Compare moats
Up to three covered companies, band by band. Every call is a curated editorial judgment, never a disclosed figure — and every band carries its cited basis.
| Cloudflare | Hewlett Packard Enterprise | Schneider Electric | |
|---|---|---|---|
| Moat rating | wide The band is earned by a measured share gap on a hard-to-rebuild asset, not asserted. W3Techs' 17 September 2026 survey (w3techs.com/technologies/overview/proxy) puts Cloudflare in front of 25.8% of all websites, an 85.0% share of the reverse-proxy market, against Amazon CloudFront at 5.5%, Fastly at 3.0% and Akamai at 2.1% - roughly fifteen times the nearest rival. The FY2025 10-K filed 2026-02-26 describes what a challenger would have to reproduce to contest that: a network that 'spans more than 330 cities in over 125 countries worldwide and interconnects with over 13,000 networks globally', architected to 'run every service on every server in every city' - capacity and peering accumulated city by city over a decade, not bought in a quarter. The position has been monetised without margin decay: SEC XBRL fundamentals on this site show GAAP gross margin inside a 74.5-78.7% band in every fiscal year from FY2017 to FY2025 while revenue grew from $134.9M to $2,167.9M, and Cloudflare's Q4/FY2025 results release of 2026-02-10 (cloudflare.com/press/press-releases/2026/cloudflare-announces-fourth-quarter-and-fiscal-year-2025-financial-results/) reports remaining performance obligations up 48% and new annual contract value up nearly 50% year over year. What stops this being a certainty rather than a judgement: the dominant share sits in application services, while SASE and developer compute are contested by vendors the 10-K itself concedes hold 'substantially greater financial, technical, and other resources.' | narrow The FY2025 10-K describes strong but bounded advantages. On the positive side it cites ~21,000 issued and pending patents as of October 31, 2025, Hewlett Packard Labs research in AI, networking and fabrics, novel accelerators and quantum computing, a claimed 'long-term sustained market leadership in supercomputing', a global manufacturing services footprint, and a large channel/partner ecosystem. Against that, the filing names a crowded set of large incumbents in every segment (Dell, Super Micro, Cisco, Lenovo in servers; Broadcom, Cisco, Dell, IBM, NetApp, Nutanix, Pure Storage plus AWS/Google Cloud/Azure in hybrid cloud; Cisco, Arista, Nokia, Huawei, Ciena, NVIDIA, Extreme, Palo Alto, Fortinet, Zscaler and others in networking), concedes competition from 'generically branded or white-box manufacturers' in certain regions, states 'we anticipate that we will have to continue to adjust prices on many of our products and services to stay competitive', and adds that 'no single patent is in itself essential to our company as a whole or to any of our business segments'. That is a durable franchise, not a wide one. | wide In its 2025 Universal Registration Document the Group states a #1 market position in electrical distribution in each of its four end markets, plus #1 in grid and #1 in industrial data and safety, reached through a channel it sizes at more than 1.4 million contractors and electricians alongside panel builders, integrators and distributors; FY2025 closed with a record-high backlog of EUR 25,362 million and, per the CFO section, a fifth consecutive year of profitability expansion, with adjusted EBITA margin at 18.7% (+50bps organic). |
| Moat type | cost scale The FY2025 10-K states the mechanism outright, and it is a unit-cost curve rather than a user-to-user network: 'We have chosen to utilize this idle capacity to create a free tier of service which has generated substantial global scale for us. In turn, this scale makes us attractive partners for Internet Service Providers (ISPs) globally, which reduces our co-location and bandwidth costs. As our network grows, these dynamics become even more powerful.' The same section explains why the curve applies to every line rather than one: the architecture lets Cloudflare 'deploy standard, commodity hardware' and run 'every service on every server in every city', so a new product reaches 330+ cities at near-zero incremental capital. That is what lets the filing claim Workers is offered 'at prices that are highly competitive with public cloud vendors' while FY2025 GAAP gross margin still printed 74.5%. Switching costs (traffic routed through Cloudflare, DNS delegated to it) and threat-intelligence feedback from aggregate traffic sit on top, but the filing-stated primary source is cost falling as the network grows. | intangibles ip The filing's own competitive-advantage language is repeated near-verbatim for both the Server and Networking segments: 'our broad end-to-end solutions portfolio, supported by our strong intellectual property portfolio and research and development capabilities, coupled with our global reach and partner ecosystem.' It grounds that in ~21,000 worldwide issued and pending patents, decades of large-scale infrastructure engineering (it names fanless direct liquid cooling as an example), and Hewlett Packard Labs. Switching costs are the natural alternative given GreenLake consumption contracts, but the filing explicitly disclaims lock-in as a strategy: 'the cloud experience should be open and seamless across all our customers' clouds, rather than requiring customers to be locked into a cloud stack.' Accumulated engineering IP and brand, not customer captivity, is the source the document actually asserts. | switching costs The URD's own durability table assigns a Reference Service Life of 20 years to low-voltage equipment and 15 years to medium-voltage products, and the Group monetizes that installed stock repeatedly: it attributes Field Services growth to an increasing installed base, notably from Data Center, and reports recurring revenue at 79% of its agnostic-software revenues (AVEVA, ETAP, RIB), up 2 points year on year, with AVEVA ARR up +12% as of December 31, 2025. |
