Cloudflare CEO Matthew Prince joins Yahoo Finance editor-at-large and anchor Brian Sozzi to discuss key takeaways from Davos World Economic Forum 2022, the state of the global economy, and cybersecurity.
BRIAN SOZZI: All right, joining me now at the World Economic Forum is Cloudflare CEO, Matthew Prince. Matt, good to see you. And what people don't see, it's actually raining right now.
MATTHEW PRINCE: It is raining on us. I have an umbrella over there, but it'd screw up the shot. So here we are.
BRIAN SOZZI: You're a trooper. All right, so you just beamed in here to the World Economic Forum. What are some of your early takeaways?
MATTHEW PRINCE: Well, first of all, it's spring. Usually, it would be snowing, not raining. It feels a lot more casual, a little bit less intense than it does in the usual sort of January time frame. I'm usually the guy not wearing a tie. And now everyone's not wearing a tie this season.
BRIAN SOZZI: You're a trendsetter.
MATTHEW PRINCE: I don't think so. I think it's just COVID has sort of caused everyone, except you, to forget where their ties are. And but it's continued to be productive conversations. We just did a panel on cybersecurity and protecting critical infrastructure. I think that's one of the things that's top of mind of a lot of the people who are here at Davos this year.
BRIAN SOZZI: You've always kept it real on the risks to our infrastructure. Coming off that panel, talk to us about some of those risks you are seeing, given what we are, in fact, seeing with the war between Russia and Ukraine.
MATTHEW PRINCE: I think a couple of things. So first of all, on the ground, in Ukraine, we've been donating our services to any Ukrainian critical infrastructure to make sure that the Ukrainian internet stays online. That's something that we started doing before the war started, and we've continued to do it. And I'm proud of our team, having helped play a part in making sure that Ukrainians continue to be able to access the internet, access critical services. And that's something that we're all going to continue to be committed to.
I think one of the things that we really anticipated was that as the war took off, that one of the things that Russia may do is strike out against the West and see more cyber attacks against the West. So far, that hasn't happened to the extent that we expected.
BRIAN SOZZI: Why do you think that's the case?
MATTHEW PRINCE: I think a couple of things. One, Russia itself is quite vulnerable to cyber attacks. And so, if they launch those attacks against the West, I think they are concerned that the attacks might come back at us. I think, secondly, a lot of their attention is focused inside of Ukraine, and that it just hasn't been focused around the rest of the world. But it's something we stay vigilant for, we're concerned about. But so far, the concern that the Russians are coming to the rest of the world hasn't come true.
BRIAN SOZZI: Talk to us a little bit about your decision to stay in Russia. There's been some internet chatter on this, but while I have the guy here running the company, I want to hear from you.
MATTHEW PRINCE: So, first of all, we didn't have any employees in Russia. We have very little business in Russia. We pulled out of any sanctioned or even related to sanctioned parties. But there are a couple of things. First of all, there are a number of people who are in Russia who are speaking out against the Putin regime. And we need to protect them from attacks from the Putin regime. I'm actually one of three tech executives that Russia sanctioned the other day, because we're actually so good at stopping Russian cyber attacks that they don't like us doing that.
BRIAN SOZZI: How does that feel? I've never talked to a tech executive that has been sanctioned by--
MATTHEW PRINCE: It was an interesting thing that sort of have to check to make sure our flight over here didn't fly over Russian airspace. But it was me, Mark Zuckerberg, and Marc Benioff. Maybe it was just people whose names start with M-A. But I think the other thing which has been important is that we've seen that inside of Russia, there's actually been an uptick in Russians trying to get to Western news, uncensored news. And Cloudflare runs a service called 22.214.171.124, which, for a period of time, for the last few months, has been either the number one, two, or three app in the Russian App Store. And that's how a lot of Russians are getting information about that.
We're only able to provide that because we continue to run infrastructure there. And it's something that working with Western governments, they've encouraged us to continue to do. And so, while I think if you're selling soda pop, obviously, you should be pulling out, or French fries. But if you're making sure that the internet stays accessible to the people in Russia, we think that it's actually an important thing to show them what's going on in the rest of the world.
BRIAN SOZZI: Good, I'm glad we got that straight. I hope that clears up any confusion out there on the internet. Now talk to us about the state of the business. What I've been hearing from folks so far is this two-speed economic situation, where the US not yet in a recession, growth is slowing down, but the European market might be in a recession. How do you see it?
MATTHEW PRINCE: You know, I think that Cloudflare's 12 years old. And I we haven't really had a true recession in the period of time that we have existed as a company, and we're probably long overdue for that. Q1 of 2022, I think across the entire tech sector, was one of the toughest quarters that any businesses have seen since Q1 of 2020, the start of COVID. I don't think we're going to bounce back quite as fast as we did with COVID.
For us, that's actually not a bad thing. We provide our services in a very economical way. We tend to actually save businesses money, help them cut other vendors, simplify things. So, for us, we actually see it as an opportunity. But I think for the world economy, we definitely see that across the world, budgets are getting tighter. And I think that that might foreshadow what could be a tough next couple of years to come.
BRIAN SOZZI: Internally, at Cloudflare, are you preparing for a recession? And how do you prepare for one?
MATTHEW PRINCE: Yeah, I mean, I think we're continuing to hire very quickly because we see an enormous amount of demand for our products. But we're making sure that we look across our business and ask where can we make sure that we're getting more efficient. We can tighten our belt. We can make sure every opportunity in our business is world class.
My co-founder, Michelle, likes to say, never let a good crisis go to waste. And I think that great businesses get born out of recessions. Cloudflare actually started out of the 2008, 2009 recessions. And great businesses really prove themselves during recessions. And we intend to be a really great business. And I think we're going to really prove ourselves over the next couple of years.
BRIAN SOZZI: Last one for you, tech stocks have sold off. Your company has been doing very well. How does that make you feel?
MATTHEW PRINCE: We're just focused on building a really great business. It's up to you to tell us what that's worth. But over the long-term, I'm really confident in Cloudflare. We're helping build a better internet. And every day, I come to work incredibly proud of the work that we're doing to protect Ukraine, to protect the internet around the world. And we're seeing an enormous amount of demand from our customers, many of whom are here at the World Economic Forum, some of the biggest companies in the world that rely on our network in order to stay online.
BRIAN SOZZI: I would just say this to your tweet when you landed here. It made me crack up. The COVID boss.
MATTHEW PRINCE: It is. Well, you know, I think Davos is in a Swiss town. There are a lot of poorly ventilated sort of basements that host events. And I hope we all make it back to the US. I've obviously been vaccinated and boosted. And but it's-- if you can get-- if I can get through this without COVID, I think maybe we're at the tail end of COVID.
BRIAN SOZZI: All right, well, that's a good thing. It takes me back to my college days, hanging out in someone else's basement. Just need a couple of beers. Matthew Prince, good to see you, as always. Have a great trip.
MATTHEW PRINCE: Thank you so much.
BRIAN SOZZI: Thank you.