Tag Archives: innovation

Adjusting pricing, introducing annual plans, and accelerating innovation

Post Syndicated from Matthew Prince original https://blog.cloudflare.com/adjusting-pricing-introducing-annual-plans-and-accelerating-innovation/

Adjusting pricing, introducing annual plans, and accelerating innovation

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Adjusting pricing, introducing annual plans, and accelerating innovation

Cloudflare is raising prices for the first time in the last 12 years. Beginning January 15, 2023, new sign ups will be charged \$25 per month for our Pro Plan (up from \$20 per month) and \$250 per month for our Business Plan (up from \$200 per month). Any paying customers who sign up before January 15, 2023, including any currently paying customers who signed up at any point over the last 12 years, will be grandfathered at the old monthly price until May 14, 2023.

We are also introducing an option to pay annually, rather than monthly, that we hope most customers will choose to switch to. Annual plans are available today and discounted from the new monthly rate to \$240 per year for the Pro Plan (the equivalent of \$20 per month, saving \$60 per year) and \$2,400 per year for the Business Plan (the equivalent of \$200 per month, saving \$600 per year). In other words, if you choose to pay annually for Cloudflare you can lock in our old monthly prices.

After not raising prices in our history, this was something we thought carefully about before deciding to do. While we have over a decade of network expansion and innovation under our belts, what may not be intuitive is that our goal is not to increase revenue from this change. We need to invest up front in building out our network, and the main reason we’re making this change is to more closely map our business with the timing of our underlying costs. Doing so will enable us to further accelerate our network expansion and pace of innovation — which all of our customers will benefit from. Since this is a big change for us, I wanted to take the time to walk through how we came to this decision.

Cloudflare’s history

Cloudflare launched on September 27, 2010. At the time we had two plans: one Free Plan that was free, and a Pro Plan that cost $20 per month. Our network at the time consisted of “four and a half” data centers: Chicago, Illinois; Ashburn, Virginia; San Jose, California; Amsterdam, Netherlands; and Tokyo, Japan. The routing to Tokyo was so flaky that we’d turn it off for half the day to not mess up routing around the rest of the world. The biggest difference for the first couple years between our Free and Pro Plans was that only the latter included HTTPS support.

Adjusting pricing, introducing annual plans, and accelerating innovation
Slide from the Cloudflare Launch Presentation at TechCrunch Disrupt, September 27, 2010‌‌

In June 2012, we introduced our Business Plan for $200 per month and our Enterprise Plan which was customized for our largest customers. By then we’d not only gotten Tokyo to work reliably but added 18 more data centers around the world for a total of 23. Our Business plan added DDoS mitigation as the primary benefit, something prior to then we’d been terrified to offer.

Adjusting pricing, introducing annual plans, and accelerating innovation
Cloudflare’s Network as of June 16, 2012, courtesy of The Internet Archive’s Wayback Machine‌‌

My how you’ve grown

Fast-forward to today and a lot has changed. We’re up to presence in more than 275 cities in more than 100 countries worldwide. We included HTTPS support in our Free Plan with the launch of Universal SSL in September 2014. We included unlimited DDoS mitigation in our Free Plan with the launch of Unmetered DDoS Mitigation in September 2017. Today, we stop attacks for Free Plan customers on a daily basis that are more than 10-times as big as what was headline news back in 2013.

Adjusting pricing, introducing annual plans, and accelerating innovation

Our strategy has always been to roll features out, limit them at first to higher tiers of paying customers, but, over time, roll them down through our plans and eventually to even our Free Plan customers. We believe everyone should be fast, reliable, and secure online regardless of their budget. And we believe our continued success should be primarily driven by new innovation, not by milking old features for revenue.

Adjusting pricing, introducing annual plans, and accelerating innovation

And we’ve delivered on that promise, accelerating our roll out of new features across our platform and bundling them into our existing plans without increasing prices. What you get for our Free, Pro, and Business Plans today is orders of magnitude more valuable across every dimension — performance, reliability, and security — than those plans were when they launched.

And yet we know we are our customers’ infrastructure. You rely on us. And therefore we have been very reluctant to ever raise prices just to take price and capture more revenue.

Annual plans for even faster innovation

Early on, we only charged monthly because we were an unproven service we knew customers were taking a risk on. Today, that’s no longer the case. The majority of our customers have been using us for years and, from our conversations with them, plan to continue using us for the foreseeable future. In fact, one of the top requests we receive is from customers who want to pay once per year rather than getting billed every month.

