As Kubernetes grows, a startup ecosystem develops in its wake

Kubernetes, the open source receptacle orchestration tool, came out of Google several years ago and has gained traction amazingly fast. With each step in its growth, it has created opportunities for companies to develop industries on top of the open source project.

The beauty of open source is that when it runs, you build a base platform and an economic ecosystem follows in its wake. That’s because a project like Kubernetes( or any successful open source offering) generates new requirements as a natural extension of the growth and development of a project.

Those requirements represent opportunities for new projects, of course, but also for startups looking at building companies adjacent that open source community. Before that can happen however, a couple of key pieces have to fall into place.

Ingredients for success

For starters you need the big corporates to get behind it. In the case of Kuberentes, in a 6 week period last year in quick succession between July and the beginning of September, we saw some of the best known enterprise technology companies including AWS, Oracle, Microsoft, VMware and Pivotal all join the Cloud Native Computing Foundation( CNCF ), the professional organisation behind the open source project. This was a signal that Kubernetes was becoming a standard of kinds for container orchestration.

Surely these big companies would have preferred( and tried) to control the orchestration layer themselves, but they soon found that their customers preferred to use Kubernetes and they had little choice, but to follow the clear tendency that was developing around the project.

Photo: Georgijevic on Getty Images

The second piece that has to come together for an open source community to prosper is that a significant group of developers have to accept it and start build stuff on top of the platform — and Kubernetes get that too. Consider that according to CNCF, a total of 400 projects have been developed on the platform by 771 developers contributing over 19,000 perpetrates since the launch of Kubernetes 1.0 in 2015. Since last August, the last date for which the CNCF has numbers, developer contributions had increased by 385 percentage. That’s a ton of momentum.

Cue the investors

When you have those two ingredients in place — developers and big vendors — you can begin to gain velocity. As more companies and more developers arrive, the community continues to grow, and that’s what we’ve been considering with Kubernetes.

As that happens, it typically doesn’t take long for investors to take notice, and according to CNCF, there has been over$ 4 billion in investments so far in cloud native companies — this from a project designed didn’t even exist that long ago.

Photo: Fitria Ramli/ EyeEm on Getty Images.

That investment has taken the form of venture capital fund startups trying to build something on top of Kubernetes, and we’ve seen some big raises. Earlier this month, Hasura created a $1.6 M seed round for a packaged version Kubernetes designed specially to meet the needs of developers. Just last week, Upbound, a new startup from Seattle get$ 9 million in its Series A round to help manage multi-cluster and multi-cloud environments in a standard( cloud-native) way. A little farther up the maturity curve, Heptio has raised over $33 million with its most recent round being a $25 million Series B last September. Finally, there is CoreOS, which raised virtually $50 million before being sold to Red Hat for $250 million in January.

CoreOS wasn’t alone by any means as we’ve find other exits coming over the last year or two with organizations scooping up cloud native startups. In particular, when you consider the largest organizations like Microsoft, Oracle and Red Hat buying relatively young startups, they are often go looking for talent, customers and products to get up to speed more quickly in a growing technology region like Kubernetes.

Growing an economic ecosystem

Kubernetes has grown and developed into an economic powerhouse in short period of time as dozens of side projects have developed around it, making even more opportunity for companies of all sizes to build products and services to meet an ever-growing situated of required in a virtuous cycle of investment, invention and economic activity.

Cloud Native Computing Foundation projects. Photo: Cloud Native Computing Foundation

If this project continues to grow, chances are it will gain even more investment as companies continue to flow toward containers and Kubernetes, and even more startups develop to help create products to satisfy new needs as a result.

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Red Hat acquires CoreOS for $250 million in Kubernetes expansion

Red Hat, a company best known for its enterprise Linux products, has been making a big play for Kubernetes and containerization in recent years with its OpenShift Kubernetes product. Today the company decided to expand on that by acquiring CoreOS, a receptacle management startup, for $250 million.

The company’s core products include CoreOS, a Linux distribution and Tectonic, a receptacle management solution based on the open source Kubernetes container orchestration platform, originally developed by Google.( For more information on receptacles, see this article .)

CoreOs and Red Hat have been among the top contributors to Kubernetes, along with Google, FathomDB, ZTE Corporation, Huawei, IBM, Microsoft, Fujitsu and Mirantis.

Perhaps by working so closely on Kubernetes, CoreOS and Red Hat formed a bond, and it eventually constructed sense for them to come together and share customers and brain power. The companies also had vying Linux distros with CoreOS and Red Hat Atomic concentrating on containers, and perhaps the two can find some common developer ground by blending the two.

