34 ms·

Fastly S-1

263 points by directionless 7y ago

javiramos 7y ago
Is Fastly a competitor to Akamai?
- skrebbel 7y ago
  Yes, and to Cloudflare.
  - user5994461 7y ago
    And to MaxCDN, another second tier US competitor, like Fastly.
    - neom 7y ago
      MaxCND (awesome folks!!) got acquired by StackPath.
      - mxpxrocks10 7y ago
        aww :-) <high five>
- firebird84 7y ago
  Under the "Risks" section they specifically mention their competitors: The market for cloud computing platforms, particularly enterprise grade products, is highly fragmented, competitive, and constantly evolving. With the introduction of new technologies and market entrants, we expect that the competitive environment in which we compete will remain intense going forward. Legacy CDNs, such as Akamai, Limelight, EdgeCast (part of Verizon Digital Media), Level3, and Imperva, and small business-focused CDNs, such as Cloudflare, InStart, StackPath, and Section.io, offer products that compete with ours.
  - tyingq 7y ago
    "small business-focused CDNs, such as Cloudflare" That's an interesting statement. Supposedly, 10% of web requests on the internet route through Cloudflare. And I imagine their free tier has plenty of non-business use.
    - firebird84 7y ago
      They may be distinguishing them based on their type of customer, rather than their quantity of traffic. Other CDNs may tend to exclusively pursue much larger customers like big banks, governments, etc., while Cloudflare from my understanding is quite happy to serve the smaller market segment.
      - tyingq 7y ago
        Ahh, yes, I read it as "small, business-focused CDN" though there's no comma there. You're right..they meant focused on "small business." I suppose the dash threw me off.
        boulos 7y ago
        Fascinating, that’s because they did the dash wrong for the compound adjective. It should have been the ugly but correct “small-business-focused CDN”. If they didn’t want to double hyphenate then “small-business focused” would have been read properly by everyone. But you definitely parsed their “small[,] business-focused” correctly :).
        tyingq 7y ago
        Makes me appreciate the importance of grammar a bit more. I assumed I was reading it wrong. Thanks for sharing the detail.
JMTQp8lwXL 7y ago
I haven't looked at any other details, but Googling Fastly says this: "Fastly, Inc. is an American cloud computing services provider. Fastly's edge cloud platform provides a content delivery network, Internet security services, load balancing, and video & streaming services" Just judging by that statement, I feel they're going to be eaten by AWS, GCP, and maybe Azure. However, it seems their focus may be on creating a viable business, rather than trying to spin an open-source project into a business (e.g., Docker Cloud). We already see that Docker is losing business to people using the OSS, but paying Amazon or Google for ECR and GCR, respectively. That being said, there are some smaller somewhat related players, such as PagerDuty that seem to be off to a good start. Twilio's stock has performed well historically, too, as has Splunk. But these later companies seem to be solving problems that make them less direct competitors with the bigger players.
- lathiat 7y ago
  They are more like Cloudflare or Akamai
  - JMTQp8lwXL 7y ago
    I think I would invest in Cloudflare before this, but that'd be based on name recognition.
    - wongarsu 7y ago
      Be aware though that name recognition in the enterprise space is very different from name recognition for small businesses and startups. Fastly focuses on the enterprise space, so having no name recognition with startups isn't really relevant to them.
      - JMTQp8lwXL 7y ago
        True, it certainly highlights the "downmarket" strategy of Cloudflare (aiming for small to medium businesses).
- 7y ago
mxstbr 7y ago
> We generated a net loss of $30.9 million for the year ended December 31, 2018, and as of December 31, 2018, we had an accumulated deficit of $146.2 million. Wow, I did not think an "enterprise-y" company like Fastly could be burning that much cash on growth!
- pault 7y ago
  It says something about the industry when "only" a $30.9M annual burn rate sounds small.
  - whttheuuu 7y ago
    It is quite small though compared to potential profits.
  - wongarsu 7y ago
    The $30M is 20% their annual revenue, or 18% of their current assets. That doesn't seem out of line for a growing business, and is something you can do without Venture Capital.
- formercoder 7y ago
  It’s important to note that this is on an earnings basis. Looking at their cash flows presents a slightly better view of operations, with an outflow of 16M, though some would argue their stock based comp of 4M should be included. But it also shows a huge capex expense of almost 20M. This is clearly not just a software business and must be considered like a business that requires real PP&E.
- ArtWomb 7y ago
  It's also interesting that the $30M figure is approx their R&D spend! Underscores the importance of offsetting those startup costs with policies that promote public-private partnerships and other subsidies for innovation ;)
  - hn_throwaway_99 7y ago
    Why? Fastly will make a couple people very rich, and they seem to be doing fine without subsidies. Why should public funds go toward concentrating wealth even further?
peteretep 7y ago
I love the people behind Fastly. Congrats to Artur and the crew :-)
tyingq 7y ago