While I’m proud of our pace of innovation, one of the challenges we have is managing the cash flow to fund those investments as quickly as we’d like. We invest up front in building out our network or developing a new feature, but then only get paid monthly by our customers. That, inherently, is a governor on our pace of innovation. We can invest even faster — hire more engineers, deploy more servers — if those customers who know they’re going to use us for the next year pay for us up front. We have no shortage of things we know customers want us to build, so by collecting revenue earlier we know we can unlock even faster innovation.

In other words, we are making this change hoping most of you won’t pay us anything more than you did before. Instead, our hope is that most of you will adopt our annual plans — you’ll get to lock in the existing pricing, and you’ll help us further accelerate our network growth and pace of innovation.

Finally, I wanted to mention that something isn’t changing: our Free Plan. It will still be free. It will still have all the features it has today. And we’re still committed to, over time, rolling many more features that are only available in paid plans today down to the Free Plan over time. Our mission is to help build a better Internet. We want to win by being the most innovative company in the world. And that means making our services available to as many people as possible, even those who can’t afford to pay us right now.

But, for those of you who can pay: thank you. You’ve funded our innovation to date. And I hope you’ll opt to switch to our annual billing, so we can further accelerate our network expansion and pace of innovation.

Adjusting pricing, introducing annual plans, and accelerating innovation

The secret to Cloudflare’s pace of Innovation

Post Syndicated from Jen Taylor original https://blog.cloudflare.com/the-secret-to-cloudflare-pace-of-innovation/

The secret to Cloudflare’s pace of Innovation

The secret to Cloudflare’s pace of Innovation

We are 11! And we also may be a little bleary-eyed and giddy from a week of shipping.

The secret to Cloudflare’s pace of Innovation

Our Birthday Weeks are one of my favorite Cloudflare traditions — where we release innovations that help to build a better Internet. Just this week we tackled email security, expanded our network into office buildings, and entered into the Web3 world.

The secret to Cloudflare’s pace of Innovation

But these weeks also precipitate the most common questions I’m asked from my product and engineering peers across the industry: how do we do it? How do we get so much stuff out so quickly? That we are able to innovate — and innovate so quickly — is no happy accident. In fact, this capability has been very deliberately built into the DNA of Cloudflare. I want to touch on three of the reasons unique to us: one relates to our people, one relates to our technology, and one relates to our customers.

Cultivating curiosity

The seeds of innovative ideas start with our team. One of the core things we look for when hiring in every role at Cloudflare — be it engineering and product or sales or account — is curiosity. We seek people who approach a situation with curiosity — who seek to understand the what, the how, and perhaps most importantly, the why of the world around them. Innovation at its core is finding new ways to solve existing problems, and this curiosity is jet fuel for innovation. It pushes us to challenge the status quo. It is through this inquiry that we identify assumptions and unnecessary points of friction.

The secret to Cloudflare’s pace of Innovation

We turn our curiosity towards the world in front of us, the problems that “bug” us about our workflows and the business of the Internet. This is as much about innovating with code as it is about upending business models that don’t make sense to us. It frustrated us that hackers used DDoS attacks to perpetrate financial terrorism by driving up the cost of their victim’s web hosting and delivery bills, so as part of Birthday week in 2017 we made our DDoS protection free and accessible to all. Interestingly, we also have seen a correlating drop in DDoS attacks against many types of sites since then. This year we turned our attention to the egregious egress fees charged by cloud providers and delivered R2, our object storage solution which offers the ability to store large amounts of data — both expanding what developers can build on Cloudflare while slashing the egress bandwidth fees associated with cloud provider storage to zero. We also continue to expand our at-cost registrar service to more TLDs.

The secret to Cloudflare’s pace of Innovation

There’s an important attribute that partners with curiosity, however. To innovate, we listen. One of the things I screen for when we hire product managers is their ability to listen and synthesize the information they are hearing and then their ability to distill it into actionable problems for us to tackle. We ship early and often with initial concepts. We must listen closely to the feedback from customers — both what they tell us through community forums, support tickets, and meetings and through what they show us in how they adopt and use a feature — and quickly fold this back into the roadmap and the next stage of development. Like some of what you saw this week? Watch our blog for updates and new features as we round out and mature the products.

The best dog food

We like to say Cloudflare was built on Cloudflare and for Cloudflare. This means we eat our own dog food with a glass of our own champagne on the side. We wanted a way to connect with our customers and the community, so we built ourselves a real-time streaming service and launched CloudflareTV. Over the past 18 months we ironed out the kinks and this week we made that available to all of you to stand up your own network. We care deeply not only about the capabilities we deliver but how they look and feel. This focus leads to big innovations, but also leads to smaller improvements in how our tools look and feel, like Dark Mode, which was a passion project of a few of our front-end developers and one of the most requested features of all time by our own team.