If the next generation of software is going to be in a hybrid cloud world where proportion lives on prem in the data center and its participation in the public cloud, having a cloud-native textile to deliver applications in a single route is going to be critical. Red Hat’s president of products and technologies, Paul Cormier said that the combined companies are providing a powerful route to span environments.

“The next epoch of technology is being driven by container-based applications that span multi- and hybrid cloud surroundings, including physical, virtual, private cloud and public cloud platforms. Kubernetes, receptacles and Linux are at the heart of this transformation, and like Red Hat, CoreOS has been a leader in both the upstream open source communities that are fueling these innovative new its work to bring enterprise-grade Kubernetes to customers, ” Cormier said in a statement.

As CoreOS CEO Alex Polvi told me in an interview last year, “As a company we helped make the whole container category alongside Google, Docker and Red Hat. We helped create a whole new category of infrastructure, ” he said.

His company was early to the game by developing an enterprise Kubernetes product, and he was able to capitalize on that. “We called Kubernetes super-duper early and helped enterprises like Ticketmaster and Starbucks adopt Kubernetes, ” he said.

He has pointed out that Tectonic included four main categories, including governance, monitoring tools, chargeback accounting and one-click upgrades.

Red Hat CEO Jim Whitehurst told us in an interview last year that his company also came early to containers and Kubernetes. He said the company recognise containers included an operating system kernel, which was usually Linux. One thing they understood was Linux, so they have begun delving into Kubernetes and containerization and built OpenShift.

CoreOS has raised $50 million since its inception in 2013. Investors include GV( formerly Google Ventures) and Kleiner Perkins, which appear to have gotten nice returns. The most recent round was a $28 million Series B in May 2016 led by GV. One interesting aside is that Google, which has been a big contributor to Kubernetes itself and whose venture limb helped finance CoreOS, was scooped by Red Hat in this deal.

The deal is expected to close this month, and devoted we only have one day left, chances are it’s done.

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As Kubernetes surged in popularity in 2017, it created a vibrant ecosystem

For a technology that the average person has probably never heard of, Kubernetes surged in popularity in 2017 with a particular group of IT pros who are working with container technology. Kubernetes is the orchestration engine that underlies how operations staff deploy and manage receptacles at scale.( For the low-down on containers, check out this article .)

In plain English, that means that as the number of receptacles grows then you need a tool to help launching and track them all. And because the idea of receptacles — and the so-called “microservices” model it enables — is to break down a complex monolithic app into much smaller and more manageable pieces, the number of receptacles tends to increase over day. Kubernetes has become the de facto criterion tool for that job.

Kubernetes is actually an open source project, originally developed at Google, which is managed by the Cloud Native Computing Foundation( CNCF ). Over the last year, we’ve considered some of the biggest names in tech flocking to the CNCF including AWS, Oracle, Microsoft and others, in large proportion since they are want to have some influence over the development of Kubernetes.

Growing quickly

As Kubernetes has gained momentum, it has become a platform for invention and business ideas( as tends to happen with popular open source projects ). Once you get beyond the early adopters, companies start to see opportunities to help customers who want to move to the new technology, but lack internal expertise. Companies can create commercial opportunities by hiding some of the underlying complexity associated with using a tool like this.

We are starting to see this in a big way with Kubernetes as companies begin to build products based on the open source that delivers a more a packaged approach that makes it easier to use and enforce without having to learn all of the tool’s nuances.

To give you a sense of how quickly usage had increased, 451 Research did a receptacle survey in 2015 and observed merely 10 percent of respondents were using some sort of container orchestration tool, whether Kubernetes or a competitor. Just two years later in a follow-up survey, 451 found that 71% of respondents were use Kubernetes to manage their containers.

Google’s Sam Ramji, who is VP of product management at Google( and was formerly CEO at Cloud Foundry Foundation ), says it feels like an overnight sensation, but like many things it was a long time in the making. The direct antecedent of Kubernetes is a Google project called Borg. Ramji points out that Google was operating containers in production for a decade before the company released Kubernetes as an open source project in 2014.

“There was almost a decade of container management at scale in Google. It wasn’t an experiment. It was code that ran the Google business at scale on Borg. Kubernetes is built from scratch based on those lessons, ” Ramji said.

Cloud native computing

One of the big drivers behind use Kubernetes and cloud native tools in general is that companies are increasingly operating in a hybrid world where some of their resources are in the cloud and some on-prem in a data center. Tools like Kubernetes provide a framework for managing applications wherever they happen to live in a consistent way.

