Interview As the IT industry faces an inflection point thanks to AI, lessons can be learned from Docker in how a company can – or must – pivot in the face of a changing reality.
Scott Johnston, longtime CEO of Docker, was at last week’s Kubecon event to talk up the arrival of Testcontainers on Red Hat’s OpenShift – a handy development tool to use cloud-native resources. However, Johnston also spoke to The Register about the challenges of shifting strategy and dispensed advice for those pondering a license change.
Johnston is a Docker stalwart, having joined the company in 2014. He became CEO in 2019 at the same time as Docker was facing an existential crisis. It might have been the container king, but it was losing the container runtime war.
In a 2019 blog, the then CEO Rob Bearden announced Johnston’s appointment and admitted the developer and enterprise business were “vastly different.” Mirantis picked up Docker’s enterprise business while Johnston pressed ahead on the developer front.
Behind the scenes, things were grim. Docker was competing with Red Hat. Johnston explains: “We were both monetizing the runtime. They were monetizing the OpenShift runtime. We were monetizing Docker enterprise.”
Things were not going well.
“It was really painful,” Johnston says, “with the management of the board in 2019 sitting there, looking at the state of things, who said ‘this business is ok… it’s not a great business.’
“The second significant input was we had the data on the developer consumption, which we were not paying attention to. So we could see the downloads from Hub, we could see the consumption of the open source, we could see the love of Docker desktop…”
We have 17 million registered developers. We don’t have to monetize all 17 million to have a fantastic business…
“We just looked at ourselves in the mirror and said, ‘we’re not paying attention.’
“That is where we’re not competing with a bunch of others. That is where developers are the new kingmakers … let’s go build a business around that.”
Docker has been gradually increasing its prices and fiddling with tiers in its search for a sustainable business model. In 2021, the company renamed its Free plan to “Personal” and introduced a considerably costlier Business tier aimed at extracting cash from companies that might have previously used the product for free.
“We didn’t change our open source licensing. Docker Desktop was always a proprietary product that had open source embedded in it… what we did is we changed the licensing and pricing around Docker Desktop.”
He notes the tech industry’s habit of thinking of itself as the user and asserting that developers don’t pay for software. “Well, you go outside the tech industry, you go to banks, you go to healthcare, you go to manufacturing, those developers do tend to pay for tools.
“And, I think that was one of our realizations.”
Then, there is how to make money in the space. Johnston says: “We have 17 million registered developers. We don’t have to monetize all 17 million to have a fantastic business.
A very small subset of those millions is sufficient. Hence, the tiers.
Docker is not alone in seeking a sustainable model to keep the lights on while not alienating its user base. Several organizations, such as HashiCorp and Redis, have changed their licensing terms in ways that raised the eyebrows of some within their user communities.
Johnston was cautious not to lob stones at the decisions taken by others. “It’s a tough place to be,” he says.
“From our own experience of this, expectations management is the foundation of all of this… communities hate surprises, and we’ve made our fair share of that, and we’ve also learned from that and have learned how to not to surprise the community and get in front of issues and make it very clear – the whys behind our changes.”
“Explaining those whys to our community, like why we’re starting to monetize Hub, why we’re starting to monetize desktop, has gone a long way.
“So those are lessons learned that, if I look at some of the other moves around the space, they’re learning those lessons as well.” ®