The whole "edge compute" space seems poised to do well to me. Cloudflare's edge KV store and edge server-side JavaScript are obvious, but great ideas. The wildcard seems to be the companies that own cell towers. If they build a credible edge offering, that's a moat that is hard to beat.
- reza_n 7y ago
  Edge facilities are warehouses in regional locations with excellent backbone connectivity, basically your modern datacenter. Cellphone towers can probably host a few racks, that's not a profitable business and its not "internet scale". If the regional datacenter has a 15ms ping to each tower in the region, then you have pretty good coverage.
  - useful 7y ago
    I think you underestimate what the edge will become. There are already startups trying to store your data at your house, cellphone tower, isp, etc. In ways where there is no central store or in ways that everything is eventually consistent. Computing at the edge is a very interesting topic.
    - toast0 7y ago
      Storing my data at my house makes sense, especially if upkeep of the box is relegated to the end user. Storing my data at the tower in my neighborhood, instead of a regional center seems to be a large increase in maintenance cost for a minimal decrease in latency. Accessing the tower is expensive in time, and equipment that runs at the tower is exposed to a wider variety of temperatures and RF stress than in a nice warehouse somewhere in the metro area. It's possible the right caching at towers could reduce the backhaul bandwidth requirements, but seems iffy.
    - freyr 7y ago
      Why is storage at a (space-limited) cell tower more interesting than storage/compute at the ISP or packet core (or whatever's at the other end of the backhaul)? How much latency do you think is incurred between the ISP and cell tower?
burger_moon 7y ago
Interesting that just 10 customers make up over a third of revenue for them.
- ramraj07 7y ago
  Wouldn't that be true for many companies, even AWS possibly?
  - mbesto 7y ago
    Absolutely not, 33% revenue concentration, no matter what business you are in is NOT good from an investor perspective. Super risky.
  - merreborn 7y ago
    suffice it to say: a bunch of AWS features were essentially developed for the benefit of netflix. So, while it entails some risk, ultimately, yes: it's not uncommon for a handful of customers to be the 900 lb gorillas
- lkbm 7y ago
  Judging from pages 4-5, I'm guessing these include NYT, New Relic, Ticketmaster, Alaska Airlines, Spotify, and Github. They mention other cloud platforms as competition, and Azure has a CDN. I doubt Github would switch anytime in the near future, but the dangers posed to smaller companies by the consolidation under giants is interesting. What happens when your competitor doesn't just try to steal your clients, but can actually just acquire them? They also mention one risk as their dependence on AWS, a competitor, and that if all the cloud providers blackballed them, they'd be in trouble.
  - SteveNuts 7y ago
    I think if Amazon hasn't kicked a competitor like Netflix off of their platform, Fastly has little to worry about.
    - 7y ago
celestialcheese 7y ago
From 2017 to 2018, they added 147 new paying customers. Of which, 57 were enterprise and based on their metrics claiming > 80% of revenue was from these "enterprise" deals, probably high dollar. Still, ~$50m in marketing/advertising spend to earn 147 new paying customers (340k/customer) seems high to my untrained eye. Do those enterprise deals and that "132% Dollar Expansion Rate" justify such high CPA? Those with experience with this kind of enterprise-focused company - is this normal?
- ec109685 7y ago
  Those enterprises are re “-occurring revenue, so I am sure their LTVs are factored in with the spend.
  - dsfyu404ed 7y ago
    Depends. If you don't get the "whole enterprise" the part of the enterprise you got could be easily lost because of a top down "everybody is going to use X" or "why do we have Y different vendors for Z?" type of situations.
    - fasteddie 7y ago
      Sure, but that's factored into LTV calculations. If the average customer lasts 5 years before they churn because "Everyone is using X", then you get 5 years of recurring rev off that marketing spend.
  - merreborn 7y ago
    And their biggest enterprise customers are paying fastly at least 6 figures annually
- taytus 7y ago
  >~$50m in marketing/advertising spend to earn 147 new paying customers (340k/customer) seems high Without knowing the ROI it's really impossible to know if this is high or not. Spending $1 to make $2 is always the right decision.
speeq 7y ago
Interesting that Brexit uncertainty is in their risk factors: > These developments, or the perception that any of them could occur, have had and may continue to have a significant adverse effect on global economic conditions and the stability of global financial markets, and could significantly reduce global market liquidity and limit the ability of key market participants to operate in certain financial markets. In particular, it could also lead to a period of considerable uncertainty in relation to the UK financial and banking markets, as well as on the regulatory process in Europe. Asset valuations, currency exchange rates, and credit ratings may also be subject to increased market volatility.
- huac 7y ago
  basically legally required for anyone doing business in europe/UK to add that boilerplate
moderation 7y ago
