Container platforms are a hot topic in the enterprise. They represent a top investment theme in the executive stories of digital transformation and cyber-security initiatives at the upcoming fall conference of ONUG, one of the top enterprise cloud user groups representing over $150B in annual IT spend. However, container platforms fall within the cloud management platform market that struggled to build momentum for most of the first decade of cloud computing. I still find senior enterprise decision-makers who are skeptical of container platforms as the latest set of options. They often do not recognize how quickly their options have matured in the past couple of years. Today I’d like to delve into the combination of related factors that have driven this rapid maturation and the variety of options available for enterprise consideration.
Over the last several years, the market has consolidated around Kubernetes. RHETT DILLINGHAM
Container platform and services vendors focus on Kubernetes
First, vendors, customers, and the tooling ecosystem have consolidated around Kubernetes as the top container orchestrator to underpin general purpose container use. This consolidation began a few years ago when public cloud providers and container platform vendors began announcing the addition of Kubernetes services (e.g. Google as Kubernetes project founder) or shifting their own container orchestration to Kubernetes (e.g. Red Hat ). It essentially concluded in 2017 when each of the other largest public cloud providers introduced a Kubernetes-based container service (e.g. AWS, IBM, Microsoft , and Oracle), and each of the other top cloud management platform vendors announced either the addition of support for Kubernetes (e.g. Docker and Mesosphere ) or announced a new offering based on Kubernetes (e.g. Pivotal and VMware ).
Second, Kubernetes has matured sufficiently as a technology, along with its supporting technology ecosystem of network, storage, monitoring, and other tools, to enable broad enterprise consideration as an option along with, or as an alternative to, existing platform technologies with strong enterprise adoption, such as Cloud Foundry and Mesos. In just the past year, enterprise feedback has shifted substantially from focus on stability and features for high availability production operation to software ecosystem features and support necessary to expand the types of applications they are able to deploy.
Container platform market consolidates
Third, the previously highly-fragmented cloud management platform market has consolidated as large enterprises, as the dominant source of spending, have focused their purchasing on a short list of software vendors. Large enterprises recognize the importance of their bet on a cloud management platform. It is a bet that can quickly grow to over a million dollars in annual spend, involves large-scale training of developers and operations roles, and often requires cultural and organizational changes in order to fully embrace and take advantage of the speed and agility benefits (such as faster innovation and time-to-market). In other words, this is a big bet to enable revenue growth, not just an incremental vendor support contract to shore up expertise in a technology or address security risk. More and more, enterprises choose to bet on a trusted vendor over an early stage startup in this space where the large vendors have caught up to the initial innovations of the startups.
On the other end of the target customer segments, early to late stage cloud-native startups typically begin with full embrace of a single public cloud vendor for simplicity and speed. Because of this, the public cloud providers are seeing a lot of success in driving this customer segment’s adoption of their container and Kubernetes services.
This has left the cloud management and container platform startups in the very difficult position of trying to win enough adoption to emerge from the pack. Only two in my view have clearly emerged with the scale of adoption and late stage funding necessary to compete in product development and go-to-market at scale, and those are Docker and Mesosphere. Other startups were acquired in the last 18 months during this cycle of consolidation. Most of these acquisitions were primarily made for the immediate value of adding their skills to accelerate efforts within an existing team. Those recently acquired include Deis (by Microsoft), Wercker (by Oracle), Apcera (by Ericsson ), and CoreOS (by Red Hat).
Top container platform options
This consolidation has left four top container platform options for enterprises to consider for deployment across multi-cloud (i.e. multiple public and/or private) infrastructures:
- Red Hat OpenShift: Red Hat was an early mover in transitioning its platform to Kubernetes. This big bet set it apart from competitors as a leader in contribution and expertise in the Kubernetes project and the broader Cloud Native Computing Foundation. This was amplified by its acquisition of CoreOS earlier this year, which integrated a leading Kubernetes startup team into the OpenShift team. With Kubernetes, Red Hat is executing its now standard playbook of developing then monetizing expertise in an important open source technology, as it did successfully with Linux and OpenStack. One big question is how broadly Red Hat can win Kubernetes adopters with OpenShift when it involves a significant embrace of Red Hat’s software portfolio, starting with the OS of Red Hat Enterprise Linux or CoreOS. Red Hat certainly recognizes this challenge and is taking steps to address it, as evidenced by its introduction last week of a new “Engine” version of OpenShift. “Engine” allows customers the option of applying their existing tools to container use — CI/CD, SDN, logging, etc. — instead of Red Hat’s tools.
