Cloudflare has become the latest company to extend the lifespan of its server hardware.
During the company’s Q4 2023 earnings call this week, the Content Delivery Network (CDN), security, and Edge computing company said it will save millions of dollars by adding a year to the operational lifespan of its data center IT kit.
“With the evolution of the composition of our infrastructure, we undertook an assessment of the useful lives of our service and network equipment,” said Cloudflare CFO Thomas Seifert. “In January 2024, we determined that continuous advancements in hardware technology and improvements in our data center designs have increased the efficiency in how we operate our equipment, resulting in the estimated useful lives of these assets extending from four to five years starting in fiscal 2024.”
Seifert said the company estimates the increased lifespan will save approximately $20 million for fiscal 2024.
Increasing hardware lifespans has become a regular trend amongst cloud providers and other hyperscale companies in recent years.
This quarter's round of results has seen Amazon and Google say they have saved large amounts of money this way; Amazon went from five years to six for servers and saved $900 million, while Google saved $983m extending servers to six years and networking gear to four.
Microsoft also operates hardware for six years. Meta previously ran its hardware for around four-and-a-half years, a move that was itself an increase from mid-2022. Prior to that, it estimated a four-year useable life.
Back in 2020, all four companies operated servers with a lifespan of just three years.
Cloudflare rolls out GPUs globally
In its earnings results this week, Cloudflare’s fourth-quarter revenue totaled $362.5 million, increasing 32 percent year-over-year; GAAP net loss was $27.9 million, compared to $45.9 million in the fourth quarter of 2022.
Fiscal year 2023 revenue totaled $1.3 billion, an increase of 33 percent year-over-year. GAAP net loss was $183.9 million compared to $193.4 million for fiscal 2022.
"We had an exceptionally strong fourth quarter. Our pipeline close rates, sales force productivity, average deal size, and linearity all improved markedly quarter-over-quarter," said Matthew Prince, co-founder and CEO of Cloudflare. "The machine that underlies Cloudflare is firing efficiently on all cylinders, and while the macro environment remains challenging to predict, customers continue to turn to us to connect, protect, and optimize their systems so they can gain the control they need to accelerate their businesses."
For Q1 2024, the company expects to post revenue of $372.5 to $373.5 million; for the year, that figure is $1.648 to $1.652 billion.
Last year Cloudflare said it intended to roll out Nvidia GPUs across its global Edge network. At the time the company said GPUs would be deployed in over 100 cities by the end of 2023, and "nearly everywhere Cloudflare’s network extends" by the end of 2024, the company said. It operates in data centers in more than 300 cities across the world.
During this week's call, Prince said the roll-out was going well: “These days, no earnings conference would be complete without an update on AI. As of the end of 2023, we deployed GPUs in 120 cities globally, meaningfully ahead of our target of 100 cities.”
He added: “By the end of 2024, we plan to have inference-tuned GPUs deployed in nearly every city that makes up Cloudflare 's global network and within milliseconds of nearly every device connected to the Internet worldwide.”
