Here's why investors are betting hundreds of millions on 2 developer technologies that are helping big companies act like startups

Edith Harbaugh LaunchDarkly

  • Continuous integration and continuous delivery startups have raised hundreds of millions of dollars in venture funding.
  • CI/CD is a pair of intertwined processes for delivering more code, more quickly, to more people.
  • Investors and customers are flocking to these startups: They help developers spend more time coding and less time managing their information-technology infrastructure and debugging.
  • GitLab, CircleCI, and CloudBees are some of the leading startups in this space, but many others are becoming prominent amid the rising trend.
  • Here's why.

In the old days, customers would have to wait all year for a new software release. And that release could bring new bugs. Then, by the time the developers finished fixing the bugs, it would already be time to start getting ready for the next release, starting the cycle all over.

That slow process is becoming obsolete. Now, it's possible to make changes and release them to customers instantly — the same way that Facebook, Google, and other tech companies roll out new features that appear as soon as you refresh your browser.

Now, as software continues to eat the world, investors are flocking to companies that are helping their customers achieve the same kind of speed.

The key practices are called continuous integration and continuous delivery. With CI/CD, companies can release changes to customers as often as they want, whether it's once a month or 20 times a day. At first, mostly startups used this process, but as larger companies continue to modernize their digital footprints, they too are jumping on board, as a way to keep up with their Silicon Valley rivals.

"The benefits are really speed and agility," Edith Harbaugh, the CEO of the feature-management platform LaunchDarkly, told Business Insider. "If you release every year, you're a dinosaur now. If everyone releases multiple times, you're left behind. … Nobody wants to be the Blockbuster of tech."

Indeed, companies like Netflix, Etsy, and Sony are said to have adopted CI/CD to keep up with competitors, small and large.

gitlab founders

There are already high-flying startups that have begun emerging as leaders in CI/CD. GitLab, named by analyst firm Forrester as the top leader in CI, has raised $145.5 million in total, as the $1.1 billion startup grows beyond its roots as an alternative to Microsoft's just-acquired GitHub. Other CI leaders include CircleCI, which has raised $59 million, and CloudBees, which has raised $113.2 million.

And the growth isn't going to stop anytime soon. Research shows that the market for CI tools is expected to grow from $483.7 million in 2018 to $1.14 billion by 2023. As for CD tools, the market is expected to grow from $1.65 billion in 2018 to $3.85 billion by 2023.

"The speed with which you can innovate in a business is determined by how fast you can ship software," GitLab CEO Sid Sijbrandij said. "CI and CD helps you ship software faster. That's what all the businesses need. By testing it automatically and deploying it, you don't have to wait for human testing."

What is CI/CD, anyway?

Although the concepts of CI and CD have been around the 1990s, it started becoming more popular after the birth of Jenkins, the widely used open-source CD platform, in 2004. CloudBees took the free Jenkins software and used it to build a popular version designed for larger businesses, which is also popular.

"CI and CD will be part of any organization. We're just at the start of this," CloudBees CEO Sacha Labourey said. "It's an exciting time for the CI industry. The entrenched vendors are not equipped with that. At the same time, we're able to generate a meaningful business model. What we're seeing on the market is this big war between the classic players who are not in shape."

CI/CD really took off with the rise of cloud computing. It's hard to push out big changes to a code base that lives across multiple servers, across multiple data centers. It becomes much easier, however, when all that code is centralized in a public cloud platform like Amazon Web Services, Microsoft Azure, or Google Cloud.

CI means that developers integrate their software to an organization's central code base as often as possible — as in, continuously. But before the code gets added to the code base, these developers must run automated tests that make sure the code is working correctly. So, to properly do CI, you need to be continually testing the code, too.

Continuous delivery builds off of CI, but involves the processes by which those code changes are released to customers. With the click of a button, development teams using CD can update their apps and services with new features for some or all of their users.

While most people talk about CI/CD as two halves of a whole, there's a third process that's sometimes used, too: continuous deployment. Under a continuous-deployment model, code is automatically released to customers as soon as it passes those code tests, with no human intervention involved.

