From point of sale terminals to connected cars, what we call customer ‘experiences’ are increasingly a result of software. That means the developer teams that used to power just the tech industry now power all industry. And rather than fret about globalization or “just in time production,” tech and non-tech companies alike are now increasingly concerned with competing through speedy code commits. Hence, the rise of developer platforms.
Today, developer platforms and development teams are becoming a dominant force in the software market where just a decade ago, they held little power or commercial interest. At Cloud 100, Edith Harbaugh, CEO of LaunchDarkly, Yancey Spruill, CEO of DigitalOcean, and Dave McJannet, CEO of HashiCorp, come together to discuss how their companies serve the global developer community, the strategies they’ve implemented to earn the trust of developers who use their products, and the stories behind how organizations and the world have changed due to developer innovation.
Developers are becoming the power behind the throne
“When I started my career, the technology sector was all hardware, but the ‘softwareitization’ has been swift,” says CEO Yancey Spruill. Suddenly, every business is, to some degree, in software. Its prevalence in products of all types has conditioned users to treat purchases less as possessions and more like relationships—you buy something because you buy into the company and outcomes, and trust that it’ll continue to improve. Behind that is software.
Similar to how software has revolutionized horizontal and vertical industries, the cloud “has enabled the democratization of software across the enterprise,” says Yancey. Historically, centralized IT departments served as a bottleneck for new technology entering the company—it had to pass through a rigorous procurement and security review. But cloud access has allowed developers to flourish and take the reins. “Eight or nine years ago, it got to where developers could choose the tools they use, and that’s really the origin,” says Yancey.
“Even 10 years ago developers were not as common, and the cloud was constricted to just high tech. Now it’s inside of everything—automotive, financial, manufacturing—everywhere,” says CEO Edith Harbaugh. “Don’t you think that’s directly correlated to the power developers hold?”
The shift is most evident in how companies are now spending to empower developers. “When I started in software, our quality assurance manager built our issue tracking system in Lotus Notes. Now, anybody who’s working in software is like, ‘Well why don’t you just buy JIRA and be done with it?’” says Edith. Many companies got their start before developer tools, such as JIRA, were even created, so many engineering teams just ten to fifteen years ago had to build their own solutions in-house. Relying on the power of SaaS solutions not only gives time back to developers, but they’re able to repurpose their time toward building competitive advantages for the business.
“There’s a whole wave of thinking that it’s better to release the budget to allow your developers to focus on the higher level activities that are increasingly core to what makes a company in any sector succeed,” says Edith.
Developers want and expect open sharing
Once developers began to control budget, it shouldn’t be surprising that the first thing they did was catalog their world via developer platforms. A strong egalitarianism ethos, present at the tech sector’s inception, still shapes developers’ outlook. Many feel compelled to share and open-source what works.
“Once they could innovate out of the confines of those narrow, on-premise platforms, they created this whole ecosystem and knowledge base around software tools that could be easily customized,” says Yancey. Now, platforms that cater to this audience measure a ‘developer happiness index’ as a proxy for success—as the CEO of LaunchDarkly will explain more below—because happy developers go on to advocate for great tools, spurring a virtuous cycle, which builds a developer ecosystem.
CEO of HashiCorp, Dave McJannet, talks about the fourth industrial revolution—the digital revolution— which we are living through now; he says: "This is a world where there really is no raw material other than an idea and some typed text.
“That allows a small number of developers to have an outsized impact. One developer can build something that allows their entire company to enter a new market and leapfrog past others. It is profound.”
Although, Dave adds a big caveat: It’s not really just that one developer. It’s that developer standing on the shoulders of 50 million other developers sharing ideas and code on repositories like GitHub. The developer population is large and growing and it’s broadened the definition of what a developer is and where they find each other. “We’re really appealing to many subsets,” continues Dave. “There are those building new applications, operations people, and networking people.” Understanding and catering to the needs of each is objective number one.
