Can DevOps drive another record year for software M&A deals?
By now, ‘DevOps’ is not a new concept; it’s a word that’s on the lips of every developer and IT person (reborn now, of course, as ‘DevOps engineers’.)
Yet the prophecy of DevOps has failed to fulfill itself as described in its texts. The DevOps meme continues to mutate. Meanwhile, the ground itself is beginning to shake with the footsteps of giants like Atlassian, Github/Microsoft, Cisco, IBM, VMware and more. It seems that the real tectonic shift is yet to come.
To understand the amazing future we are rocketing towards, we should review this ongoing story so far, starting with the birth of DevOps.
DevOps is born
DevOps, the bastard child of scale and agility, was born of the needs of modern software. As the roles of the software and especially, its orchestration became more crucial, software projects’ need for scale, speed, and complexity grew rapidly. DevOps has seen fast and significant growth, largely thanks to the increasing adoption of cloud technologies, and the maturity of new business models like SaaS and PaaS.
Learning from the agile revolutions of a previous age (e.g. Kanban at factories) the heralds of DevOps called to bridge the work-in-progress gap between development and IT operations, identifying it as the greatest barrier to scaling up software. The world rejoiced and proclaimed DevOps as King. The idea was to minimize this gap, mostly by empowering developers to lead IT operations. However, many misinterpreted the meaning, and settled for just renaming their IT-ops as“DevOps”.
And so it seemed that history was bound to repeat itself and that nothing would really change.
DevOps – ACT II
Yet the story is not yet complete. The pressure is continuing to build up just under the surface, as software projects become more and more complex. Engineers and the companies they work for are moving and adapting, but the more impactful movement is occurring deeper under the ground, in the tectonic plates themselves – the vendors – those who produce dev tools, and those who produce ops platforms.
Specifically, the big vendors, the titans of these respective domains, are leading the charge, guided by the pain points of their customers. They are noticing how their customers struggle with the growing complexity of infrastructure and software; they notice the growing demand to better manage code as part of operations, the increasing need to better orchestrate and operate software with software, and the overall hype around the DevOps space.
From the DEV tectonic plate we see many key players making strategic moves towards ops: Atlassian, a major leader in development life-cycle solutions, is charging head-on into ops, with the announcement of Jira-Ops. Microsoft, via Github, is expanding into ops with the launch of Github-Actions, and even more so via Microsoft-VSTS – now renamed “Azure DevOps”. In addition, Google with Kubernetes (and its supporting plethora of solutions) has been ogling the ops space for quite a while now.
From the OPS tectonic plate, we have key players such as Cisco stampeding into DevOps and eyeing dev-tools with its huge ($3.7B) acquisition of AppDynamics, which is moving more into DevOps and dev-tools on its own. Meanwhile, we’ve seen significant growth for ops players who eyed the developer space from day one such as New Relic and Datadog (which focuses on fusing these cultures).
IBM shook the foundations with its massive acquisition of RedHat, signaling that DevOps is now a key aspect of software old and new.
In addition, even VMware, a classic ops leader, is snailing into DevOps and into dev tools with the acquisition of Wavefront in 2017. These all move together along with natural bridges between dev and ops, such as CI/CD solutions (e.g. Codefresh ,CircleCI), and of course the cloud-vendors themselves – most obviously seen with AWS’ acquisition of Cloud9.
A brave new consolidating world
There’s clear movement from both sides. Moreover, these plates are accelerating, moving faster and faster towards one another.
While these movements are likely to continue up to 2023. Yet following the pressures built up in 2016 – 2018, 2019 has all the makings of being an amazing year with true volcanic eruptions that will reshape the playing field.
We will be seeing many more players joining the movement, from waves of new DevOps/dev-tool startups that will be born in 2019 (likely targeting new layers on top of k8s, serverless and/or providing additional aggregation and management to these layers.)
Major Dev-tooling leaders, such as JetBrains, will take more active steps in ops, launching new products or offerings in the area, and other Ops/Networking leaders such as Solarwinds (which is already building an impressive DevOps portfolio) will join the game. Older model companies (like ServiceNow), which are already struggling with the basic shift to DevOps, will strive to merge and acquire the capabilities they lack, while even larger monsters like Salesforce will start new bids and acquisitions in the space as they gradually recognize it as a strategic field.
In the middle, between the two plates, companies which already combine Dev and Ops in a natural fashion will become major players in the overall market movement.
Ultimately, collision is inevitable. A key driving force of this conflict will be M&As. These mergers and buyouts speed the process but also hint at the eventual outcome when the plates fully collide.
2019 will be the year that the DevOps space really moves to maturity. We are bound to see more acquisitions as the new space consolidates. Gradually it will become harder to differentiate between the products and solutions, and between IT/ops/DevOps and another dev-tool. In this brave new consolidated world, almost all tools will be DevOps-tools, finally bringing the DevOps space the unity it has been dreaming of for so long