Shares of online services specialist Cloudflare (NYSE:NET) rose 10.2% in March 2020, according to data from S&P Global Market Intelligence. This fairly modest gain was a significant achievement in comparison with the S&P 500 market index, which fell 12.5% over the same period. The coronavirus crisis might actually work out in Cloudflare's favor, as the company benefits from business operations and personal entertainment moving online.
Cloudflare introduced a new work-from-home service in January, named Cloudflare for Teams. That launch proved to be well-timed when the COVID-19 crisis ramped up in February. Furthermore, Cloudflare's online security services are in high demand because of increased bandwidth usage around the world. The company saw a 10% increase in peak internet traffic in March, led by a 30% traffic boost in hard-hit areas like Italy.
"None of these traffic changes raise any concern for us. Cloudflare's network is well provisioned to handle significant spikes in traffic," the company wrote in a blog post. "We have not seen, and do not anticipate, any impact to our network's performance, reliability, or security globally."
It's not all wine and roses for Cloudflare, of course. The company mainly serves small and medium businesses, many of which might not make it through the economic damage caused by the novel coronavirus. But in the long run, the same entrepreneurs that used Cloudflare's services in these failed businesses will come back and start a new business, leaning on Cloudflare's services once again.
That entire plot thread is still a few chapters ahead, though. For now, Cloudflare isn't suffering any structural damage from the virus crisis and may indeed come out of this downturn with a longer client list. If nothing else, this crisis is showing us how to work and play over the internet, and that's unequivocally good news for Cloudflare's long-term business prospects.