Developer happiness is a key success metric
For LaunchDarkly’s customers, Edith Harbaugh has seen that ‘developer happiness’ is an increasingly common measurement of productivity, and a leading indicator of success. “You need the people using it everyday to be happy,” she says. This has changed how software is bought and sold.
Gone are the all-knowing SAP or Oracle sales reps asking for the CTO’s signature on a seven-figure software deal. Now information is online. The top-down go-to-market strategies have been replaced by form-fills, free trials, and proof-of-concepts that might not be profitable in the short term but can scale into the millions if something works. Or that is to say, if the developer thinks it works.
“What we've seen over and over at LaunchDarkly is that when we have a developer that loves us and is very successful at their job, they take us with them when they go to a new company,” says Edith. “There’s no better feeling than getting that call from them. It’s an indicator we’ve done things right.”
A question that arises with developer platforms started on a freemium model is, can they be financially successful? Partly, it’s a question of how a developer’s need to be productive impacts the core of the business—and whether that holds true during a downturn. As many Cloud 100 leaders can attest, the answer is yes.
“Eventually the question becomes, ‘At what point does the relationship transition into more of a commercial partnership?’” says Dave. But he doesn’t worry. “Our True North is the user. We trust that if we add value to that user, over time, we will eventually build a commercial partnership because we know we can be an incredibly strategic differentiator for their business.”
By this, Dave means that all companies are no longer solely successful based on their ability to, say, build the most sophisticated vehicle. The vehicle is just a software delivery platform. Customers are now buying in with an expectation of future updates to stay ahead of the competition. “Markets are increasingly driven by users expressing a preference for experiences that are enabled by software,” says Dave. “So yes, while developers may not be the key buying stakeholder, they’re in the bullseye of what every company today is trying to do.”
Dave McJannet (00:06): Hi. I'm Dave McJannet, CEO of HashiCorp.
Edith Harbaugh (00:08): I'm Edith Harbaugh, LaunchDarkly CEO and co-founder.
Yancey Spruill (00:12): My name's Yancey Spruill, and I'm the CEO of DigitalOcean.
Edith Harbaugh (00:14): Thanks for joining us at Cloud 100. Today we're going to talk about developer platforms. Just even the word developer platforms is something new. 10 to 20 years ago, developers really didn't have much budget and weren't really purchasing software like they are now. So my question for both of you is: Why do you think that's changed? Why do developers suddenly have budget and the ability to purchase developer platforms?
Dave McJannet (00:41): Edith, I'll start with that. I think that the impact of developers has been growing for the last 15, 20 years. And I think the difference in our view is that historically, people didn't spend a lot of money on developer tooling, so developers were not an audience that people really paid that much attention to commercially. But I think what's happened is commercially, the developers have much more influence now in sort of bigger decisions that are being made around software purchases. I think it's actually the impact of both. It's sort of the developer tooling market is a relatively small commercial market, but it's that they have an out sized influence in the decision making process. And I actually think I credit Microsoft for it, honestly. I think Microsoft mastered this with their developer and platform evangelism function years ago and invested in that. I think it's borne fruit.
Yancey Spruill (01:27): Yeah. I would say that the cloud has really enabled democratization of software across the enterprise. And so where historically you'd have centralized IT departments that controlled new applications being brought onto the on premise infrastructure, and they had to manage security. They had all the program management procurement rules and all the rest of it. I think as the software tools that people could use have become easier to manage and not be decoupled from these big software platforms, enterprise platforms, I just think it's made it easier. And I think organizations got over the hump probably eight, nine years ago in allowing people who were closer to the applications to actually make the decisions. And there's nothing more powerful than with software developers in the organization, where they could choose the tools, and then the organizations still figure out all the other security and other things. But even that becomes less and less of an issue as the whole platform becomes cloud. And I think that's really the power of what we all are enabling in the economy.