That consistency is one big reason for its popularity. If IT was forced to manage applications in two different places employing two different tools( or situateds of tools ), it would( and does) create a confusing mess that stimulates it difficult to understand just what resources they are using and where the data is living at any particular moment.

One reason the Cloud Native Computing Foundation is called that( instead of the Kubernetes foundation ), is that Google and other governing members recognize that Kubernetes is only part of the cloud native narrative. It may be a big component, but they want to encourage a much richer system of tools. By naming it more broadly, they are encouraging the open source community to build tools to expand the ability to manage infrastructure in a cloud native fashion.

Big companies on board

If you look at the top 10 contributors to the project, it involves some major technology players, some of whom cross over into OpenStack, Linux and other open source projects.These include Google, Red Hat, CoreOS, FathomDB, ZTE Corporation, Huawei, IBM, Microsoft, Fujitsu, and Mirantis.

Dan Kohn, the CNCF’s executive director, says these companies have recognized that it’s easier to cooperate around the base technology and vie on higher level tools. “I would describe an analogy back to Linux. People describe Kubernetes as the’ Linux of the cloud’. It’s not that all of these companies have decided to hold hands or are not vying for the same clients. But they have recognized that trying to compete in receptacle orchestration doesn’t have a lot of value, ” he said.

And many of these companies have been scooping up Kubernetes, receptacle or cloud-native related companies over the last 12 -1 8 months.

Company Acquired Company Purpose Date Acquired Amount Red Hat Codenvy receptacle growth team workspaces

5/ 25/2017

Undisclosed Oracle Wercker operate and deploy cloud native apps at scale

4/ 17/2017

Undisclosed Microsoft Deis workflow tool for Kubernetes

4/ 10/2017

Undisclosed Mirantis TCP Cloud cloud-like continuous updating

9/ 15/2016

$30 million Centurylink ElasticBox mutli-cloud applications management

6/ 14/2016

$20 million Apprenda Kismatic support and tooling for Kubernetes

5/ 19/2016

Undisclosed

Capital One begins journey as a software vendor with the release of Critical Stack Beta

If every company is truly a software company, Capital One is out to the prove it. It was one of the early users of Critical Stack, a tool designed to help build security into the container orchestration process. In fact, it liked it so much it bought the company in 2016, and today it’s releasing Critical Stack in Beta.

This is a critical step toward becoming a commercial product, giving the bank its first entree into software selling.

Capital One is espousing modern applications delivery methods like containerization, and it needed a tool specifically tuned to the security requirements of a financial services company. That’s what Critical Stack purports to give it, and they liked it so much, they believed others who required a similar level of security would too.

Critical Stack comply fully with Kubernetes, the popular receptacle orchestration tool, but it’s been designed to provide a higher level of security than the base product, while giving large organizations like banks a packaged approach to container orchestration.

“One of the many strengths of Kubernetes is its rapid development cycle. You understand how challenging that can be to keep up with that moving target. We have an orchestration layer that has an abstraction away from that. Critical Stack is a stand-alone tool within the ecosystem of tools compatible with Kubernetes, ” Liam Randall, Critical Stack chairperson and co-founder told TechCrunch.

Critical Stack does everything you would expect a Kubernetes distribution to do including managing the receptacle delivery and lifecycle management, but it’s specifically designed to allow operations to automate security and conformity policies around the containers, something banks and other highly governed business need to do.

The company also concentrated on putting that various kinds of functionality in an interface that’s easy to use.

Photo: Critical Stack

While the company isn’t open sourcing this tool, they believe by selling it, they can get a similar situated of benefits. “When you think about a lot of the great platforms, the best lessons learned come from working with other partners, ” Randall said. While he and his team saw a broad set of use examples internally, they felt that getting the product into the hands of others would only help enhance it — and it doesn’t hurt they could attain some money doing it.

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Docker gives into inevitable and offers native Kubernetes support

When it comes to container orchestration, it seems clear that Kubernetes, the open source tool developed by Google, has won the battle for operations’ hearts and minds. It therefore shouldn’t come as a surprise to anyone who’s been paying attention that Docker announced native is supportive of Kubernetes today at DockerCon Europe in Copenhagen.

The company hasn’t given up altogether on its own orchestration tool, Docker Swarm, but by offering native Kubernetes support for the first time, it is acknowledging that people are using it in sufficient numbers that they have to build in support. To take the sting away from supporting a rival tool, they are offering an architecture that enables users to select an orchestration engine at run period. That can be Swarm or Kubernetes each time without any need to alter code, Banjot Chanana, head of product at Docker told TechCrunch.