via https://twitter.com/justincormack/status/1119217911380545536 https://twitter.com/justincormack/status/1119217911380545536 interesting to see some technical detail in the S1 including a likely reference to WASM, WASI and Lucet [0]. "Moreover, our platform is highly technical and complex and relies on the Varnish Configuration Language (VCL). Potential developers may be unfamiliar or opposed to working with VCL and therefore decide to not adopt our platform, which may harm our business." "We will continue to work on open source projects, which will empower developers to build applications in multiple languages, and run them faster and more securely at our edge" [0] https://github.com/fastly/lucet/ https://github.com/fastly/lucet/
- slivanes 7y ago
  I was tasked to integrate Fastly into our infrastructure having not done any configuration with Varnish (VCL) before. ~10k req/s VCL can be challenging for complex flow control (IMO), but it is made easier with Fastly enhanced/custom VCL modules. Their documentation was good, and the Fastly support team was excellent. Their sales engineers gave us a baseline configuration that suited our needs and were quick to answer any followup questions. Haven't noticed any downtime or response delays to date.
  - greenleafjacob 7y ago
    Check out this flow diagram for Varnish 2 [1]. [1] http://www.kalenyuk.com.ua/wp-content/uploads/2009/12/varnish-2.0.4-flow.jpg http://www.kalenyuk.com.ua/wp-content/uploads/2009/12/varnis...
tedk-42 7y ago
/* Work for a Media Company */ We're looking to move one of our sites off Akamai mostly for costs reasons. Fastly configuration in Varnish VCL - Senior Engineers from my company highly rate Varnish as a cache software so Fastly was an easy choice. I believe Akamai have been our CDN from the start. The amount of reconfiguration we'd need to do to get everything off would create a huge number of tickets in our work queue. The primary advantage of Akamai has been the number of datacenters they have to service our traffic. A customer can be in remote Australia and have their packets cached in a datacenter in the nearby telephone exchange. That's the reach of Akamai that AWS and Fastly can't compete with. Their WAF and Bot detection products are also very good. They are a definitely an enterprise/full service CDN provider. I definitely wouldn't call them 'legacy' by any means but the type of service they provide is so different to a new player like Fastly.
- tomschlick 7y ago
  I'm curious how Cloudflare would compare? Did you evaluate their products?
  - sdan 7y ago
    Curious too. I may be bias, but I genuinely like Cloudflare and all there products, because they simply work and work good.
  - tedk-42 7y ago
    I'm a fan for personal use but from what I saw, you need to switch your DNS over to them before you can begin to use their CDN. Unsure if this applies to their enterprise product... I'm not sure why it wasn't given more attention. Their version of lambda/serverless looks interesting
- xfitm3 7y ago
  Fastly’s major advantage is near instant CDN config changes, where Akamai can take an hour to push a new cdn config.
  - 7y ago
deleted 7y ago
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godelmachine 7y ago
May I ask how can I download this in PDF?
- omarchowdhury 7y ago
  File > Print > Select 'Save as PDF' under Destination.
tylermenezes 7y ago
As a user, Fastly is really, really good. Akamai is the only serious competitor, but they are a lot more traditional in their sales and configuration. (You can theoretically use Azure as a middleman as some have pointed out, but they don't support custom SSL, and configuration changes take literally hours-to-days to propagate.) Cloudflare is fine but they are still an order of magnitude slower, which is why we switched. I just tested and Cloudflare is still taking 48ms their own DNS server to resolve our Cloudflare-hosted DNS, but only 14ms for Fastly to establish a connection and send the first byte. That speed does make a difference. When we switched from Cloudflare to Fastly we had about a 7% increase in completed sales. I think their ROI is still too low for most small businesses, the only way that actually makes sense for us is because it's free for open source/nonprofits. But I can imagine it's a big deal for larger ones.
- mxpxrocks10 7y ago
  hi- curious about your completed sales stats. What are you selling? was it instant? was it gross top line?
  - tylermenezes 7y ago
    We sell low-cost tickets to events to largely non-technical students. On the order of 10k sales a year, so we're nowhere near enterprise scale (which is also why we couldn't use Akamai). www.srnd.org if you'd like to learn more.
- sjwright 7y ago
  I find it difficult to believe that sales would be affected by a latency drop less than one tenth of a second. How did you isolate the variables?
  - dubcanada 7y ago
    I am going to assume there is more to it then that. Even Amazon only says 100ms increments affect sales.
foobarbazetc 7y ago
Honestly, I love Fastly but wasn’t expecting this? Seems early. Maybe it’s just a good time to strike while the market is frothy.
joshua_gallardo 7y ago
This guy has compiled the breakdown of equity owned by founders at IPO, of all the recent (and some historical) IPOs: https://grph.com/d/mzo1W9QP4Mk https://grph.com/d/mzo1W9QP4Mk You'd be surprised how random these appear. I guess there's no science to it, and much more chance is involved than we would like to admit.
- jedberg 7y ago
  Be careful making assumptions from those graphs. In some cases they include employee owners and in other cases they don't. For example, for Pagerduty, one of the cofounders is missing, presumably under "Other" since he's the only cofounder that's an employee. But for Google Larry and Sergey are listed. So I'm not sure how it was decided who goes in the graph.