Dave McJannet (02:35): I guess maybe I'll make another, sort of another angle on the question, it's that developers are the ones that spend their time working in software. And as the internet more broadly emerged, those people started to discover software. And I think that's the difference. No longer were they burdened by the legacy salesperson from Oracle to come and tell them about some new technology product. They could discover it for themselves. And by virtue of us all connecting on a common network, all the information's now accessible. So it shouldn't be surprising that the people driving the adoption of new software are those people that live and breathe and work in software every day. And whether that software's going to be deployed on prem or on cloud is sort of a secondary concern. It's more that the decisions around which software's going to get used are now being driven by people that live in the world of software. I think that's pretty different than maybe a decade ago.
Edith Harbaugh (03:32): I know what we've seen in our own customers is that developer happiness is an important metric, that if people are using it every day and happy with it, they're going to be happy at your company, as opposed to just taking whatever is given to them and maybe not being happy, and then going to another company.
Dave McJannet (03:48): Yeah. I think the cool part about that is that it sort of removed this barrier of the hegemony of a few software vendors in the world controlling what we all use because now the sort of this common network connectivity tends to favor the best technology that people like to use. So it's sort of you're not catering to the user need as opposed to the organizational need as the primary. And I think that's a huge inflection point, and it's a very different way of building a business candidly, because now we all understand the need to appeal to the user. And when those users move to their next company, they bring that tech with them, whether there's a PO in place or not. I think that's very, very different.
Yancey Spruill (04:31): I think the rise of open source and myriad of software tools are innovated outside of those narrow platforms that Dave referenced has also created this whole ecosystem and knowledge base around software tools that could be customized or more relevant for particular use cases. And depending upon the developer style, programming style, desires of the organization, they have way more flexibility. Trying to restrict that versus unleash it and the creativity that it enables, and I think that developer happiness scale or index is a good proxy for the people who are fueling growth, not just in tech companies. But most companies now need software as a key competency to enable innovation and productivity in their business.
Edith Harbaugh (05:21): A trend I've seen myself is that just a willingness to pay for tools for developer productivity. When I started in software, our QA manager actually built our issue tracking system in Lotus Notes. And now anybody who's working in software is like, "Well, why buy Atlassian Jira and be done with it?" It's like, "Well, Jira didn't exist back then." So I think there's a whole wave of it's okay to have the budget, and let's have our developers focus on higher level activities than building an issue tracking system, or DigitalOcean, or HashiCorp. Are you seeing the same thing in your own customers? Or is there still resistance to build versus buy?
Dave McJannet (05:58): Yeah. I think this comes to the nuances of business models a little bit too, that I think we've learned to make our products freely available to everybody so that they aren't faced with that decision so early. And so I think as companies mature, we're building products that appeal to developers. And then the question always becomes: Okay, at what point does that transition to being more of a commercial partnership so that they sort of make the build versus by leap?
Dave McJannet (06:32): We see, our view is a little bit purist, candidly. Our true north is the user. And we just trust that if we add value to that user over time, we can build a commercial partnership with them. And so I think that true north is always the user, so absolutely, we come up against people in the build category all the time, and that's totally okay.
Yancey Spruill (06:57): Yeah. And I would say our whole mission is that we create a platform for people to build on. And our customers are testing code. They're building a business, scaling a business on our platform. So they're fundamentally builders, entrepreneurs, developers. And we feed into that. And I think tools like ours, to Edith's point, people don't have to manage their own IT. Nobody thought that 10, or even 20 years ago for sure, and now no one thinks the difference of I'm going to outsource my infrastructure, and then focus the efforts of my talent, the capital I raised, et cetera, on productizing in my relationship with the customer. And we're facilitating our builders productivity through the platform and the tools that we build.
Edith Harbaugh (07:47): I briefly want to touch on that developers are also much more prevalent than I think they were 10 or 20 years ago. Cloud used to just be trained to high tech. And now it's also in automotive, financial, media everywhere. It's no longer something that's on the side or on the end. It is actually your same business. Do you think that's leading to the power of developers?
