Cloudflare enters the database business

Cloudy (NYSE:NET) is best known for speeding up websites and protecting servers against massive attacks. It’s his bread and butter, and he serves those functions well. But Cloudflare does more than that.

Cloudflare rolled out Workers in 2017, a product that lets customers run pieces of code on its edge. The Pages website hosting service became available last year, and the two products are now integrated in a way that makes it easy to host an app on Cloudflare’s network.

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The missing piece of the puzzle

While it is possible to host a modern web application solely on Cloudflare’s network, there are data limitations. Cloudflare offers Workers KV, a key-value store accessible directly from its Workers product, and Durable Objects, essentially a persistent block of storage tied to a Worker. But modern web applications are often complex enough that a real database is often required.

Connecting to databases hosted elsewhere has always been a little tricky with Cloudflare Workers, although the company has worked to make it easier. However, it would be more convenient for developers if a standard relational database could be hosted directly on Cloudflare’s network.

This will soon be possible with the announcement of Cloudflare’s D1, a SQLite-based database product that runs on Cloudflare’s network and seamlessly integrates with Workers. Once D1 becomes generally available, developers will be able to easily create new databases, link them to workers, and query them efficiently.

D1 will have powerful features. Cloudflare will automatically place read-only database clones near users for faster access, syncing them as changes occur. That’s a lot of complexity that disappears for developers using D1. Backups are also automatic and pieces of code can be run right next to the database to improve performance.

Although D1 is packed with features, there are some inherent limitations. SQLite is one of the most widely used databases in the world, in part because it’s simple. Databases are stored in standard files and can be easily created with little configuration. What SQLite lacks are the advanced features found in other database software, such as a concept of users and strong security features.

Despite D1’s shortcomings, this new database product is a huge step forward for Cloudflare. Applications that need a relational database can now be run exclusively on Cloudflare, which was not possible in the past.

Compete against the cloud giants

With D1, Cloudflare is one step closer to a compelling alternative to cloud platforms such as Amazon Web Services (AWS) and Microsoft Azure. These platforms offer hundreds of products and features, but the basics are now covered by Cloudflare.

In addition to D1, Cloudflare also announced Pub/Sub, its version of a cloud-based message bus. A message bus is useful when you have many cloud services that need to interact with each other. Instead of direct communication, which introduces dependencies and complexity, each service can simply send messages without worrying about which other services will receive them.

The Cloudflare platform is very different from AWS or Azure. You cannot spin up virtual servers, which is certainly a deal breaker in many cases. But for developers who don’t want to manage infrastructure, Cloudflare becomes a better option with each new product added to the platform. D1 is the missing piece of the puzzle that removes the biggest drawback.

Cloudflare’s pace of innovation is impressive, and the company could very well become a cloud giant rivaling AWS eventually. However, the stock is still extremely expensive, so investors should weigh this growth potential against valuation before jumping in.

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