kyledrake 7y ago
Fastly's bandwidth prices are high to me: $0.12-$0.28/GB is 2007 rates for transit. Perhaps this is why when GitHub pages started capping bandwidth to lower limits they had also switched to Fastly? For a comparison, I pay less than $0.01/GB for a CDN right now, and the price of transit on average drops 40%/year so even that's above market rate now. A lot of people (including Cloudflare) just give it out for free, making this really a space for enterprise plays, which at their size, have the clout to push for better rates across many similar competitors, or just running their own infrastructure. I honestly just don't get the value add here. It really doesn't feel like an IPO play.
- Jgrubb 7y ago
  That's the card rate. Their bigger customers aren't paying that.
  - kyledrake 7y ago
    It's part of why I don't get it. Large companies have multiple competitors to negotiate with, driving down prices (and this does not look to change anytime soon, it's dropping 40%/year for transit). We're talking about an S-1 here. Where's that growth going to come from? Cannibalizing Akamai is not a long term IPO strategy.
    - doppel 7y ago
      At my previous job, we had Fastly as a potential new CDN provider set up against our existing CDN provider and two other new potentials. After a few rounds of calls for bids, Fastly won out. Based on my experience with the other providers they were also, by a large margin, the most modern - it felt like moving from a 2008 integration to a modern, fully RESTful API with great documentation and decent UI. This is all anecdotal, but they did combine a great technical platform with great support. If transit prices are the same or similar for all providers in that size category, they have to fight on features and support instead.
      - 7y ago
mevile 7y ago
Where I work, a website/app in the top 20 US alexa rankings, we use Fastly and it is pretty great. If I have a complaint it's that their varnish version is old. The web UI is great, the service is great. I've never had an issue with them in my many years of working with them.
- merreborn 7y ago
  Yeah they run a fork of varnish 2 with inline C disabled, and a number of custom extensions (surrogate keys, tables/dictionaries, etc.) -- as well as likely customizations to support their massively multi-tenant deployment and more Add in the necessity of porting vcl for all of their customers, and the prospect of upgrading varnish is obviously pretty daunting. I suspect they'd rather focus on their new webassembly-based configuration solution, rather than try to keep up with changes in VCL
deleted 7y ago
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Rafuino 7y ago
I'm not experienced with S-1 filings, but don't they usually include the share price targeted and amount they're looking to raise? It's blank up top on the document right now. When is that typically filled in?
- pbreit 7y ago
  Not until closer to the IPO date after investors haven been able to make an evaluation and been pitched by company and bankers. A 7x multiple on $140m in sales might suggest around $1b (divide that by # shares to get a possible share price).
  - arosier 7y ago
    Or look at Zoom's 47.7x multiple and you've got a $6.6B market cap
rsweeney21 7y ago
Is it a coincidence that there has been such a large uptick in IPOs just over 10 years after the real-estate meltdown? Or did the meltdown kill off a generation of unicorns that couldn't get funding during the crunch? It's just anecdotal evidence, but I talked to a CEO that had just closed a deal with his A round from Kliner Perkins in August or September 2008. When it came time to fund the deal, the partners at the VC firm made the capital call and the LPs couldn't fund. So Kliner Perkins called the CEO and told them they had to cancel the deal. The CEO had to make big cuts, couldn't pay rent on the building, etc. He eventually sold the company, but I wonder if it or others would have been IPOing around 2014-2015 if they had gotten the funding they needed.
- pfranz 7y ago
  I know very little about that world, but I heard Dodd-Frank made going public less appealing. The first google hit for "IPO over time"[1] shows a drop after the dot-com bubble around 2000 and not much around when Dodd-Frank got passed--but it seems surprisingly flat. Money has been really cheap since the recovery. This, plus the amount of VC money, has likely made the threshold for IPO much higher. [1] https://www.statista.com/statistics/270290/number-of-ipos-in-the-us-since-1999/ https://www.statista.com/statistics/270290/number-of-ipos-in...
- merreborn 7y ago
  https://i.imgur.com/5ZwpT7z.png https://i.imgur.com/5ZwpT7z.png Venture capital spending keeps rising. and a lot of it is coming from SoftBank https://www.recode.net/2017/10/11/16459856/softbank-biggest-venture-capital-deals-last-quarter-2017 https://www.recode.net/2017/10/11/16459856/softbank-biggest-...
ggm 7y ago
I don't use fastly on the supply side but I do use it as a consumer and the services they host that I use have good responsiveness and availability. The fastly engineers I know are nice people. They take care, they're smart and afaik they've stayed small and focussed as a group. They're active in operations groups, standards. What's not to love?
m3kw9 7y ago
How is this different than AWS?
sytse 7y ago
At GitLab we use Fastly and we’ve been very happy with their service. It was fast to implement and greatly helped to speed things up. As a fellow Commercial Open Source Software (COSS) company I think it is cool that they are based on Varnish.

