A fundamental shift in the economics of the infrastructure startup—a shift that decidedly favors developer skills and culture—is set to transform IT markets ranging from networks to databases.
So asserted Martin Casado, General Partner at VC powerhouse Andreessen Horowitz, at his Wednesday AM Interop keynote.
In support of his assertion that we are on the cusp of a "Cambrian Explosion" of developer-led innovation in the infrastructure space, Casado highlighted three key trends:
1: The move from hardware to software. Casado highlighted the fact that the ability to deliver functionality such as switching in the form of code that can run anywhere, rather than as intellectual property wrapped in sheet metal, removes significant barriers to entry. No longer do startups need to build physical supply chains, inventory product, move product through conventional distribution channels, etc. Instead, they can focus their limited R&D resources on differentiated code.
2: As-a-service delivery models. While software may be easier to bring to market than hardware, it still has historically had its own sources of friction. Every customer's environment, culture, and skill-sets are different. So when you sell them software, you have lots of "Day Two" support issue to contend with. As-a-service models eliminate much of this friction by allowing vendors to run their software on their own bespoke infrastructure—paving the way for them to scale quickly while keeping customers happy.
3: The rise of the developer. Casado sees this as perhaps the most important and most misunderstood aspect of the epochal change he predicts. Software-defined infrastructure solutions obviously depend to a greater degree than ever on the skills of the developers involved. But Casado contends that the impact of this reality goes far beyond a mere increase in demand for competent coders. Rather, he sees the shift of market-making power as a game-changer.
That's because the biggest go-to-market hurdles for infrastructure vendors have historically revolved around building and maintaining complex customer relationships, nurturing channel partners, cultivating analyst mindshare, aligning with IT staffs' existing certifications, and the like. These factors all play to the advantage of incumbents with large sales teams, long-standing alliances, and highly trained tech support.
Developers see the world very differently. They generally don't care about the channel's business needs or the published opinions of top-tier analysts. Their culture instead places a premium on traction with other developers, on the emergence of active peer communities, on technical elegance, and on open source.
It is this stark contrast that has enabled companies like Waze, GitHub, and Okta to achieve phenomenal growth in short order. And it is this stark contrast that Casado believes will ignite major disruption in infrastructure.
This disruption is technologically enabled by the new "insertion points" that permit developers to deliver software-based intelligence on top of customers' existing hardware platform. These insertion points include hypervisors, virtual appliances, Linux kernels, containerization, and OpenStack.
Casado emphasized that developers are not necessarily influencing the technology buy side, which is still governed by corporate IT and its prevailing imperatives. But because developers are poised to present those corporate IT buyers with radically new options, they are likely to disrupt the enterprise infrastructure market as it has operated for the last couple of decades.
The credibility of Casado's assertions are bolstered by his personal experience as co-founder and CTO of Nicira, a software-defined networking startup that was acquired by VMware in 2012.
Casado did not address how issues of risk, indemnity, and technology debt might or might not inhibit the Cambrian Explosion he posits.