First things first
This recent piece from The Register -- suggesting that Netflix or Facebook could make lots of money as security vendors for cloud-native architectures -- piqued my interest. I've considered the idea myself on numerous occasions while watching those two companies, in particular, drive innovation in some important and lucrative areas. If Amazon and Google could make the transition from B2C tech companies into B2B cloud providers at a massive scale, why couldn't Netflix, Facebook and their peers create viable businesses around cloud operations, databases or security?
There are lots of business reasons why they might never pursue this path, but it might not be completely crazy. In fact, credit card provider Capital One made its foray into software sales in November by releasing a security-centric container-orchestration platform called Critical Stack. The logic there being that this stuff is complicated and Capital One has experience doing it securely at scale, so it might as well use this expertise to turn a profit. Of course, it's way too early too tell whether the move will reap any meaningful reward for Capital One.
This is a big difference from the way companies like Netflix and Facebook presently choose to share their expertise with the world -- as open source projects. The goal there isn't to make money directly, but instead to generate excitement and mindshare among engineers to fuel hiring. And then, as more people get accustomed to the technologies they've open sourced, the pool of talent qualified to work on their internal systems grows larger.
This model has already had ripple effects in the software market, with tech-savvy companies adopting and extending their peers' OSS rather than building or buying something, and with engineers-turned-entrepreneurs starting up companies based on these technologies and/or the principles behind them. That list is looooong, spanning from the first Hadoop vendors (Hadoop, you might recall, really took off inside Yahoo) to newer companies like Gremlin, which is based around Netflix's chaos engineering principles.
But in the expanse between companies capable of bending raw OSS to fit their needs and those willing to engage with startups, there are a lot of customers that prefer to buy software/services from someone they already know and trust. Say what you will about their core businesses, but I think most people at least respect the technical chops and financial viability of companies like Netflix and Facebook. (And maybe even Walmart.)
The hardest part for those companies might be convincing talented engineers to move from solving cutting-edge problems to solving more mundane ones, or perhaps in deciding to pull those folks off of internal systems at all. There's also an argument that this idea is just plain superfluous, because the combination of hyperscale cloud providers, open source software, startup activity and M&A already meets the needs of most IT buyers.
Still, the idea of tech companies spinning out their IT prowess remains a titillating notion as software continues to eat the world and cybersecurity becomes a first-order concern for just about everybody. And watching AWS earn Amazon more than $5 billion in the fourth quarter, for example, has to leave some tech executives with dollars signs in their eyes.