Fastly S-1

263 points by directionless 7y ago

javiramos 7y ago

Is Fastly a competitor to Akamai?

skrebbel 7y ago
Yes, and to Cloudflare.
- user5994461 7y ago
  And to MaxCDN, another second tier US competitor, like Fastly.
  - neom 7y ago
    MaxCND (awesome folks!!) got acquired by StackPath.
    - mxpxrocks10 7y ago
      aww :-) <high five>
firebird84 7y ago
Under the "Risks" section they specifically mention their competitors: The market for cloud computing platforms, particularly enterprise grade products, is highly fragmented, competitive, and constantly evolving. With the introduction of new technologies and market entrants, we expect that the competitive environment in which we compete will remain intense going forward. Legacy CDNs, such as Akamai, Limelight, EdgeCast (part of Verizon Digital Media), Level3, and Imperva, and small business-focused CDNs, such as Cloudflare, InStart, StackPath, and Section.io, offer products that compete with ours.
- tyingq 7y ago
  "small business-focused CDNs, such as Cloudflare" That's an interesting statement. Supposedly, 10% of web requests on the internet route through Cloudflare. And I imagine their free tier has plenty of non-business use.
  - firebird84 7y ago
    They may be distinguishing them based on their type of customer, rather than their quantity of traffic. Other CDNs may tend to exclusively pursue much larger customers like big banks, governments, etc., while Cloudflare from my understanding is quite happy to serve the smaller market segment.
    - tyingq 7y ago
      Ahh, yes, I read it as "small, business-focused CDN" though there's no comma there. You're right..they meant focused on "small business." I suppose the dash threw me off.
      - boulos 7y ago
        Fascinating, that’s because they did the dash wrong for the compound adjective. It should have been the ugly but correct “small-business-focused CDN”. If they didn’t want to double hyphenate then “small-business focused” would have been read properly by everyone. But you definitely parsed their “small[,] business-focused” correctly :).
        tyingq 7y ago
        Makes me appreciate the importance of grammar a bit more. I assumed I was reading it wrong. Thanks for sharing the detail.

JMTQp8lwXL 7y ago

I haven't looked at any other details, but Googling Fastly says this: "Fastly, Inc. is an American cloud computing services provider. Fastly's edge cloud platform provides a content delivery network, Internet security services, load balancing, and video & streaming services" Just judging by that statement, I feel they're going to be eaten by AWS, GCP, and maybe Azure. However, it seems their focus may be on creating a viable business, rather than trying to spin an open-source project into a business (e.g., Docker Cloud). We already see that Docker is losing business to people using the OSS, but paying Amazon or Google for ECR and GCR, respectively. That being said, there are some smaller somewhat related players, such as PagerDuty that seem to be off to a good start. Twilio's stock has performed well historically, too, as has Splunk. But these later companies seem to be solving problems that make them less direct competitors with the bigger players.

lathiat 7y ago
They are more like Cloudflare or Akamai
- JMTQp8lwXL 7y ago
  I think I would invest in Cloudflare before this, but that'd be based on name recognition.
  - wongarsu 7y ago
    Be aware though that name recognition in the enterprise space is very different from name recognition for small businesses and startups. Fastly focuses on the enterprise space, so having no name recognition with startups isn't really relevant to them.
    - JMTQp8lwXL 7y ago
      True, it certainly highlights the "downmarket" strategy of Cloudflare (aiming for small to medium businesses).
7y ago

mxstbr 7y ago

> We generated a net loss of $30.9 million for the year ended December 31, 2018, and as of December 31, 2018, we had an accumulated deficit of $146.2 million. Wow, I did not think an "enterprise-y" company like Fastly could be burning that much cash on growth!

pault 7y ago
It says something about the industry when "only" a $30.9M annual burn rate sounds small.
- whttheuuu 7y ago
  It is quite small though compared to potential profits.
- wongarsu 7y ago
  The $30M is 20% their annual revenue, or 18% of their current assets. That doesn't seem out of line for a growing business, and is something you can do without Venture Capital.
formercoder 7y ago
It’s important to note that this is on an earnings basis. Looking at their cash flows presents a slightly better view of operations, with an outflow of 16M, though some would argue their stock based comp of 4M should be included. But it also shows a huge capex expense of almost 20M. This is clearly not just a software business and must be considered like a business that requires real PP&E.
ArtWomb 7y ago
It's also interesting that the $30M figure is approx their R&D spend! Underscores the importance of offsetting those startup costs with policies that promote public-private partnerships and other subsidies for innovation ;)
- hn_throwaway_99 7y ago
  Why? Fastly will make a couple people very rich, and they seem to be doing fine without subsidies. Why should public funds go toward concentrating wealth even further?

