Cudo is leading the way in a new marketplace, described as the “Airbnb of cloud computing.” In short, Cudo finds idle computers across the world and uses their processing power for commercial or charitable purposes.
It is estimated that nearly half of the computers on the planet are idle at any given moment, as are about 2 billion smartphones. When you add up the value of this hardware it represents over $1tn; a figure which dwarfs the $75bn which Amazon Web Services and other cloud computing providers are set to spend each year developing new, large cloud computing infrastructure.
The idea is exciting and actually quite simple: why create lots of new equipment to meet consumers’ cloud computing demands when the equipment is already here – sitting on smartphones, laptops and desktop PCs in homes and offices across the world?
A bit of background
Cudo is the creation of Matt Hawkins, who founded the business in 2017. Matt is an experienced tech entrepreneur who previously founded C4L in 2000 – a network services and data centre hosting provider which was acquired in 2016 for £20m.
Cudo was started using £2m of self-funding and launched its beta in October 2018 to a user-base of 20,000 spread across over 130 countries. From the beginning of 2019 user revenue has steadily increased from $22,000 in March to $70,000 in May.
How it works
Of course, investors are likely asking at this stage: “how does the company make its money?” In short, if any users’ hardware is used to generate a profit then Cudo takes a commission on that profit. At the moment, the percentage is set at 6.5% and soon set to increase to 10%.
Naturally, at this point, the question is likely to be: “What kinds of profits are we talking about here?” The answer depends on the type of user concerned. For instance, profits from “standard users” typically range from £0.03 to £50 per month. Larger users, however, such as server farms can produce monthly profits of £1,000.
The opportunity ahead
In 2018 the cloud computing industry was estimated at $160bn and is projected to reach $227bn by 2021. With demand for cloud computing dramatically outstripping supply (even with the top 24 infrastructure providers investing $75bn each year), Cudo is in a strong position to establish itself and grow its market share.
Sustainable competitive advantage
One of the primary attractions to Cudo for users concerns its pricing. Large, existing cloud computing providers such as Amazon AWS and AIBrain offer their services for thousands of pounds per month, making these solutions only accessible to Enterprise businesses.
Amazon’s xlarge AI resource, for instance, costs £9,000 per month. Cudo, on the other hand, can provide the same cloud computing capacity and resources for as little as $300 per month.
Cudo’s business model also allows it to position its brand effectively as an ethical, environmentally-friendly cloud computing solution. Whilst large businesses like Amazon need to pull resources out of the ground to build new, large cloud servers, Cudo leverages existing computing infrastructure to provide its service.