Yancey Spruill (08:11): Obviously, almost every business has a relationship through the web. And having the tools and the powering behind that from a productization perspective, distribution, branding, et cetera, it's all tied to software. Whereas, when I started my career, very little of it was software. It was emerging as hardware, but it was all sort of physical. And the increase in softwarization of the economy is just making all businesses, software companies, they have to have a competency in software.
Dave McJannet (08:44): A developer can build something which massively increases the productivity of the entire company. They can build something that allows them to enter into a new market and just leapfrog to others. And I think that is what we're in the midst of, is sort of this industrial revolution driven by digital, whereas the previous industrial revolution is about manufacturing. In a world where there really is no raw material other than an idea and some text typed into an editor, your only constraint really is your imagination in terms of businesses you can build. And I think developers are the ones with that super power.
Edith Harbaugh (09:20): We're seeing that with our own customers, like BMW, where it went from you shipped a car, and then it just sat in your driveway and never changed. With software, they can continually update the car and give it more capabilities. So even stuff that we think of as static is now a lot more dynamic.
Dave McJannet (09:37): The commercial differentiator is no longer my ability to build the most sophisticated vehicle. It's actually, I've actually provided a software delivery platform that allows me to leapfrog every month what other people are bringing to market. I think that's how these markets are being won by our users and your users, is by expressing that super power that they have. So they may not control the budget, per se, but they're certainly in the bullseye of what their companies are trying to do.
Yancey Spruill (10:04): And the world has really evolved as well to the notion of software's not a product. Customer experience has been conditioned across the planet to expect change and updates in the product, not on annual or multi annual cycle like it used to be. And so it just has raised the prominence and expectation of all of us as customers or users of some product or service that the software aspect of it is going to continually make the experience better. I believe we all do things differently and that regard. I think it'd be good to talk about how we approach selling to, engaging, communicating with developers.
Yancey Spruill (10:45): And then the other is related is this whole area of developer evangelism. And how do we, how do each of us in our businesses sort of approach that angle to conditioning and building brand and capability and reputation across the developer community?
Edith Harbaugh (11:04): I think the key to success with developers is really recognizing that you have to make them happy and make them productive, and then also make a product that the organization which they work for feels comfortable purchasing. And I think the key is to have them both. What we've seen over and over at LaunchDarkly, and we serve six billion flags now, feature flags worldwide, is that we'll have a developer that loves us, is very successful at a job. Then they go to a new company, and they want to take us with them. And there's no better feeling than getting that call at the second, third job, where they say, "Hey. You helped me so much at my old job, and I want to buy again," that you're seen as a trusted advisor, where you're helping them do their job better. So that's a lot of our go to market activities right there, is just making sure that we have these built in evangelists monitoring our net promoter score.
Edith Harbaugh (11:55): The second motion then is being able to have a product that people can purchase for their company. If you're a huge enterprise, there's some table stakes in terms of GDPR, compliance, where it has to be basically enterprise ready. And I think for a long time in the developer landscape, there was seen at an either/or, that you were friendly to developers, and therefore not enterprise grade. Or you're enterprise grade, and therefore developers hated you. I think a really successful platform has both, something developers love to us, and that any company can purchase.
Dave McJannet (12:28): We think about it in a similar way, which is we try to step all the way back and go, "We actually don't just serve developers. Developers is just one of the audiences we serve. We actually have ops people, security people, networking people, and developers. So step number one is delineating your audience and saying, "I'm going to authentically commit to making that person successful whether they turn into a customer or not," because enterprise software at a certain degree is about trust. It's about trust for the tech decision maker, but it's also about trust with the practitioner that uses the tech.