peteretep 7y ago

I love the people behind Fastly. Congrats to Artur and the crew :-)

tyingq 7y ago

The whole "edge compute" space seems poised to do well to me. Cloudflare's edge KV store and edge server-side JavaScript are obvious, but great ideas. The wildcard seems to be the companies that own cell towers. If they build a credible edge offering, that's a moat that is hard to beat.

reza_n 7y ago
Edge facilities are warehouses in regional locations with excellent backbone connectivity, basically your modern datacenter. Cellphone towers can probably host a few racks, that's not a profitable business and its not "internet scale". If the regional datacenter has a 15ms ping to each tower in the region, then you have pretty good coverage.
- useful 7y ago
  I think you underestimate what the edge will become. There are already startups trying to store your data at your house, cellphone tower, isp, etc. In ways where there is no central store or in ways that everything is eventually consistent. Computing at the edge is a very interesting topic.
  - toast0 7y ago
    Storing my data at my house makes sense, especially if upkeep of the box is relegated to the end user. Storing my data at the tower in my neighborhood, instead of a regional center seems to be a large increase in maintenance cost for a minimal decrease in latency. Accessing the tower is expensive in time, and equipment that runs at the tower is exposed to a wider variety of temperatures and RF stress than in a nice warehouse somewhere in the metro area. It's possible the right caching at towers could reduce the backhaul bandwidth requirements, but seems iffy.
  - freyr 7y ago
    Why is storage at a (space-limited) cell tower more interesting than storage/compute at the ISP or packet core (or whatever's at the other end of the backhaul)? How much latency do you think is incurred between the ISP and cell tower?

burger_moon 7y ago

Interesting that just 10 customers make up over a third of revenue for them.

ramraj07 7y ago
Wouldn't that be true for many companies, even AWS possibly?
- mbesto 7y ago
  Absolutely not, 33% revenue concentration, no matter what business you are in is NOT good from an investor perspective. Super risky.
- merreborn 7y ago
  suffice it to say: a bunch of AWS features were essentially developed for the benefit of netflix. So, while it entails some risk, ultimately, yes: it's not uncommon for a handful of customers to be the 900 lb gorillas
lkbm 7y ago
Judging from pages 4-5, I'm guessing these include NYT, New Relic, Ticketmaster, Alaska Airlines, Spotify, and Github. They mention other cloud platforms as competition, and Azure has a CDN. I doubt Github would switch anytime in the near future, but the dangers posed to smaller companies by the consolidation under giants is interesting. What happens when your competitor doesn't just try to steal your clients, but can actually just acquire them? They also mention one risk as their dependence on AWS, a competitor, and that if all the cloud providers blackballed them, they'd be in trouble.
- SteveNuts 7y ago
  I think if Amazon hasn't kicked a competitor like Netflix off of their platform, Fastly has little to worry about.
  - 7y ago

celestialcheese 7y ago

From 2017 to 2018, they added 147 new paying customers. Of which, 57 were enterprise and based on their metrics claiming > 80% of revenue was from these "enterprise" deals, probably high dollar. Still, ~$50m in marketing/advertising spend to earn 147 new paying customers (340k/customer) seems high to my untrained eye. Do those enterprise deals and that "132% Dollar Expansion Rate" justify such high CPA? Those with experience with this kind of enterprise-focused company - is this normal?

ec109685 7y ago
Those enterprises are re “-occurring revenue, so I am sure their LTVs are factored in with the spend.
- dsfyu404ed 7y ago
  Depends. If you don't get the "whole enterprise" the part of the enterprise you got could be easily lost because of a top down "everybody is going to use X" or "why do we have Y different vendors for Z?" type of situations.
  - fasteddie 7y ago
    Sure, but that's factored into LTV calculations. If the average customer lasts 5 years before they churn because "Everyone is using X", then you get 5 years of recurring rev off that marketing spend.
- merreborn 7y ago
  And their biggest enterprise customers are paying fastly at least 6 figures annually
taytus 7y ago
>~$50m in marketing/advertising spend to earn 147 new paying customers (340k/customer) seems high Without knowing the ROI it's really impossible to know if this is high or not. Spending $1 to make $2 is always the right decision.

speeq 7y ago

Interesting that Brexit uncertainty is in their risk factors: > These developments, or the perception that any of them could occur, have had and may continue to have a significant adverse effect on global economic conditions and the stability of global financial markets, and could significantly reduce global market liquidity and limit the ability of key market participants to operate in certain financial markets. In particular, it could also lead to a period of considerable uncertainty in relation to the UK financial and banking markets, as well as on the regulatory process in Europe. Asset valuations, currency exchange rates, and credit ratings may also be subject to increased market volatility.

