Billion Dollar Unicorns: Containers Gives Docker Entry into the Club

According to recent research reports, the global open source software market was estimated to be worth $2 billion in 2013. But there is a rapid increase in the adoption of open source tools. Researchers peg the number of open source projects in 2014 to double to nearly 2 million. Billion Dollar Unicorn club member Docker is helping grow this interest in open source tools.

Docker’s Offerings

San Francisco-based Docker was founded in 2010 by Forbes 30 Under 30 and YCombinator alumni Solomon Hykes. Docker initially began as an internal project within Solomon’s previous company dotCloud. It began as a Platform-as-a-service (PaaS) cloud offering that allowed for building and running applications. By 2013, the company had pivoted to using the technology of containers and becoming an open platform instead.

Today, Docker helps developers and system administrators create distributed applications. Their platform is based on the concept of Docker Containers that use resource isolation technologies to isolate the application’s view of the operating system. It thus allows for applications to be created and run in isolation. The container model helps developers create applications without being dependent on application and infrastructure, thus accelerating the software development lifecycle and improving infrastructure cost and efficiency. Simply put, Docker Containers package application code in such a way that developers can then deploy on any server environment without changing the code.

Docker claims that companies who use their containers and tooling technology experience a 7x improvement in the frequency at which they are able to ship software. Their solutions are used by web-scale companies like Baidu, Cambridge Healthcare, eBay, Gilt, Groupon, Spotify, and Yandex. Till date, they have seen more than 400 million Docker Container downloads, over 75,000 Dockerized apps in Docker Hub, and over 50,000 third party projects using Docker.

Docker’s Financials

Docker’s biggest challenge for now is in turning their technology into a successful business model, given that their core technology is available for free. The company is gradually beginning to meet that goal as well. In December 2014, they made additional services available to organizations for a price. These features include training and selling private hosting services. Customers can choose from multiple subscription service offerings depending on the features that are needed. The basic service is available for free and allows access to unlimited public repositories and one private repository. Prices go as high as $50 per month for hosting services that grant organizations access to 50 private repositories.

Docker does not disclose their financials. They have been venture funded so far with $150 million in funding from investors including Goldman Sachs, Coatue, Northern Trust, Lightspeed Venture Partners, AME Cloud Ventures, Trinity Ventures, Sequoia Capital, Greylock Partners, Benchmark, Sequoia Capital, Jerry Yang, and Insight Venture Partners. Their last round of funding was held in April this year when they raised $95 million in a round led by Insight Venture Partners. The round helped them join the Billion Dollar Unicorn club as they were valued at $1 billion. An earlier round held in September last year had valued them at $400 million.

Docker is currently posing a big threat to giants like Microsoft and VMWare who offer their own virtualization offerings. VMWare is trying to work with Docker and last year they entered into an agreement with Docker to work together on a product that will integrate VMware’s cloud technology with Docker’s services.

More investigation and analysis of Unicorn companies can be found in my latest Entrepreneur Journeys book, Billion Dollar Unicorns. The term Unicorn was coined in a TechCrunch article by Aileen Lee of Cowboy Ventures.

Looking For More Hands-On Advice?

I receive many emails from entrepreneurs who want to discuss their specific businesses. I’m very happy to discuss your situation during my free online 1M/1M Roundtables, held almost every Thursday. During each roundtable, up to five entrepreneurs can pitch their businesses and receive my immediate and straightforward feedback.

To give entrepreneurs all over the world access to Silicon Valley’s knowledge, methodology, and network, I founded the One Million by One Million (1M/1M) global virtual incubator. 1M/1M aims to nurture a million entrepreneurs to reach a million dollars each in annual revenue and beyond, thereby creating a trillion dollars in global GDP and ten million jobs.

For those still testing the waters of entrepreneurship, I’ve written my Entrepreneur Journeys book series to inform and inspire. My newest book, Billion Dollar Unicorns, is now available from Amazon.

If you are interested in entrepreneurship topics and my writings, you can follow me here. I hope to publish articles on LinkedIn every week.

Photo credit: Michael Coghlan/Flickr.com.