Cloudflare's serverless focus

Welcome to Runtime! Today: How Cloudflare is building out an interesting serverless computing platform, OpenAI proclaims 2024 will be the year of the enterprise, and the quote of the week.

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What's your function?

When trying to break into a market dominated by giants, it doesn't make much sense to compete directly with their strengths. As Cloudflare has added infrastructure services to its security and networking base over the several years, it has charted its own course.

Fresh evidence of that approach arrived this week during one of Cloudflare's traditional week-long blizzards of product launches and news updates. On Friday, it acquired two British developer-tools startups that complement its focus on serverless computing.

First was PartyKit, which had raised $2.5 million in funding to build out its open-source platform for real-time serverless app development.

• PartyKit's platform service was designed to help serverless developers build fast-twitch stateful collaboration apps without the huge development teams that created Google Docs, Slack, or Fortnite.
• One problem with traditional serverless apps built around functions and events is they were designed to be stateless, meaning that unless they are connected to a database, they don't retain any memory of what they just did before moving on to the next job.
• But stateful applications can accomplish a lot more, especially when it comes to real-time collaboration apps that have to know what multiple people are doing at any given time.
• PartyKit expands Cloudflare's work on Durable Objects, a stateful serverless development tool, by "[making] them more accessible to developers by exposing them through familiar components.," it said in a blog post.

It also acquired Baselime, which had raised a little over $2 million in funding to add observability to serverless apps.

• Observability needs no introduction at this point (but just in case), and it is quickly becoming an important part of applications running on cloud services.
• Baselime's observability product is similar to others on the market, but targeted at developers who want to build the pillars of observability into their apps from the start.
• Cloudflare plans to incorporate Baselime into its Workers serverless development platform so that apps built with those tools have observability by default.

The Big Three all offer serverless development platforms to their cloud customers, but all appear to have much larger businesses serving traditional units of enterprise computing, such as virtual machines and containers. And right now, they are obsessed with building AI tools and services that they believe will grow faster than boring old compute.

• Cloudflare isn't ignoring the AI boom, announcing the general availability of its Worker AI serverless GPU service and an integration with Hugging Face that will let customers deploy its models on Worker AI.
• But by virtue of slowly building its way into cloud infrastructure services, it has the luxury of doing things differently than the companies that defined the first decade of cloud computing.
• There's an elegance to serverless computing that has captivated developers for years but still hasn't transformed the way most corporate applications are built.
• Still, somebody is going to figure out the right formula that takes serverless computing into the enterprise mainstream, and Cloudflare seems as well positioned as anyone to make it happen.

It's business time?

Despite all the hype last year, most vendors and enterprise users of generative AI technology readily acknowledged that 2023 was a year of experimentation. That makes 2024 all that more interesting to watch as the year in which businesses figure out if everything we've been talking about for 18 months will make a real impact.

More than 600,000 people have signed up for ChatGPT Enterprise since it was unveiled last year, OpenAI's Brad Lightcap told Bloomberg this week. That's up from 150,000 that had signed up in January to train their corporate data on OpenAI's GPT-4 model, although a far cry from the 100 million people that were supposedly using ChatGPT on a weekly basis last year.

OpenAI is in a tricky place as a would-be enterprise vendor; most of its potential customers already have a business relationship with Microsoft, its benefactor and occasional competitor, and are increasingly interested in consolidating their spending across vendors. Still, like Cloudflare's potential serverless customers, there are businesses just getting started that don't have a lot of legacy tech or business relationships to nurture and might prefer going direct.

Quote of the week

“I find it very odd. I’m a fairly private person who just sits in front of the computer and hacks on code.” — Andres Freund, the Microsoft engineer who uncovered the XZ Utils backdoor, on how his life changed over the last week.

The Runtime roundup

Reuters took a long look at the market for AI training data, and how the foundational model builders are launching bidding wars for content hosted by companies like Photobucket and Shutterstock.

More than half of enterprise CXOs are ready to increase tech spending, according to a survey conducted by Battery Ventures in the first quarter.

WebAssembly is almost ready for the big time after years of promises that it will be the next big app deployment technology, according to PivotNine analyst Justin Warren.

Lambda announced that it has raised $500 million in a "a special purpose GPU financing vehicle," which feels like the kind of thing people will later cite as the top of the AI market.

Thanks for reading — see you Tuesday!