huac 7y ago
basically legally required for anyone doing business in europe/UK to add that boilerplate

moderation 7y ago

via https://twitter.com/justincormack/status/1119217911380545536 https://twitter.com/justincormack/status/1119217911380545536 interesting to see some technical detail in the S1 including a likely reference to WASM, WASI and Lucet [0]. "Moreover, our platform is highly technical and complex and relies on the Varnish Configuration Language (VCL). Potential developers may be unfamiliar or opposed to working with VCL and therefore decide to not adopt our platform, which may harm our business." "We will continue to work on open source projects, which will empower developers to build applications in multiple languages, and run them faster and more securely at our edge" [0] https://github.com/fastly/lucet/ https://github.com/fastly/lucet/

slivanes 7y ago
I was tasked to integrate Fastly into our infrastructure having not done any configuration with Varnish (VCL) before. ~10k req/s VCL can be challenging for complex flow control (IMO), but it is made easier with Fastly enhanced/custom VCL modules. Their documentation was good, and the Fastly support team was excellent. Their sales engineers gave us a baseline configuration that suited our needs and were quick to answer any followup questions. Haven't noticed any downtime or response delays to date.
- greenleafjacob 7y ago
  Check out this flow diagram for Varnish 2 [1]. [1] http://www.kalenyuk.com.ua/wp-content/uploads/2009/12/varnish-2.0.4-flow.jpg http://www.kalenyuk.com.ua/wp-content/uploads/2009/12/varnis...

tedk-42 7y ago

/* Work for a Media Company */ We're looking to move one of our sites off Akamai mostly for costs reasons. Fastly configuration in Varnish VCL - Senior Engineers from my company highly rate Varnish as a cache software so Fastly was an easy choice. I believe Akamai have been our CDN from the start. The amount of reconfiguration we'd need to do to get everything off would create a huge number of tickets in our work queue. The primary advantage of Akamai has been the number of datacenters they have to service our traffic. A customer can be in remote Australia and have their packets cached in a datacenter in the nearby telephone exchange. That's the reach of Akamai that AWS and Fastly can't compete with. Their WAF and Bot detection products are also very good. They are a definitely an enterprise/full service CDN provider. I definitely wouldn't call them 'legacy' by any means but the type of service they provide is so different to a new player like Fastly.

tomschlick 7y ago
I'm curious how Cloudflare would compare? Did you evaluate their products?
- sdan 7y ago
  Curious too. I may be bias, but I genuinely like Cloudflare and all there products, because they simply work and work good.
- tedk-42 7y ago
  I'm a fan for personal use but from what I saw, you need to switch your DNS over to them before you can begin to use their CDN. Unsure if this applies to their enterprise product... I'm not sure why it wasn't given more attention. Their version of lambda/serverless looks interesting
xfitm3 7y ago
Fastly’s major advantage is near instant CDN config changes, where Akamai can take an hour to push a new cdn config.
- 7y ago

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godelmachine 7y ago

May I ask how can I download this in PDF?

omarchowdhury 7y ago
File > Print > Select 'Save as PDF' under Destination.

tylermenezes 7y ago

As a user, Fastly is really, really good. Akamai is the only serious competitor, but they are a lot more traditional in their sales and configuration. (You can theoretically use Azure as a middleman as some have pointed out, but they don't support custom SSL, and configuration changes take literally hours-to-days to propagate.) Cloudflare is fine but they are still an order of magnitude slower, which is why we switched. I just tested and Cloudflare is still taking 48ms their own DNS server to resolve our Cloudflare-hosted DNS, but only 14ms for Fastly to establish a connection and send the first byte. That speed does make a difference. When we switched from Cloudflare to Fastly we had about a 7% increase in completed sales. I think their ROI is still too low for most small businesses, the only way that actually makes sense for us is because it's free for open source/nonprofits. But I can imagine it's a big deal for larger ones.

mxpxrocks10 7y ago
hi- curious about your completed sales stats. What are you selling? was it instant? was it gross top line?
- tylermenezes 7y ago
  We sell low-cost tickets to events to largely non-technical students. On the order of 10k sales a year, so we're nowhere near enterprise scale (which is also why we couldn't use Akamai). www.srnd.org if you'd like to learn more.
sjwright 7y ago
I find it difficult to believe that sales would be affected by a latency drop less than one tenth of a second. How did you isolate the variables?
- dubcanada 7y ago
  I am going to assume there is more to it then that. Even Amazon only says 100ms increments affect sales.

foobarbazetc 7y ago

Honestly, I love Fastly but wasn’t expecting this? Seems early. Maybe it’s just a good time to strike while the market is frothy.

joshua_gallardo 7y ago

This guy has compiled the breakdown of equity owned by founders at IPO, of all the recent (and some historical) IPOs: https://grph.com/d/mzo1W9QP4Mk https://grph.com/d/mzo1W9QP4Mk You'd be surprised how random these appear. I guess there's no science to it, and much more chance is involved than we would like to admit.

jedberg 7y ago
Be careful making assumptions from those graphs. In some cases they include employee owners and in other cases they don't. For example, for Pagerduty, one of the cofounders is missing, presumably under "Other" since he's the only cofounder that's an employee. But for Google Larry and Sergey are listed. So I'm not sure how it was decided who goes in the graph.

kyledrake 7y ago

Fastly's bandwidth prices are high to me: $0.12-$0.28/GB is 2007 rates for transit. Perhaps this is why when GitHub pages started capping bandwidth to lower limits they had also switched to Fastly? For a comparison, I pay less than $0.01/GB for a CDN right now, and the price of transit on average drops 40%/year so even that's above market rate now. A lot of people (including Cloudflare) just give it out for free, making this really a space for enterprise plays, which at their size, have the clout to push for better rates across many similar competitors, or just running their own infrastructure. I honestly just don't get the value add here. It really doesn't feel like an IPO play.