| Leadership | clear leader Leadership is measured, not inferred. W3Techs on 2026-09-17 records an 85.0% reverse-proxy market share against 5.5% for Amazon CloudFront and 2.1% for Akamai, and makes Cloudflare the largest authoritative-DNS provider at 18.5% of all websites versus 9.9% for the next-placed GoDaddy Group. The FY2025 10-K reports the enterprise side moving the same way - 4,298 large customers at 2025 year-end against 3,497 a year earlier and 2,756 in 2023 - and the Q4/FY2025 results release (cloudflare.com/press/press-releases/2026/cloudflare-announces-fourth-quarter-and-fiscal-year-2025-financial-results/) cites the largest annual contract value deal in company history at about $42.5M per year. The band is for the application-services core the share data covers; in SASE and in serverless compute Cloudflare is a challenger to larger incumbents, and no independent placement naming Cloudflare in those markets was obtained for this profile. | co leader The filing claims specific leadership only in narrow places — 'long-term sustained market leadership in supercomputing' and 'AI-native networking leadership' after the Juniper Networks acquisition — while describing every market it serves as 'characterized by strong competition among major corporations with long-established positions and a large number of new and rapidly growing firms.' It names itself alongside, not above, Dell, Super Micro, Cisco and Lenovo in data-center infrastructure and alongside Cisco, Arista, Nokia, Huawei and NVIDIA in networking, and frames AI data-center networking as a market it 'aims to capture' rather than one it holds. One of a handful of scaled incumbents, not the clear leader. | clear leader The URD's end-market pages report #1 positions in electrical distribution across all four end markets, #1 in grid, #1 in industrial data and safety, and the most complete data-center portfolio including liquid cooling. These are the Group's own stated positions rather than a third-party ranking, and the same document names ABB, Legrand, Siemens, Eaton, Emerson, Honeywell, Johnson Controls, Rockwell Automation, Fuji Electric, Mitsubishi Electric and Yokogawa as the peer panel it is benchmarked against for TSR, a panel its compensation policy characterizes as business competitors. |
| Pricing power | moderate Evidence cuts both ways, which is why this is not the top band. For it: GAAP gross margin has never left a 74.5-78.7% band across FY2017-FY2025 (SEC XBRL fundamentals on this site) even as revenue compounded 16x, and the Q4/FY2025 results release (cloudflare.com/press/press-releases/2026/cloudflare-announces-fourth-quarter-and-fiscal-year-2025-financial-results/) shows customers committing more rather than less - RPO +48% year over year and new ACV up nearly 50%. Against it: FY2025's 74.5% is the lowest reading in that nine-year series, a large permanent free tier anchors the entry price, the 10-K positions Workers 'at prices that are highly competitive with public cloud vendors', and the competition risk factor warns that larger rivals can 'sell products and services with which we compete at zero or negative margins, offer fee waivers and reductions or other economic and non-economic concessions', with competitive pressure that 'may result in price reductions, fewer subscriptions, reduced revenue and gross margin'. | weak The 10-K is unusually explicit on this. It states 'We face aggressive price competition'; that competitors with a greater presence in lower-cost markets or better component allocation 'may be able to offer lower prices than we are able to offer'; that 'to maintain our competitive position, from time-to-time we take pricing actions to offer heavier than normal discounts or elect not to pass on cost increases to customers ... which has had and could have a negative impact on our financial results'; and that 'we anticipate that we will have to continue to adjust prices on many of our products and services to stay competitive.' Its AI-systems orders are called out as 'generally subject to intense competition and pricing pressure, which can have an impact on our margins', and a separate risk factor warns that failure to sustain gross margins would reduce profitability. The filing states no gross-margin trend figure in these sections; the qualitative direction it does state is defensive. | moderate Price is real but has not been covering input costs. FY2025 gross margin fell to 42.1%, down 40bps organic, with the URD stating that accelerating Q4 product pricing was insufficient to fully offset mix and raw-material cost inflation inclusive of tariffs; in the July 30, 2026 half-year release, gross pricing on products of +EUR 280 million was outweighed by a raw-material impact of -EUR 330 million and net tariffs of -EUR 104 million for a net price impact of -EUR 154 million, and the Group says it expects to be net-price positive only in H2 2026. |
