The evolving market for application containers isn’t just about developer adoption anymore; it’s now very much about investors, too.
The week of May 9, in particular, highlights the intense interest that venture capitalists (VCs) have in containers and the potential to profit from the new approach to building, deploying and managing applications at scale.
Over the course of last week, three container vendors raised a combined $63 million in new capital. The biggest funding of the week came from CoreOS, which raised a $28 million round Series B funds. Backers include GV (formerly Google Ventures), Accel, Fuel Capital, Kleiner Perkins Caufield & Byers and Y Combinator Continuity Fund. Total funding to date for CoreOS—which emerged in the last year to become one of the primary rivals for Docker Inc.—now stands at $48 million.
Rancher Labs, co-founded by executives that had previously founded Cloud.com, raised $20 million in Series B financing. Investors included GRC SinoGreen, Mayfield and Nexus Venture Partners. Total funding to date for Rancher Labs now stands at $30 million. The Rancher platform is a container management and deployment system that uses the Docker container engine.
The third piece of container funding last week came from Weaveworks, which raised $15 million in Series B financing. VCs included GV and Accel. Total funding to date for Weaveworks, which is building a platform for container and microservices networking and visibility, now stands at $20 million
All that investment, however, pales in comparison to what Docker Inc. has already raised—a staggering $95 million in the first part of its Series D round of funding in April 2015, bringing its total funding to more than $150 million. Docker’s investors include Coatue, Goldman Sachs, Northern Trust, Benchmark, Greylock Partners, Sequoia Capital, Trinity Ventures and Jerry Yang’s AME Cloud Ventures.
As the first mover in the container space, as the company that has virtually defined the current modern container runtime and packaging formats, it should come as no surprise that Docker Inc. has raised more money than its competitors and partners. It is interesting to note, though, that Docker’s Series B brought in $15 million, which is actually less than what CoreOS or Rancher Labs raised in their respective Series B rounds.
The total funds invested in Docker Inc. ($150 million), CoreOS ($48 million), Rancher Labs ($30 million) and Weaveworks ($20 million) add up to $248 million. That’s not including others in the ecosystem—like ClusterHQ, which builds the open-source Flocker storage project for containers, that raised a $12 million Series A in February 2015; container security vendor Twistlock, which hasn’t yet announced funding; or a large crop of startups, including new networking startup Tigera, all vying for a slice of the container market.
Why VCs Have Invested More Than $200M in Container Tech
Aside from startups, there are the established players like Red Hat, which is investing its own resources in containers, with its Project Atomic and the commercial Red Hat Enterprise Linux Atomic Host product, as well as the OpenShift platform-as-a-service (PaaS) technology that relies on containers. IBM is also betting big on containers, as is VMware and Microsoft.
So why is all the investment pouring into the container ecosystem?
The answer is simple. It’s about the future of applications. The legacy approach to application development, deployment and management is relatively intricate, with complex stacks of hardware and interdependant code libraries in order for an application to run. The promise of containers, the promise that Docker first defined, isn’t just about the container, but about the container packaging format. With the Docker image format, an application can be packaged to run on any Docker engine-enabled host. Rather than needing a separate operating system, as is the case with a traditional virtual machine, a Docker-style container makes use of resources from the underlying host operating system, enabling better performance and application density.
The Docker image format is now evolving to become a broader standard from the Linux Foundation’s Cloud Native Computing Foundation (CNCF) that defines a standard container image format. This isn’t a “Docker-only” party, though Docker is the early leader. The container revolution is going to be a standards-based approach with interoperability across implementations, a core promise.
Security is also the core promise of the container revolution. At the CoreOS Fest event in Berlin last week, I moderated a keynote Fireside chat with Linux security luminary Matthew Garrett, principal security engineer at CoreOS. The long and the short of the conversation is that applications can be run more securely inside containers than outside of them. CoreOS and Docker Inc. have invested and deployed robust scanning tools for application container security, as well as trusted computing mechanisms to validate the integrity of hardware and software.
Investors are interested in containers because they represent the future of all computing although it’s still relatively early days for the technology. Rather than the legacy approach of monolithic stacks on which applications run, the container revolution offers the opportunity for a microservices future in which application development, deployment and management is more agile and inherently more secure.
The container future is now being defined by early adopter developers and forward-thinking organizations that are pushing vendors and contributing to open-source projects to get the technologies they need. As container use grows in organizations of all sizes, there will be a growing need for vendors to support users, and that’s the opportunity that investors see today. Investors see a future in which container use is mainstream, and so too are paying container customers.
Sean Michael Kerner is a senior editor at eWEEK and InternetNews.com. Follow him on Twitter @TechJournalist.