As anointments go, this one was big. Just minutes after Microsoft CEO Satya Nadella finished his keynote at his annual developer conference in late April, the leader of the world’s biggest software company handed the stage to a mild-mannered figure in a dark blazer and a T-shirt with his company’s whale logo on it. Ben Golub, the 47-year-old CEO of a startup called Docker, told the packed crowd how surprised he was that his unpolished new product has become such a big deal to Microsoft while still a toddler: “It occasionally stumbles; it occasionally spits up and keeps those closest to it up at night.”
Moments later, a Microsoft executive, also in a Docker T-shirt, bounded onstage to give Docker’s technology a spin. He took all the Microsoft-based code for an ecommerce website, put it through Docker’s software and had it running on rival Linux servers in seconds. The developers in the crowd cheered at a feat that until then would have taken days or weeks.
Microsoft, like dozens of giant tech companies, is rushing to declare its love for Docker’s technology, which represents one of the biggest shifts in application development in years. Almost anything you do online now is an app running in the cloud. Netflix, Google Search, Twitter, Facebook and Snapchat all seem to just work magically, but under the hood, they’re composed of dozens or hundreds of components that deal with memory, databases, security and networks. The developers who build them want to focus on what makes each special, not the backroom piping. They want their apps to run on any cloud server or device, update quickly and withstand the web equivalent of a loose screw. Docker aims to do all that with a technology called containers. Containers bundle an app with all its code libraries and executable files inside a shell that, like the shipping containers they’re named after, fits everywhere and allows app-makers to swap them quickly and approve them for live use in minutes or hours. Big tech firms such as Google have been using in-house versions of containers for years. But Docker made the tools easy enough for everyone else to use.
Apps housed in Docker’s free container software have been downloaded 535 million times in just two years. Some 150,000 live apps are running off Docker containers at companies like Goldman Sachs, Amazon and IBM. According to a study by New York-based Enterprise Technology Research, large businesses are testing or planning to adopt Docker faster than any cloud open-source product ever. Docker’s powerhouse investors, which include Benchmark, Greylock Partners and Sequoia Capital, have put in $161 million total, most recently at a $1 billion valuation—all for a company that will gross less than $10 million this year. “In 25 years, I’ve never seen this kind of pace of adoption,” says Goldman Sachs co-head of technology, Don Duet.
And to think that the company behind Docker almost sank two years ago. Its co-founder, a 31-year-old French engineer named Solomon Hykes, graduated from the Y Combinator programme in 2010 with a startup peddling a completely different idea. Called dotCloud, its software managed customers’ server usage in the Amazon cloud. dotCloud raised $11 million in all from the likes of Yahoo co-founder Jerry Yang, überangel Chris Sacca and firms such as Trinity Ventures and Benchmark. Then dotCloud went sideways. Its customers outgrew it, and Amazon’s own support got better. dotCloud’s board spent months looking for an experienced operator, and some were writing off their investments until they found Golub, who agreed with Hykes to make a bold move. Otherwise, “they were dead in the water,” says Benchmark’s Peter Fenton.
Hykes had one card left to play. With $5 million in the bank, he began tinkering with the underlying technology that made dotCloud so fast: Containers. On a Monday in the spring of 2013, dotCloud’s software engineers showed up for work to be told they would be working on Hykes’s new project, code-named Docker, from now on: “Go bring your laptop to Solomon, and find something to do.” Hykes had until the end of the year before the money ran out.
Golub, a Cupertino native (he had picked apricots at what would become Apple headquarters), was an unlikely choice. He tried start- ing a business school in Tashkent, Uzbekistan (to no avail) and struggled through five years as chief of Plaxo, Sean Parker’s social startup that was sold off in 2008. Asked by Fenton to advise Hykes, Golub backed Hykes’s idea to bet it all on containers. They’d either win fast or fail fast. “I said, screw it. Maybe we will fail, but if we fail, it’ll be doing something that we want to do,” says Hykes.
Hykes and Golub then made an even bolder move: Open-sourcing their underlying technology for use by anyone, for free. Within months, hundreds of volunteers were writing code to improve and extend Docker’s way of running containers. By December 2013, Docker’s popu- larity had impressed new investors enough to put in $15 million.
Docker has been expanding ever since, and currently has 160 employees and 1,300 volunteers on its open-source project. Now on to the money-making part. At the DockerCon user conference in June in San Francisco, Golub and Hykes announced a suite of new paid products, with more than 800 customers already waiting for one, a registry to store containers safely. The product’s first customer is the federal procurement agency, the General Services Administration. Big customers like that should help boost revenue to $40 million next year. “If Docker proves to be the fundamental layer in computing, then $100 billion [market value] is the upside,” says John Vrionis, of Lightspeed Venture Partners, a small investor in Docker.
Many call Docker the next VMware, a firm that shook up computing 15 years ago with a technology called virtual machines, software that allowed you to run multiple operating systems on fewer servers. But VMware didn’t open-source its technology and had the field to itself. Docker is counting on big partners such as IBM to resell its products or, like Microsoft and Amazon, include them in their cloud marketplaces. Several dozen startups have popped up to focus on a host of container issues that Docker hasn’t addressed yet, from Portworx in storage to Weaveworks in networking. (Docker has already gobbled up several.)
Docker helped ensure its relevance by taking the lead in a consortium announced in June, including Microsoft, VMware and its closest rival, the Google-supported CoreOS, to set a single standard for containers. Such a standard, however, only adds to the pressure on each startup involved to make money on top of free technology. There’s usually only room for one big winner.
Two months after the Microsoft event, hot companies such as Lyft and GoPro are gathered around Golub and Hykes in the packed halls of DockerCon. Nearby there’s a Lego whale, and tables with plush-toy whales and whale logo T-shirts all around. Next year, they’ll need a larger space—if Docker isn’t acquired by one of its big partners first. For a moment Golub is by himself on the floor. Would Docker sell its container future for any price? The CEO gives a wry smile. “We’re in this for the long haul.”
(This story appears in the 04 September, 2015 issue of Forbes India. To visit our Archives, click here.)