| Summary | Cloudflare sells security, performance and connectivity as services delivered from one global anycast network rather than from boxes at a customer's edge. The FY2025 10-K frames the market as a consolidation away from enterprises that 'string together a diverse set of on-premises hardware boxes from different vendors' and away from 'stringing together multiple point-cloud solutions that only address specific network needs', toward one integrated provider it calls the Connectivity Cloud, and places Cloudflare as 'a leader in this Connectivity Cloud category'. The economics are unusual: idle capacity funds a free tier, the free tier buys global traffic scale, that scale makes Cloudflare a peering partner ISPs want, and peering cuts colocation and bandwidth cost - a loop the filing says 'become[s] even more powerful' as the network grows. Independent measurement confirms where that loop has already settled the market: W3Techs on 2026-09-17 shows an 85.0% reverse-proxy share and the largest authoritative-DNS footprint at 18.5% of all websites. Commercially the company ended 2025 with roughly 332,000 paying customers in more than 190 countries and 4,298 large customers, up from 2,756 two years earlier, with no customer above 10% of revenue. The contested half of the story is the growth half: the SASE platform competes with established cloud-security, email-security and SD-WAN vendors, and the developer platform competes for storage and compute against hyperscalers, markets where the 10-K's own risk factors concede rivals have greater name recognition, larger customer bases and 'more mature products and services developed for large customers'. The core is defended; the adjacencies are being fought for, and FY2025 gross margin at a nine-year low of 74.5% is the first visible cost of building GPU capacity for that fight. | HPE's FY2025 10-K positions the company around three stated megatrends — networking, cloud and AI — delivered through five segments (Server, Hybrid Cloud, Networking, Financial Services, Corporate Investments and Other), with Server products and Networking products each exceeding 10% of consolidated net revenue in fiscal 2025. Its defensibility rests on an accumulated intellectual-property and engineering base (~21,000 issued and pending patents as of October 31, 2025), a claimed sustained leadership position in supercomputing via HPE Cray EX, a full networking stack acquired with Juniper Networks in July 2025 spanning campus, data-center switching, WAN routing and SASE, and a captive Financial Services arm that funds consumption-based deployments. The same filing bounds that moat: it warns of 'aggressive price competition', notes that AI systems have historically been bought 'primarily by a small number of larger customers and cloud service providers' and that such orders are 'generally subject to intense competition and pricing pressure, which can have an impact on our margins', and lists a long roster of well-capitalized competitors in every market it serves. | Schneider sells electrification, automation and digitalization into four end markets — Data Center & Networks (30% of 2025 orders), Buildings (29%), Industry (27%) and Infrastructure (14%) — and its 2025 URD claims a #1 position in electrical distribution in every one of them, sold through an ecosystem of panel builders, integrators, distributors and more than 1.4 million contractors and electricians. Energy Management is the larger and higher-margin half: EUR 33,130 million of FY2025 revenue, 83% of the Group, up +10.3% organic at a 21.8% adjusted EBITA margin, against EUR 7,022 million and 14.2% at Industrial Automation. In the July 30, 2026 half-year release the Data Center end-market continues to lead growth: Systems, 35% of Q2 revenues, grew +28% organic with prefabricated solutions, cooling technologies and 3-phase UPS all seeing significant growth. |
| Chain position | Cloudflare sits between end users and whatever hosts the application - origin data centre, public cloud or SaaS - so it is a control layer in front of infrastructure rather than infrastructure a workload runs on, which the 10-K argues is the point: customers 'concerned about being locked in to any one public cloud provider' want policy enforced by 'an independent and integrated services provider'. Two AI-era roles follow from that position. As a supplier, the filing describes 'ongoing deployment of graphics processing units (GPUs) across our global network of servers' behind Workers AI, Vectorize and AI Gateway, putting inference next to the user instead of in a region. As a gatekeeper, the application-services suite now exists in part to 'easily identify, block and control access from AI crawlers and AI agents and operators' and underpins announced efforts to let content creators monetise how those crawlers reach their work - which makes Cloudflare a toll point between AI model builders and the open web. | Downstream AI-infrastructure integrator and networking supplier: HPE assembles and sells the AI servers and rack-scale systems (ProLiant, Cray EX/XD), turnkey AI-factory stacks (HPE Private Cloud AI) and the data-center/AI networking fabric that sit between silicon vendors and enterprise, sovereign and cloud-service-provider buyers. The AI exposure is central rather than incidental — the filing's strategy section, a dedicated AI risk factor and the AI-systems order-concentration disclosure all address it — but HPE is a buyer of accelerators and components, not a designer of them, and it names NVIDIA as a competitor in networking rather than only as a supplier. | Supplies the power and cooling layer beneath AI compute: Data Center & Networks was 30% of 2025 orders, a market the URD places on a market CAGR above 10% from 2025 to 2030. |
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| Long-horizon vote | +0.38 at weight 0.20 · swarm neutral Editorial prior, not backtested. | +0.05 at weight 0.20 · swarm neutral Editorial prior, not backtested. | +0.38 at weight 0.20 · swarm neutral Editorial prior, not backtested. |