How Docker 2.0 went from $11M to $135M in 2 years

2023-01-13 12:49:42

TL;DR: Simply 2 years after shedding 80% of their group and being left for lifeless, we estimate Docker is now at $135M+ ARR rising roughly 150% YoY—and rebuilding Docker 2.0 as a bottom-up, developer-first firm. For extra on Docker’s future, try our interview with Docker CEO Scott Johnston together with our Docker profile and dataset.

Be aware: All income and progress charges estimated by Sacra from publicly accessible info.

Listed here are the important thing factors from our analysis on Docker:

Circa 2008-2010, platform-as-a-service (PaaS) firms like Heroku (acquired by Salesforce for $212M) and dotCloud (the precursor to Docker) launched to construct abstractions on prime of Amazon Internet Companies’s (AWS) primitives of cloud compute and storage to streamline the applying improvement workflow—it is from dotCloud’s PaaS that the brand new cloud improvement primitive of Docker containers emerged. The place AWS was enabled by the virtualization of the underlying {hardware}, containerization allowed for the encapsulation of software code into discrete items and abstraction of the underlying dependencies and working system, enabling the rise of dev ops and orchestration. (link)
Inside 7 months after open sourcing Docker from dotCloud, Docker skilled excessive product-market match, with 140,000 container downloads, 6,700 Github stars, 800+ forks, 200 contributors, 150+ initiatives constructed on prime of Docker, together with firms like Rackspace, eBay and CloudFlare utilizing Docker internally—by 2014, assist for Docker containers was built-in into developer platforms like AWS, Google Cloud and Microsoft Azure. Whereas Heroku initially launched for Ruby on Rails solely, dotCloud differentiated itself by permitting builders to combine and match totally different languages and frameworks—Python, Java, PHP, and so forth.—with totally different information providers—MySQL, Redis, MongoDB, and so forth—which its inside service Docker enabled. (link)
Docker turned a core utility for cloud improvement and dev ops with 37B+ containerized purposes downloaded by early 2018, fueled by the meteoric rise of microservices and the rise of cellular—firms like Netflix and Uber ran on 10,000s of microservices, contrasted with the monolithic code bases at earlier era firms like eBay. Docker’s Linux containers emphasised portability, composability, and scalability, which made them the default supply platform for builders constructing apps on microservices. (link)
Whereas Docker as a typical was turning into wildly profitable, Docker as a enterprise struggled to commercialize—using the prevailing open supply technique of top-down gross sales tailor-made to enterprise wants of the type that received Pink Hat (acquired by IBM for $34B) to $1.2B ARR by 2014—which principally consisted of promoting orchestration options (Docker Swarm and Kubernetes) into ops. Docker was spending giant quantities of go-to-market time, cash, and headcount educating and persuading ops to spend cash with them, when the vast majority of the love, consumption, and utilization was coming from builders. (link)
Nevertheless, Google received orchestration by open sourcing its container orchestration resolution Kubernetes—making free what Docker Swarm guess on as its major income heart—whereas bundling its personal managed resolution into its infrastructure-as-a-service (IaaS) Google Cloud. By investing closely into the open supply Kubernetes venture by the Cloud Native Computing Basis (CNCF), Google, Amazon, Microsoft and IBM set themselves as much as monetize Kubernetes by providing it as a managed resolution—in distinction to Docker, which appeared to monetize it extra instantly. (link)
11 years in and with $335M invested, Docker was at sub-$75M ARR in 2019—Docker would find yourself spinning off their unsuccessful Docker Enterprise/Swarm companies to Mirantis. Mirantis supplies enterprises with a Kubernetes-as-a-service providing that’s constructed on the know-how acquired from Docker. (link)

In late 2019, Docker recapped the corporate, took $35M in contemporary capital from Benchmark and Perception and named Chief Product Officer Scott Johnston as CEO with the brand new technique to make use of Docker’s giant set up base and ubiquitous model to promote straight into builders—as a substitute of ops—and align their monetization with the a part of the group getting worth from the product. With this new bottom-up technique, Docker adopted within the footsteps of different profitable PLG, land-and-expand firms like MongoDB ($1B run charge) and GitLab ($452M income) that listed on the rise of devs empowered to purchase their very own hosted instruments. (link)
After going from ~420 workers to 60 post-pivot, Docker 2.0 rebooted with no salespeople and a PLG gross sales movement that opened industrial relationships with their now-20M+ set up base by capturing the bank card of the end-user developer for low-priced ($5/$9/$24 per person per 30 days) seats—as a wedge into seat enlargement within the org. In 2018, when Github was acquired by Microsoft for $7.5B, every of their 28 million authenticated customers was valued at about $260 apiece (immediately, Github is at 83 million builders). (link)
Publish-pivot, Docker’s progress ramp has been steep—they grew 254% YoY from ~$11M ARR in late 2020 to ~$135M on the finish of 2022 simply by flipping Docker Hub and Docker Desktop to paid for companies. Per figures revealed by Tribe Capital, Docker’s internet greenback retention went from 80% to 120% over 1-2 months on the finish of 2020—corresponding to GitLab at 130% as of Q3 FY23. (link)
The proliferation of dev instruments is driving toolchain consolidation, and Docker’s positioning on the developer desktop on the level of creation offers them a powerful place to construct a complete developer productiveness suite—e.g. unit testing, debugging, collaboration—designed for security to develop to greater per-seat value factors. The necessity for safer devops has spiked amidst the rise of safety breaches and high-profile hacks—evaluation by Gitlab places the whole measurement of the market at $40B, with 85% of organizations utilizing 2-10 devops instruments and 69% seeking to consolidate. (link)
Docker is the model synonymous with the container commonplace with an strategy to monetization that indexes the corporate on the continued progress of microservices, software program and the demand for software program engineers, with 45 million devs set to enter the market within the subsequent decade. Right now, Docker serves primarily back-end, server-side and full-stack engineers, however the firm needs to develop to all developer segments, together with front-end, AI/ML engineers, and others. (link)