- Mesosphere DC/OS: Mesosphere is building from its existing platform leadership in stateful (i.e. data store) applications into stateless applications where enterprises focus in their adoption of Kubernetes. Mesosphere offers Kubernetes as part of its DC/OS platform with feature emphasis on easing edge and multi-cloud deployments. Mesosphere has emerged strongly from the initial pack of startups into this group of leading vendors with 15 customers in the Fortune 50, including half of the top dozen global telcos and North American banks. The robustness of its platform has been proven out at extreme scale by many of the largest cloud-native startups, which aided its adoption in these more traditional large enterprises. It needs to grow enterprise awareness to achieve broader consideration, which has been enabled by its Series D funding round of $125M from earlier this year.
- Docker Enterprise Edition: Docker benefits from strong customer awareness due to its leadership of the Docker project during the pre-Kubernetes enterprise adoption of containers and has raised substantial funding of over $200M based on its market position. Docker struggled in 2016-2017 to convert its technology leadership position into a widely-adopted platform it could monetize. However, after significant company leadership and offer changes in 2017, Docker emerged with a differentiated positioning driving strong enterprise consideration based on ease of container-based modernization of existing enterprise applications. With commercial support for Kubernetes added to its container platform in April 2018 and paid adoption now over 500 customers, it has clearly emerged on the short list of enterprise vendors.
- Pivotal / VMware PKS: Pivotal has led the cloud management platform market on the strength of its Cloud Foundry offering and its consultative and training professional services geared towards digital transformation. Its challenge is bridging this leadership position into the container platform market with its Pivotal Container Service (PKS), which was delivered into general availability in February 2018. Pivotal was a late entrant into the container platform market, but its feature velocity in building out PKS has been impressive. Pivotal benefits from strong enterprise consideration thanks to its cloud platform market leadership position, its partnership with VMware and Dell EMC in go-to-market (as Dell Technologies portfolio companies), and funding for investment boosted by its IPO earlier in 2018. I list VMware with Pivotal as PKS vendors because customers can purchase and receive support from either vendor. While this helps VMware position as an innovative, cloud-native platform vendor, it hinders some of what could be Pivotal’s customer growth.
There are two alternatives that many – typically smaller – organizations continue to pursue. One is to rely on public cloud Kubernetes services. I noted how popular this is amongst cloud-native startups. It is also popular within pockets of enterprises when they are empowered to choose their own cloud provider and services. This has been a particularly big source of customer adoption for Google Cloud given its multi-year head start with its Google Kubernetes Engine (GKE) versus AWS and Microsoft Azure’s services.
The public cloud service option sacrifices the visibility and manageability of container deployments across organizations and multiple clouds, but that can be acceptable to companies with minimal cross-organization operational involvement. This option has been improved by cloud provider offerings that allow hybrid operation of the same service capability in private and public cloud, such as Microsoft’s AKS on Azure Stack, Google Cloud’s GKE On-Prem, and IBM Cloud Kubernetes Service on IBM Cloud Private. It is still the early days of these hybrid offerings; it is unclear how many enterprises will stick with that path for hybrid deployment versus shift to a full multi-cloud software platform.
The second alternative is to simply run native open source Kubernetes. This is a natural choice for the masses of application teams experimenting with and building out initial use of Kubernetes. However, most find that once they become dependent on production operation of the cluster, they value the automation and support of the container platforms or public cloud services in securing, updating, and managing each Kubernetes cluster. Cisco is working to build its market presence with its Cisco Container Platform focused on this segment of users starting on private infrastructure, while Heptio focuses on those starting in public cloud. Cloud managed services providers (MSPs) have also entered to offer managed operation of native Kubernetes clusters, including Hewlett Packard Enterprise, Mirantis, and Rackspace , but it’s too early to tell how comfortable that option will be long-term for enterprise.
Given the strength of options available, I see enterprise adoption of container platforms moving swiftly from early majority to late majority. Most enterprises will have made a significant bet on a container platform and/or service from a cloud provider within the next two years.