Dave McJannet (13:00): So we delineate the audiences. We identify kind of the journeys that they're going to go on, and then we cater to them authentically. So the practitioner has a journey. The tech decision maker has a similar journey that says, "All right. I get that people inside my company like this tech. But I have a sort of different set of requirements. I need to be able to understand the why, try, buy, kind of journey that they go through." I think the delineation of those two journeys out of the gate that's really, really critical.
Dave McJannet (13:28): And number two, it's being deeply committed to the authentic successful completion for both those participants is how this is done at scale. As an example, our ... We, just to give a sense, we probably have about 25 people purely in our developer evangelism organization. That's all they do. We've [inaudible 00:13:50] fenced that investment as a separate thing. And their measurement is explicit. Is the developer, is the office security network person getting what they need from us, whether we have them as a customer or not? So I think it's that, it's the decoupling of those personas which is so key because I think you're right. Developers don't necessarily have a budget to spend, but they're enormously impactful.
Yancey Spruill (14:12): Yeah. I think our approach is similar on the evangelist side. We put a lot of effort, we call it community, and we treat the global sort of entrepreneur developer community similarly in that we invest in them. We produce a lot of free content. We hold events. We invest in their learning development with the notion that we're not trying to monetize every instance of their engaging with our content. We're really trying to help them get liftoff on the next idea because I think what Edith said is about absolutely true. If you win the hearts and minds by helping people make a breakthrough in opportunity one, or opportunity X, as they go throughout their career, they're going to come back because they're going to remember that we invested, we partnered with them.
Yancey Spruill (14:57): Frankly, we're part of that ecosystem. And I think that is a key aspect that's very different than the traditional model around selling software, where it was very transactional, very terms and conditions, very much sales cycle. This is much more about a long-term. We view it as a long-term commitment as a part of this broader community that we invest in. And it's really core to our essence. And I think it's why we've been successful and have over 500,000 customers today, but many, many millions, we have an order of magnitude more than that of people who touch DO in one way or another, whether it's reading tutorials, going to an event and learning about technical issues that matter to them.
Edith Harbaugh (15:39): For LaunchDarkly, we were really starting a new category of feature flagging and feature management. So a lot of our early evangelism was just that, hey, there's a better way to build software. We did not invent the technique of feature flagging, but I and my co-founder really thought that this was just something that everybody should be using, and that there should be a product out there that made it easier. So we've always had kind of a dual path of just feature flagging is a better way to build software. And even if you don't use LaunchDarkly, though I sincerely hope you do, and thank you Dave and HashiCorp of being our customers, even if you're not using us, this is a great way to build software. And once you're happy with feature flagging, you should consider us. But it's a very genuine effort from us to just build better software.
Dave McJannet (16:24): You guys are a great example of how big these markets are. Think about the software development life cycle, feature flagging is something all of us were doing for many years, but we were all doing it ourselves. And as this community's gotten bigger and bigger, what's popped is actually everybody's trying to struggle with the same stuff, and entirely new software categories are getting created within the developer ecosystem as people are realizing, wait a second, everybody's trying to provision infrastructure on multiple places. Why are we all reinventing this? Everybody's trying to do feature flagging. And I think you're seeing some really large companies getting built on the back of what is really a TAM expansion that none of us appreciated how big these TAMs were. You shared the number, it's five billion feature flags a month or some enormous number that none of us could ever have imagined that would be the scale.
Edith Harbaugh (17:17): Yeah. Dave, just to clarify, this might surprise you, but it's actually six, six trillion with a T features every day.
Dave McJannet (17:27): Yeah. Six trillion features a day.
Edith Harbaugh (17:32): Yeah.
Dave McJannet (17:32): Just an amazing, amazing number. So we've been talking a bit about the go to market models around developers and sort of the notion of developers. But I don't think we talk enough about the impact of the developer platforms that we're all building. So maybe, Yancey, what's unique about your developer community that jumps out at you?
