster startup time than other offerings on the market.

Market Share: Fastly has a higher share of enterprise customers while Cloudfare has way more free users. They both have common customers like Shopify ( which shows that they can exist side-by-side).

Without going into more techspeak about how their edges work, I would like to summarize it as follows...

If I had a business with users/customers world-wide, I would go with FSLY if my users/customers would need to see any changes I made to my service instantaneously ( i.e. with the minimum amount of delay). Think about an online shopping scenario where you see an item in stock and add it to your cart and upon checkout there's a message saying it's out of stock...quite frustrating... It would be better to let the customer know about the available inventory when adding to the cart.

On the other hand, if my business was a website that has a lot of static content ( like images) that don't change too often and the content gets updated every now and then ( but not continuously), NET would be my choice. Mainly due to their focus on security.

There's also a possibility that I would use both FSLY and NET to address different parts of my business/service.

Of course pricing would be a major factor but I don't want to go into that. NET bundles a lot of security in it's offerings and also ways to save on bandwidth which I see as advantages.

Here's an example of how a company is using both FSLY and NET. These are testimonials from Shopify...

“Black Friday is one of the most important days for our merchants every year, and 2019 was the biggest of them all, with consumers around the world shopping more than ever. With the support of Cloudflare, we were able to handle the demand during this shopping season and deliver lightning-fast responses to shoppers globally."

— Charles Ng
Production Engineering Manager, Shopify



“We chose Fastly for the enhanced visibility, increased control, and ultimate flexibility. Fastly is allowing us to be more portable than any other CDN we’ve worked with.”

Dale Neufeld, Director of Technical Operations


Conclusion: Some years back when SaaS wasn't such a common term, I was engaged in moving our on-premises service to the cloud. During that time, some of my geeky friends and I used to have a lot of discussions around bottle necks surrounding big data and the cloud; challenges around security, monitoring, analyzing and specially moving and serving big data. And the companies that were actively working to solve those problems became my favorites... like OKTA, NET, DDOG, AYX and I'm invested in all of those names. Both NET and FSLY are solving some very important problems related to data and the cloud, so I added FSLY in my portfolio recently. I'm not a fan of investing in any second fiddle but it's too early for me to see who'll be the winner in this enormous market opportunity. I see a great runway ahead for both NET and FSLY.. So I've invested in both NET and FSLY and will wait and watch carefully. It's pretty early to guess who's gonna play the second fiddle.

Hope you find it helpful!

Cheers!

ron

Here's a good article: https://seekingalpha.com/article/4348980-fastly-customer-gro...
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