The secret to Cloudflare’s pace of Innovation

So that’s an example of what happens. But how were we able to do this?

It’s driven by our Workers platform. This isn’t just something that’s making our customers’ lives easier. No containers to manage; no scaling to handle. We use it, too. It’s a layer of abstraction on top of our network that enables a massive amount of development velocity. Our unified architecture provides a single, scalable platform on which to innovate and allows us to roll things out in a matter of seconds across our entire network (and roll them back even more quickly if things don’t go to plan, which also sometimes happens). We’re constantly striving to make this network faster, safer, and more reliable. We’re constantly evolving our network to make it better. A couple of weeks ago we announced we’d expanded to 250 cities and are now within 50 milliseconds of 95% of the Internet-connected population. This week we expanded the footprint of our network into office buildings, getting even closer to end users.

The secret to Cloudflare’s pace of Innovation

This abstraction enables us to have smaller teams to build any new product or service. While others in the industry talk about building “pizza box” teams — teams small enough that they can all share a pizza together — many of our innovation efforts start with teams even smaller. At Cloudflare, it is not unusual for an initial product idea to start with a team small enough to split a pack of Twinkies and for the initial proof of concept to go from whiteboard to rolled out in days. We intentionally staff and structure our teams and our backlogs so that we have flexibility to pivot and innovate. Our Emerging Technology and Incubation team is a small group of product managers and engineers solely dedicated to exploring new products for new markets. Our Research team is dedicated to thinking deeply and partnering with organizations across the globe to define new standards and new ways to tackle some of the hardest challenges. These efforts drove our Web3 announcements and I could not be more excited to see where you all take them.

The secret to Cloudflare’s pace of Innovation

We ship software for businesses like a consumer software company. Traditional B2B software development typically follows longer development cycles and focuses on delivering more fully featured and deeply integrated offerings out of the gate. This cautious approach yields fewer more fully featured offerings shipped less frequently. Consumer software, on the other hand, is typically built in a highly iterative process — where teams develop initial concepts quickly and roll them out frequently in small pieces to subsets of users to test and understand how people use them and then use these observations to guide development. Many of the seeds that shaped the email security offerings this week started as small experiments by the DNS team, Emerging Technology, and our Customer Support team.

There’s one more aspect to all of this — because we’ve innovated in the way we’ve built our network — making it highly scalable and cost-effective — we’re able to pass these savings on to our customers. In a lot of instances, these savings amount to a pretty good price for our products and services: nothing at all.

Born to be free

Typically, in B2B enterprise software companies, the big customers and the multi-million dollar contracts get 99.99% of the focus. Here’s what I would say: our free customers are the secret sauce to our innovation. Today, millions of websites and applications  across the globe use our service for free. Free is invaluable to innovation.

One of the most difficult parts of building B2B software is getting the first 100 users. These early users are critical to assess the quality, scale, and capabilities of a product. But B2B folks are notoriously risk averse: their application or users are their lifeblood, and they aren’t necessarily willing to make them guinea pigs. They would rather sit on the sidelines and wait for someone else to go first. So when you are building B2B software, you are stuck in a conundrum — how do you get the users you need to prove out the capabilities?  We’re fortunate to have millions of free sites and applications on our network. Like a consumer app developer, we typically roll out new capabilities to pods of these users first. These users give us the volume and scale to get confident in what we’ve delivered. The more confident we get, the more broadly we roll out, such that by the time it hits broad rollout, our customers can feel confident in the quality and stability.

The large and diverse free customer base also helps fuel innovation. Through servicing a large and diverse base — from a personal blog in Bolivia to a small business in Chennai to a start-up in Munich — we observe unique traffic and threat patterns. We take these learning and fold the insights back into our product to dynamically route traffic across the fastest route and stop emerging threats before they scale.

The other thing I love about Birthday Week? It is the place critical innovations start that will ultimately transform the way we work. Universal SSL in 2014 made SSL free and available to all customers, doubling the number of active sites that use encryption within 24 hours of launch.   Seedling ideas, such as Workers, which we launched in 2017, have become the foundation of a whole new generation of applications.

I mentioned earlier that two of the most common questions I’m asked about Cloudflare relate to how we do it. Well, there’s often a third, and that too comes up quite a lot during Birthday Week. And that question is: “are you hiring?!” The answer is a resounding yes! We have opportunities across a variety of roles in Cloudflare: Legal, Product, Engineering, Sales, IT. Good ideas come from everywhere. I’d love nothing more than to engage your curiosity to help us build a better Internet.

The secret to Cloudflare’s pace of Innovation