When a little known (and on the verge of failure) Platform as a Service company, dotCloud, did a pivot into a new space a few years ago, it unleashed a wave of innovation, experimentation, and commercialization of Linux containers. It’s easy to forget that Docker was a company borne out of both commercial necessity and technological serendipity – founder Solomon Hykes didn’t move the needle in the PaaS space, but he’s certainly helped to move the needle in the infrastructure space.
But, as is often the case, helping to start a movement, and finding commercial success are, alas, two different things, and Docker (the company, as opposed to the eponymously named open source container project) has struggled with this part of the puzzle. The company gained huge attention and investor excitement when it first launched – the timing was perfect and Docker rode a wave of heightened interest in a move away from monolithic applications and approaches to more modular ones – microservices fits nicely into he container narrative and Docker was perfectly placed to leverage that attention.
But in a cautionary tale, sometimes investor excitement is actually counter productive – it gives a company an unrealistic view of its own worth and, by extension, places a huge onus on said company to deliver revenue to justify that valuation. When you’re Docker, and you’ve raised around a quarter of a billion dollars in venture capital, that translates to a huge revenue requirement.
And it is on this side of the equation, revenue, that Docker has struggled. Like many other open source projects which have found it difficult to translate interest into revenue (OpenStack, anyone?), Docker the company has been slow to grow revenue. The fact that its latest funding round is rumored to have taken Docker’s valuation to $1.3 billion, only a small increase since its valuation way back in 2015, is a testimony to this fact. Investors like the Docker story, but I’d suggest they’re getting a little antsy about when the results are going to map to the promise.
A new broom. Is it sweeping in the changes?
Docker has made some changes that, one assumes, are focused on delivering this commercial success. It appointed Steve Singh, the former CEO of Concur, into the CEO role. This is no coincidence – Concur built a highly successful enterprise sales machine and Singh is, we suspect, trying to do the same within Docker. My experience with Docker in the past is that it has been both defensive and far too self-assured, on hopes that Singh is starting to listen to external voices and reacting to what many commentators have been pointing out for years.
In a pretty harsh assessment about Docker’s future, Matt Asay pulled no punches, saying that:
You’ve seen it before: The hearty congratulations on Twitter to startups that raise a big round of funding. Too often, however, venture money isn’t a sign of success—it means a company still hasn’t figured out how to make money, so it’s buying time with VC money. While venture money can be used to fuel growth, too often companies use it as an excuse to put off the inevitable, difficult task of making money.
I’m not sure I’d blame Docker laziness. Many open source companies struggle with the revenue question. And in Docker’s case, bigger initiatives have taken some of the wind from their sails.
Kubernetes kneecapping Docker before it gets up to speed?
The elephant in the room comes by way of an open source initiative that was itself borne out of the systems that Google uses to run its internal infrastructure. While Docker reintroduced the concept of Linux containers and then had to try and figure out how to monetize them, Kubernetes has become almost the default tool through which enterprises manage the containers they use. And whereas Docker has been trying to balance the seemingly irreconcilable tasks of building commercial success itself, while still fostering an ecosystem, Kubernetes has seen huge amounts of buy in from companies who already have revenue-generating businesses – Microsoft, AWS, and Google among them, and hence have less tensions to resolve.
And the company with the best history of commercializing open source, Red Hat, has the luxury of being able to sell a variety of different solutions to its customers, containers only being one small part of a greater whole. the fact that Red Hat placed a big bet by building on top of Kubernetes, further points to the fact that Docker’s opportunity is narrowing by the day.
Prognosticating the future
In his post, Asay answers everyone’s question about whether Docker has blown the one chance it had:
Docker, despite rightly getting credit for fostering the container market, is the underdog, and not nearly as well-equipped as Red Hat to make money from containers. With every major tech vendor firmly behind Kubernetes, Red Hat has wind in its sails as its Kubernetes-based OpenShift competes against a Docker whose management tooling has the benefit of being closely aligned with the company that invented the container standard, but also the detriment of not being tied to the community managing those containers with Kubernetes.
MyPOV
Docker has had a hard time of it. IN part, it is a victim of its own early success – it was always going to be a hard path to justify its early valuation and grow to the extent it needed to. Hykes’ serendipitous assessment that Linux containers are totally aligned to modern approaches towards architectural patterns started off a tsunami that Docker simply wasn’t big enough to ride. It got swamped in massive interest that was created by its own work.
To be honest, I’m dubious that Docker can live up to its arguably overstated potential. Both because the world has moved on but, perhaps more importantly, because that potential was stated without a clear idea of how an important, but limited, open source initiative could both foster a vibrant ecosystem, while still building scale for its parent company. It would be fascinating to be a fly on the wall within Docker’s corporate headquarters, I’m looking forward to seeing what the new leadership comes up with.