Jgrubb 7y ago
That's the card rate. Their bigger customers aren't paying that.
- kyledrake 7y ago
  It's part of why I don't get it. Large companies have multiple competitors to negotiate with, driving down prices (and this does not look to change anytime soon, it's dropping 40%/year for transit). We're talking about an S-1 here. Where's that growth going to come from? Cannibalizing Akamai is not a long term IPO strategy.
  - doppel 7y ago
    At my previous job, we had Fastly as a potential new CDN provider set up against our existing CDN provider and two other new potentials. After a few rounds of calls for bids, Fastly won out. Based on my experience with the other providers they were also, by a large margin, the most modern - it felt like moving from a 2008 integration to a modern, fully RESTful API with great documentation and decent UI. This is all anecdotal, but they did combine a great technical platform with great support. If transit prices are the same or similar for all providers in that size category, they have to fight on features and support instead.
    - 7y ago

mevile 7y ago

Where I work, a website/app in the top 20 US alexa rankings, we use Fastly and it is pretty great. If I have a complaint it's that their varnish version is old. The web UI is great, the service is great. I've never had an issue with them in my many years of working with them.

merreborn 7y ago
Yeah they run a fork of varnish 2 with inline C disabled, and a number of custom extensions (surrogate keys, tables/dictionaries, etc.) -- as well as likely customizations to support their massively multi-tenant deployment and more Add in the necessity of porting vcl for all of their customers, and the prospect of upgrading varnish is obviously pretty daunting. I suspect they'd rather focus on their new webassembly-based configuration solution, rather than try to keep up with changes in VCL

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Rafuino 7y ago

I'm not experienced with S-1 filings, but don't they usually include the share price targeted and amount they're looking to raise? It's blank up top on the document right now. When is that typically filled in?

pbreit 7y ago
Not until closer to the IPO date after investors haven been able to make an evaluation and been pitched by company and bankers. A 7x multiple on $140m in sales might suggest around $1b (divide that by # shares to get a possible share price).
- arosier 7y ago
  Or look at Zoom's 47.7x multiple and you've got a $6.6B market cap

rsweeney21 7y ago

Is it a coincidence that there has been such a large uptick in IPOs just over 10 years after the real-estate meltdown? Or did the meltdown kill off a generation of unicorns that couldn't get funding during the crunch? It's just anecdotal evidence, but I talked to a CEO that had just closed a deal with his A round from Kliner Perkins in August or September 2008. When it came time to fund the deal, the partners at the VC firm made the capital call and the LPs couldn't fund. So Kliner Perkins called the CEO and told them they had to cancel the deal. The CEO had to make big cuts, couldn't pay rent on the building, etc. He eventually sold the company, but I wonder if it or others would have been IPOing around 2014-2015 if they had gotten the funding they needed.

pfranz 7y ago
I know very little about that world, but I heard Dodd-Frank made going public less appealing. The first google hit for "IPO over time"[1] shows a drop after the dot-com bubble around 2000 and not much around when Dodd-Frank got passed--but it seems surprisingly flat. Money has been really cheap since the recovery. This, plus the amount of VC money, has likely made the threshold for IPO much higher. [1] https://www.statista.com/statistics/270290/number-of-ipos-in-the-us-since-1999/ https://www.statista.com/statistics/270290/number-of-ipos-in...
merreborn 7y ago
https://i.imgur.com/5ZwpT7z.png https://i.imgur.com/5ZwpT7z.png Venture capital spending keeps rising. and a lot of it is coming from SoftBank https://www.recode.net/2017/10/11/16459856/softbank-biggest-venture-capital-deals-last-quarter-2017 https://www.recode.net/2017/10/11/16459856/softbank-biggest-...

ggm 7y ago

I don't use fastly on the supply side but I do use it as a consumer and the services they host that I use have good responsiveness and availability. The fastly engineers I know are nice people. They take care, they're smart and afaik they've stayed small and focussed as a group. They're active in operations groups, standards. What's not to love?

m3kw9 7y ago

How is this different than AWS?

sytse 7y ago

At GitLab we use Fastly and we’ve been very happy with their service. It was fast to implement and greatly helped to speed things up. As a fellow Commercial Open Source Software (COSS) company I think it is cool that they are based on Varnish.