Docker's rise from sleeper to open source king

Docker CEO Ben Golub speaking at DockerCon (a developer conference), in Amsterdam last December.
Source: Docker
Docker CEO Ben Golub speaking at DockerCon (a developer conference), in Amsterdam last December.

In December 2013, Google announced that its cloud platform was supporting a fledgling open source project called Docker. Outside of a tight-knit community of evangelical software developers, the news went largely unnoticed.

Over the next 10 months, VMware, Amazon Web Services, IBM and Microsoft followed Google's lead. By the end of last year, Docker had gone from almost complete obscurity to become one of the hottest start-ups in the raging-hot business software market, sporting close to a half-billion-dollar valuation.

"At almost every other company I've worked for, if you want to do a partnership with Microsoft or Amazon, you spend months trying to get a meeting," said Ben Golub, Docker's chief executive officer, from the company's brand-new 18,000-square-foot office in San Francisco. "In this case, they're calling us saying `Hey we'd like to meet with you.'"

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In a software-defined world, Docker is a little piece of magic. Before Docker, it was accepted that moving an application from development phase on your desktop, to testing on another machine, to live availability, or production, was an unavoidable hassle. And if you wanted to create an app for Amazon Web Services that could be ported to Google or Microsoft's cloud, a sophisticated team would be needed to clear the technical hurdle.

For developers still struggling to package and move their apps, Docker has a message for you: Stop!

Using a technology called containers, Docker does all the dirty work of creating a virtual package for an application so that it can be easily moved. No losing code or critical images in the process.

Just how well has Docker succeeded in solving a major problem for finicky programmers? The technology has been downloaded more than 200 million times, up from less than 1 million at the beginning of 2014.

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Golub, who ran two tech companies before taking over Docker in 2013, is a hot commodity. He had prime speaking slots at VMware's customer conference in August, Rackspace's partner event that same month and re:Invent, the annual Amazon Web Services gala, in November.

When Golub met with IBM in March, he was joined by three Docker employees at an event that included 4,000 people from IBM.

By the time Golub sat down with Microsoft in June, the software giant had 16 different groups that wanted to meet. The companies hit it off—Docker's head of business development, Nick Stinemates, swapped cellphone numbers with Corey Sanders, director of program management for Microsoft Azure.

"From that point forward, we were constantly texting about the plans for the partnership and the terms of the deal," Sanders said. "It was more texting than I do with any of my friends or even my wife."

In the initial deal, Microsoft simplified the process of running Docker in the Azure cloud, and the company later announced that the next release of Windows Server will support Docker.

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Talk to any open source enthusiast about Docker and you'll hear some version of this: Container technology has been around for a long time, but Docker just made it dead simple. According to a recent survey of 930 technical professionals conducted by RightScale, 13 percent of organizations used Docker in its first year of availability and 35 percent are planning to use it.

"Everyone recognized that containers were going to take off in some way and they didn't want to be caught flat-footed in having Docker compatibility," said John Engates, chief technology officer of managed cloud provider Rackspace in San Antonio. "Nobody really paid a lot of attention to them until 2014."

Attention and widespread adoption was last year's story. For 2015, the challenge is even bigger—because it involves making money. Remember, Docker software is open source, so anybody can download and tinker with it for free.

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Sequoia Capital led a $40 million investment in September at a valuation of around $400 million, expecting Docker—the company—to find a business model around Docker—the free product.

Docker's self-service paid offering rolled out in mid-2014 at prices ranging from $7 to $50 a month. In December, Docker introduced the enterprise edition, slated for public launch later this year, that will likely start at a few hundred dollars a month and go into the tens of thousands.

Commercializing open source software has not been a lucrative way to make a living. Red Hat did it with Linux, and the list pretty much ends there. Several companies today are selling technology and services around open source big data platform Hadoop, with Hortonworks being the first to go public in December. Others are working to generate revenue from another database technology NoSQL.

Docker is confident that it can provide valuable tools that help IT professionals monitor and manage the many Docker containers floating around their company, and also offer paid support when troubles arise. In the first two days after announcing early access to the enterprise product, 97 businesses signed up, Golub said.

Docker isn't disclosing names of early enterprise customers, but global businesses like Goldman Sachs, Baidu and BBC are among those using the open source product. Groupon is another, and the online couponer is waiting to see how the commercial offering evolves.

