Yup, precisely. They buy “capacity” ie the equivalent of making an infrastructure investment. AWS does the same.
Now, AWS chooses to price their network usage as a utility, ie, you pay per unit of data transmitted. This is ridiculous for enterprise scale.
Cloudflare uses their purchased capacity as a strategic differentiator by basically letting you use as much as you want because they have so much purchased, you wouldn’t ever make a dent.
Any services behind this differentiator are what they can charge for. Like I said above, the margins in cloud are ridiculously high. This is why these companies are amongst the few in the world valued over a Trillion dollars. Throw in an upstart who has the strategic advantage and technical competence that Cloudflare has and boy, do we have a winner . The next few years will be very interesting.