Continuous deployment is the ultimate expression of these principles: The only thing that stops new code from being integrated and rolled out to customers are those tests. It actually makes some companies uncomfortable, according to cloud-hosting company DigitalOcean, because it means taking humans entirely out of the loop.

Why are investors excited about CI/CD?

Dave Munichiello, general partner at GV (formerly known as Google Ventures), said the firm's criteria for investment now includes how much time a startup spends inventing — that is, actually writing code and improving their product — versus managing their servers, infrastructure, and information-technology operations.

"Software developers are creating and generating intellectual property. The more time software developers can spend on inventing and less on wrangling developer operations, the faster the company will be able to innovate," Munichiello said.

Last year, GV invested $20 million in GitLab. In the past year, Munichiello said, CI/CD has grown like crazy, driven by the fact that the largest of large companies now want the same capabilities as the most innovative startups. Ideally, engineers should focus on the product, rather than doing infrastructure work that is now increasingly being automated by CI/CD tools.

"Investors are excited about CI and CD because it accelerates inventors' ability to innovate within companies," Munichiello said.

Dave Munichiello GV

Growth in CI/CD has accelerated since the beginning of 2017, said Jim Rose, CEO of startup CircleCI, which creates tools to automate software delivery.

"From a software-development perspective, to run fast, you need to be able to automate as many processes as possible," Rose said. "It's an opportunity for you to create automation around that task so your developer doesn't always have to reinvent the wheel. You can focus your software developers and team on higher-value problems."

And the fact that CircleCI makes the process much easier for developers really enticed investors. Andy Vitus, a partner at CircleCI investor Scale Venture Partners, said that when meeting with developers, they often complain about the time spent fixing bugs. With CI/CD tools, testing for bugs is more automated, saving time and energy.

Read more: Investors used to balk at startups for software developers — but after Microsoft bought GitHub for $7.5 billion, they're all in

The downfall of 'waterfall'

Tools like these contrast with the days of the "waterfall model," the traditional method for getting software out, in which code goes from an engineering team, to a testing team, to an operations team, to customers, in a process that's often criticized as too slow-moving and rigid for speedy software development.

LaunchDarkly's Harbaugh has seen the pain of bad releases in her career as an engineer and product manager. This motivated her to create a platform that makes it easier to push out features to customers.

"When I started as an engineer, it was the heydays of waterfall," Harbaugh said. "It just didn't work. We would release once a year, and stuff wouldn't work. Then we would have to spend an entire year fixing it. Versus, if we had to release monthly, we could have a more dynamic turnaround time."

Jens Schumacher, the head of software teams at Aussie tech giant Atlassian, also recalled that when he was working in software 20 years ago, releases came every 18 months or every year. When he joined Atlassian 14 years ago, he was excited to find that it released new updates every 90 days. Today, software teams at Atlassian and elsewhere deploy to the cloud all day, every day.

"The changes you make in the day or the week are much smaller than the changes you make in a year," Schumacher said. "Imagine 20 developers working on a product for a year and having to figure out what went wrong when they ship it. It's much easier to debug changes that just happened yesterday. It's much easier to revert changes."

Just the beginning

These companies are continuously working to make the development process more automatic. And CI/CD isn't going to go away anytime soon. In fact, insiders say it's the beginning of a trend.

"I don't see it slowing down at the speed we release software," Vitus, the investor with Scale, said. "Once you're there, you don't ever go back. I would say the idea of doing things continuously will never go away."

And for companies that want to move to using CI/CD, they have to completely upend their design process and spend time writing automated tests. But once they get past these hurdles, the investment pays off.

"When we spend time with companies, we're not asking what their cash flow is or their profitability," GV's Munichiello said. "We're spending time thinking about what are you innovating, how fast will you invent, and how well is your team able to respond to feedback from the market and adapt over time."

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Contributer : Tech Insider https://ift.tt/2zUHHnK
Here's why investors are betting hundreds of millions on 2 developer technologies that are helping big companies act like startups Here's why investors are betting hundreds of millions on 2 developer technologies that are helping big companies act like startups Reviewed by mimisabreena on Saturday, November 17, 2018 Rating: 5

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