Docker got a new CEO on Tuesday, and lots of folks—myself included—are wondering what’s up. Will he try to sell the company? Take it public? Just get it making some real money?
What I do know is that rumors had been swirling for quite a while that former CEO Ben Golub was on his way out, so many industry watchers were just waiting for the other shoe to drop. While Docker containers have achieved seeming ubiquity, many will tell you the company has not been generating adequate revenue to justify its lofty valuation.
Supporting hundreds of employees in Silicon Valley is expensive, especially if it includes a skilled enterprise sales team. Docker actually appears to have a reasonable number of customers, but it takes a lot
of smallish support deals to add up to something meaningful. Furthermore, as I’ve written here before
, making money in the container space is doubly difficult because there’s a built-in expectation of open source and a natural inclination to focus on developers.
You know who appears to be making a killing off of Docker? Red Hat. Why? Because Docker is doing, and open sourcing, much of the foundational work—not to mention driving mindshare—and a large company like Red Hat can swoop in with its Kubernetes-based OpenShift technology and offer an entire platform experience. Backed and supported by Red Hat, no less.
[Q3, FY 2017] “Also of note, we closed our second OpenShift deal over $10 million and another OpenShift deal over $5 million. And significantly, we actually had over 50 OpenShift deals alone that were six or seven figures, so really strong traction.“
[Q4, FY 2017] “with our largest deals in Q4 … approximately one-third had an OpenShift container platform component.
This isn’t to say Red Hat is going to own the platform-as-a-service/container-as-a-service/container orchestration/whatever-you-want-to-call-it space forever, but Red Hat’s present (and relative) success does highlight why there’s so much activity at that layer of the container stack. When Docker realized it needed to monetize its open source technology beyond support, it walked into a higher-level space crowded by startups and large vendors alike.
Beyond revenue and product strategy—and there’s a lot more to say on that—an underappreciated issue, I think, is the level of controversy and animosity surrounding Docker. Not having been inside the company or even part of the Docker developer community, it’s hard to know for sure what’s going on. But if you look at how Docker arguably has mismanaged everything from community messaging to harassment claims, or if you read its Glassdoor reviews or the comments on Hacker News posts about the company, it’s hard to not leave with a sense that something is amiss.
Granted, no company is perfect, but the spotlight has a tendency to, well, shine a light on imperfections. You could argue that Docker has had to grow up faster than maybe it should have, but that doesn’t change the fact that people are paying attention and forming opinions.
As for Docker’s new CEO, Steve Singh, all accounts (and I acknowledge that I haven’t done a lot of investigating) are that he is a great leader and a great person to work for. (There was this “glitch” on his résumé
, but that didn’t appear to materially affect anything.) Some people suggest he was brought in to try and sell Docker, but I’m not sold on that argument. Docker still has a lot of upside.
Yes, Singh did eventually sell his previous company, Concur, to SAP for billions, but he did so only after 20 years and an IPO. Also, I would bet that Docker has fielded its fair share of acquisition offers already, and might even have engaged in some discussions about it. Maybe Docker couldn’t get the terms it wanted and the board thinks Singh is the guy to get it in shape so it can get a good exit. On the other hand, if the pressure really is on to sell, there almost certainly have been opportunities.
[WARNING: Mixed metaphors ahead.] Docker has had an outsized impact during its short existence, and now it’s time to grow into the business suit it’s been forced to wear. Maybe, just maybe, Singh’s mission is to right the Docker ship and turn it into the enterprise IT giant that many people expect it to be.