The 1 Thing Holding Cloudflare Back
Like almost every enterprise software company, Cloudflare (NYSE: NET) is finding it more difficult to sell its existing customer base on additional products. An uncertain economic environment has many companies focused on keeping costs in check.
During the first quarter, Cloudflare saw overall sales cycles get about 27% longer than in the previous 12 months. More concerningly, sales cycles for expansion deals with existing customers were 49% longer. Close rates also declined, hurting the company's growth in the quarter.
Some of this is unavoidable. The economy is the economy, and there's nothing Cloudflare can do about it. But Cloudflare is in an enviable position. Many of its products, ultimately, save customers money -- and that should be a strong pitch during tough economic times. The core content delivery network product, for example, can shift bandwidth off cloud platforms like Amazon Web Services and save customers a small fortune in egress fees.
Source Fool.com