Before today’s announcement, while it was possible to use Kubernetes with Docker, it wasn’t necessarily an easy process. With the new Kubernetes support, it should be far simpler for both Docker Enterprise Edition and Docker Developer Edition users.

Chanana says that because of the route Docker is architected it wasn’t actually that difficult to offer Kubernetes alongside Docker Swarm and do it in a way that it wouldn’t appear or feel like a bolt-on. Docker gives customers a standard way to build program containers . This is usually taken care of by the developer in the DevOps model.

Operations deals with deploying, procuring and managing the receptacles through their lifecycle utilizing an orchestration tool. Over the last couple of years, Kubernetes has been gaining steam as the orchestration tool of option with big names like AWS, Oracle, Microsoft, VMware and Pivotal all to intervene in the Cloud Native Computing Foundation this year, the open source organization that houses the Kubernetes project.

When all of those organizations climbed on the bandwagon, Docker had little choice but to go along to get aligned with customers’ wishings. Docker was able to build in support while keeping is supportive of their own orchestration tool alive, but it’s reasonably clear that Kubernetes has become the orchestration tool that people will be using for the majority of container workloads moving forward.

It’s worth noting that The Info reported the coming week that in 2014 when it was developing Kubernetes, Google offered to collaborate with Docker and let it house the Kubernetes project, but the company decided to develop Swarm and Google moved onto the Cloud Native Computing Foundation. Today’s announcement brings them full circle in a sense, as they will be supporting Kubernetes moving forward( even if they don’t house the code ).

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Red Hat continues steady march toward $5 billion revenue goal

The last day I spoke to Red Hat CEO Jim Whitehurst, in June 2016, he had defined a pretty audacious aim for his company to achieve$ 5 billion in revenue. At the time, that seemed a little bit far-fetched. After all, his company had just become the first open-source company to outstrip $ 2 billion in revenue. Getting to five represented a significant challenge because, as he pointed out, the bigger you get, the harder it becomes to keep the growth trajectory going.

But the company has continued to thrive and is on track to pass$ 3 billion in revenue some time in the next couple of one-quarters. Red Hat is best known for creating a version of Linux designed specifically for the enterprise, but it has been engaged in adapting to the changing world out there with cloud and containers — and as its RHEL( Red Hat Enterprise Linux) customers start to change the way they work( ever so slowly ), they are continuing to use Red Hat for these new technologies. As Whitehurst told me, that’s not a coincidence.

The cloud and containers are built on Linux, and if there is one thing Red Hat knows, it’s Linux. Whitehurst points out the legacy RHEL business is still growing at a healthy 14 percent, but it’s the newer cloud and receptacle business that’s growing like gangbusters at a robust 40 percent, and he says that is really having a positive impact on revenue.

In its most recent earnings report last month, overall revenue was up 21 percentage to $723 million for the one-quarter for a $2.8 billion operate rate. Investors surely seem to like what they are seeing. The share cost has gone on a straight upward trajectory, from a low of $68.71 in December 2016 to $121 per share today, as I wrote such articles. That’s a nice return any style you slice it.

Whitehurst says the different parts of the business are actually feeding one another. The company made an early bet on Kubernetes, the open-source receptacle orchestration tool originally developed at Google. That wager has paid off handsomely as companies are moving toward containerized application delivery employing Kubernetes. In the same way Red Hat packaged Linux in such a way that induced sense for enterprise IT, it’s doing the same thing with Kubernetes with its OpenShift products. In fact, Whitehurst jokes OpenShift would be more widely recognized if they had just put Kubernetes in the name.

While he attributes some of the company’s success in this area to being in the right place at the right time with the right technology, he reckons it’s more than that. “We have some skill in identifying architecture that is best for the enterprise, ” he said. It doesn’t hurt that they also got involved with contributing back to the community early on and today are the second largest contributor to Kubernetes.

But he says the Linux connection, the fact that containers are built on Linux, is truly what is the most likely factor driving the business, and that they can apply what they know in Linux to receptacles is a big deal.

But he points out that large organisations, which are his company’s bread and butter, aren’t all rushing to containerize their entire application inventory. These companies tend to move more slowly than that, and Red Hat is trying to cover them regardless of where they are in that evolution: employing virtual machines in the cloud or on prem or operating containerized applications.

Whitehurst understands his company is selling free software, so they have to add value by easing the implementation and management of these tools for customers. “When you sell free software, you have to obsess about the value it can bring because the IP is free, ” he said. Given the numbers, it would appear clients see that value, and that is contributing to that steady march toward$ 5 billion.

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