There has been a lot of talk on the board previously about “network effect” in regard to CRWD. My non-techie understanding is that CRWD is the first company to do security built on the foundation of the cloud. All of the devices they defend are interconnected and they can put protection in place for all devices on their network nearly instantly when a new threat is detected. By being the first company to build up this network, they have a huge advantage over any competitors who want to try to copy their model.
The question in my mind is - is that network thesis valid? I personally think that will determine the long-term defensibility of their business. If the “network effect” is real, it’s going to make it very hard for anyone else to unseat them.
If other companies are able to replicate the network, then it becomes a little harder for CRWD to defend their business.
Long CRWD 12%