Yancey Spruill (17:58): Well, I think what I'm struck by every customer that I speak to, they're all over the place, 100 plus countries. And what we enable is the fact that 10, 20 years ago, for someone to chase an idea, to stand up their own IT and buy the hardware, the software, the cooling and the data center, the network connectivity, et cetera. It's just the barriers to entry for any single idea were just too large, measured in tens of thousands, in some cases, maybe hundreds of thousands, just for the core IT.
Yancey Spruill (18:36): To me, that's the power of what we can enable, is that the old models of really expensive, complex software riding on complexity, on complexity, just didn't enable people to be themselves and chase dreams. And that's the common ideas that we are unleashing human potential at virtually no cost. And you're seeing why that's creating a much larger TAMs, as Dave referenced earlier, and huge platforms are evolving out of it.
Dave McJannet (19:09): Ultimately, this is about people building new things. That's what's happening in the world. People are building new digital applications. And they're building them on a different platform than they used to. And I think they used to build ... If I had to build a new mask extension application, I would've built it on prem in a very traditional way. And your developers would be doing things they've been doing for 20 years. And I think what's happening now is actually the new platform that are places like DigitalOcean, they're cloud platforms, where those applications are getting deployed.
Dave McJannet (19:40): And that's exposing how completely horizontal these software markets are for all of us. It's wait a second, it's not just the high tech companies that are building new applications on cloud. They've figured out the blueprint for how to do it, but actually, it's the global 5000 that's now doing it. And so the platforms that we have built initially to meet the needs of a very specific set of users who are our peers here in Silicon Valley, whoever it might be, because we were the ones building that new applications on cloud. Those have become very horizontal platforms that actually in a sense surprised us at how big the TAMs are. We can't talk about what we're doing without just maybe referencing a little bit of what's going on in the macro. Maybe Edith, just any comments on the impact of sort of the macro COVID piece, the shift to work from home, and maybe how that's impacting your company in ways that you may or may not have expected?
Edith Harbaugh (20:38): COVID has definitely increased a trend we were already seeing towards digital transformation. It has accelerated many projects of a bank saying, "How do we get people to check their balance online?" To okay, everybody needs to check their balance online because we don't want them to come to the branch right now. So a lot of projects are getting just accelerated greatly because of need.
Yancey Spruill (21:00): Obviously, everyone's disrupted. The thing about this is every single human being knows about it, it's been impacted by it. Economic crises, there's lots of data historically that says that's a catalyst for a lot of entrepreneurism. In fact, a lot of cloud giants today were formed in that '07, '08 timeframe, the last crisis that we had. So we're definitely seeing that, and so that's good. That's accelerating and allowing our customers to thrive during this period and serve bigger market opportunities as the world changes.
Dave McJannet (21:33): It's curious, people keep talking about how this macro shock is accelerating trends. I mean, my parents now know how to use Zoom, and that probably wouldn't have happened for another few years previously, just as an example. And digital transformation is one of the huge things that is getting accelerated because people are saying, "If I don't have a digital relationship with my customers, I'm going to have a major issue." And paradoxically, our companies, or actually, all of us, are actually all built on the back of digital engagement with our customers because that's just how you engage developers.
Dave McJannet (22:12): I can't go to 1000 meetups and meet people, so our businesses are fundamentally using a digital distribution channel, which is a digital relationship with our customers to engage them. You couple that with the fact that it's accelerating the shift to cloud as the new place for building applications. And I think the market shift is, despite all the macro headwinds, there's some positivity embedded when you look at the math. Obviously, I think all of us are hugely convicted of the power of the developer, the importance of the developer, whether they are making the purchase decision, or whether they're influencing it as it relates to building businesses. So thanks, Edith and Yancey, for spending the time with me and talking through this. We're certainly all very pleased to be recognized on the Cloud 100, and excited to be back here next year, so thank you.
Yancey Spruill (23:12): Thank you. Really enjoyed the conversation. And congratulations to you both for also being in Cloud 100.