"We're open source contributors and collaborators, rather than customers," said Brian McCallister, CTO of platform at Chicago-based Groupon, which has multiple teams using Docker for building, testing and packaging internal apps.

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McCallister said Docker is gaining steam at the company and will soon be used in the developing and deploying of Groupon's consumer apps, allowing changes to be made more rapidly. He's not opposed to paying for a more feature-rich service if there's clear value.

"I actually imagine us getting a support contract as we start to roll out front-end applications," McCallister said. "I want to be able to pick up the phone and talk to them."

For Docker, open source was a risky bet to save a flawed start-up. Founded in 2010 as dotCloud, the original idea was to enable applications written in a multitude of programming languages to work together. Solomon Hykes, founder and first CEO, was struggling to generate the kind of buzz needed for a product to break out in the increasingly crowded market of developer tools.

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In early 2013, Hykes brought Golub on board as a consultant. Golub, who in 2011 sold Gluster to Red Hat for $136 million, wasn't interested in trying to help revive dotCloud. But when Hykes floated the idea of open sourcing the core container technology, Golub got all geeked up.

"I was very intrigued and said this looks like it could be something huge or you could be out of business in a year," said Golub.

He became CEO in July 2013, and Hykes assumed the role of CTO. Soon thereafter, the more than $10 million that venture investors including Benchmark and Trinity Ventures had poured into dotCloud went from looking like a potential zero to a stroke of genius.

Docker financing rounds

Round
Year
Investors (among others)
Amount
Seed (dotCloud) 2011 Ron Conway, Jerry Yang $800 k
Series A (dotCloud) 2011 Benchmark, Trinity $10 mln
Series B 2014 Greylock, Insight $15 mln
Series C 2014 Sequoia $40 mln
Source: Docker, TechCrunch

In October of that year, dotCloud became Docker and said in a blog post that the software had been downloaded 100,000 times. It was, in start-up speak, the ultimate pivot.

"There was definitely a deliberate strategy of saying none of this matters on the business side if we don't have a critical mass of people using it," said Hykes, who grew up developing software in France. "We were very attentive to the needs of developers."

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The project has its detractors. CoreOS, a San Francisco-based start-up that's helping developers run massive applications on minimal infrastructure, was a happy member of the Docker community in the early days. When Docker moved beyond its core container and started building a portfolio of add-on tools, CoreOS founder Alex Polvi grew concerned that the simple container was losing its utility and that it had some security flaws.

So he created a rival product called Rocket, unveiled in December, for developers that may be equally concerned about Docker's increasing strength.

"We wanted to have that stand-alone component that companies could use," Polvi said. "We built Rocket, because we saw Docker moving off of that and becoming a whole soup-to-nuts platform."

Dan Scholnick, a general partner at Trinity Ventures and Docker board member, accepts that Docker will face critics as it grows up. But to suggest that Docker is pushing users in a particular direction or abandoning its stance on open source is inaccurate, he says.

"The Docker strategy has always been batteries included, but not required," said Scholnick. "You can take any component of Docker and use it without having to use the whole suite."

Nevertheless, Scholnick said it's good to have challengers to keep the company focused "even if the reasons why people are doing it are somewhat disingenuous."

For Golub, the bigger concern is expanding the company rapidly enough to meet developer demand. Docker has almost quintupled its employee base from just over 20 at the beginning of 2014 to close to 100 today, with plans to reach about 170 by year-end.

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In the meantime, Golub can take advantage of the benefits that come with having massive partners. That gives Docker the kind of distribution that was never available to previous generations of emerging software companies.

"By putting the Docker package in the Azure marketplace, all of our users immediately have access to their technology," said Mike Schutz, general manager for cloud platform marketing at Redmond, Washington-based Microsoft. "Historically it's been quite challenging for start-ups to really get over the hump and scale."

Having the giants of technology deeply interested in what you're doing is a blessing and a curse.

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Partnerships, press releases and C-suite access are great. But companies like Google, Amazon and Microsoft are so focused on cloud development that if they see a big business opportunity, they can throw unlimited resources at creating competitive products.

That's what keeps Scholnick up at night and why it's so essential for Docker to create a loyal customer base of big spenders.

"What I worry about most is our opportunity getting chipped away at by other players in the ecosystem such that there's really nothing left for us," Scholnick said. "We're in a really fortunate position and we can't take it for granted."