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How Does Confluent Make Money? The Confluent Business Model In A Nutshell

Confluent is an American tech company providing real-time data access to help businesses better manage their operations. Confluent makes money by selling Confluent Cloud, a fully-managed cloud-native service for Apache Kafka. Prices ultimately depend on the size of the business and its resource-based needs.  

Confluent history and early years

The company was founded by former LinkedIn engineers Jay Kreps, Jun Rao, and Neha Narkhede in 2014.

Confluent is based on the Apache Kafka platform, an open-source distributed storage system created by the trio with a $500,000 commitment from LinkedIn. The software, which is now used by over 100,000 organizations around the world, was initially created to help LinkedIn manage the vast amounts of data associated with its real-time data feeds.

When Apache Kafka was developed in 2008, few people outside of the developer community understood what problem the platform solved. When Kreps eventually left LinkedIn in 2014 to build Confluent, he had a difficult time convincing others of his mission to build a “fully managed Kafka service and enterprise stream processing platform.” 

Undeterred, Kreps continued to build out the platform and realize his vision. Through open-source adoption, he managed to amass tens of thousands of users. As Confluent continued to gain traction, investors became more amenable to taking a stake in the company. After securing an initial round of funding, tech companies such as Twitter and Netflix became Confluent customers. Following soon after was supermarket giant Walmart, who wanted a scalable, real-time solution that could handle the trillions of consumer interactions it processed daily. 

As of March 2021, Confluent serviced approximately 2,540 clients, with 136 of those being companies on the Fortune 500 list.

Confluent revenue generation

Confluent makes money by selling its real-time data platform, with cloud-based and software-based options available.

Let’s take a look at each of these options below.

Confluent Cloud

Confluent Cloud is a fully managed cloud-native service for Apache Kafka. The service is available on Amazon AWS, Microsoft Azure, or Google Cloud.

Here, there are three options sorted broadly according to their level of functionality:

  1. Basic (free).
  2. Standard.
  3. Dedicated. 

The company notes that the Basic plan features everything a business needs to start prototyping and developing applications. As use cases evolve, the business can then move to a Standard or Dedicated plan.

Pricing for the latter two plans is ultimately determined by resource consumption and is billed monthly. The total bill is determined by desired read and write speeds, audit logs, cluster linking, storage space, and the number of partitions, among other things. To some extent, prices also vary according to the cloud provider chosen.

Confluent Platform

Confluent Platform is the software-based option that offers a complete and self-managed solution for continuously streaming data.

This product provides commercial features not available in Apache Kafka and also includes enterprise support for every component of the platform. Such components include Apache ZooKeeper and Confluent community features such as Schema Registry and REST Proxy. 

There is a 30-day free trial of Confluent Platform, after which businesses are charged according to their specific needs.

Key takeaways:

  • Confluent is an American tech company providing real-time data access to help businesses better manage their operations. The company was founded by former LinkedIn engineers Jay Kreps, Jun Rao, and Neha Narkhede in 2014.
  • Confluent makes money by selling Confluent Cloud, a fully-managed cloud-native service for Apache Kafka. Prices ultimately depend on the size of the business and its resource-based needs.  
  • Confluent also sells a standalone software version called Confluent Platform. This is an enterprise solution with a 30-day free trial for interested businesses. 

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