This is how $1 billion startup Docker actually plans to make money

Docker

Docker CEO Ben Golub and CTO Solomon Hykes


Today, super-hot software container startup Docker announces a new commercial subscription plan that will help the company make some money.

Docker recently took a massive $95 million funding round at a $1 billion valuation, so it's important news for the company and its investors.

The news comes out of DockerCon, the startup's annual conference, where some 2,500 developers and devotees gathered in San Francisco to hear the latest about its trendy technology.

Basically, Docker's technology allows developers to write all of the code that goes into an application, package it up, and have it run anywhere else.

It sounds simple, but it's powerful: It means that the same code a developer writes on their laptop will run in the exact same way in a gigantic cluster of supercomputers, like the kind Amazon Web Services rents for pennies an hour. Developers love it because it speeds up the process of getting code into what they call "production," which means that it's somewhere people can use it.

The new subscription plan starts at $150/month and can be billed annually. It's aimed at getting enterprises who are a little hesitant about this whole "containers" thing up to speed quickly and easily, with all the software and support they need to get started.

Plus, if you don't want to buy it from Docker itself, big vendors like Amazon Web Services, IBM BlueMix, and Microsoft Azure are going to be reselling these subscriptions from their public cloud platforms- a major vote of confidence from some major industry players.

The trick to selling free software

The core Docker container technology is actually open source, which means that anybody anywhere can download the source code for free and use it however they want. Docker, the company, oversees its development, but people all over the world can and do contribute improvements to the technology all of the time.

Selling free software is a tricky business model, as you may imagine.

"Now, Docker, a cute little open source startup - how is that gonna make money," jokes Docker SVP of Product Scott Johnston.

Docker takes its name and inspiration from container ships, which haul cargo in standard-sized boxes.

Free software, generally speaking, doesn't come with access to a tech support hotline, which turns off a lot of big companies. But many vendors, including Red Hat, Canonical, and Oracle, have learned that there's good money to be had by providing support for that free software that helps them get it up and running for their specific business needs.

And now, Docker follows in their footsteps, making the open source project more available for everyone with all the tools and all the tech support customers have been asking for.

"Open source is actually a powerful strategy and not something to be afraid of," Johnston says.

Previously, Docker had paid monthly subscription plans that allowed for the creation of "private repos," a place for developers to stash their Docker container image templates away from prying eyes. But Johnston says that these packages are limited, compared to the business-oriented plans Docker is offering today, and that this new plan is the company "[getting its] act together."

The Docker commercial plan includes all of the software necessary to get started with the technology, including the Docker Engine and Docker Private Registry, two of the moving pieces necessary to create and maintain Docker images that can then be placed anywhere you need an application to be, including behind a company's firewall (and away from the public Internet).

One big opportunity for Docker here, Johnston says, is that companies can use these commercial subscriptions to get started with moving their whole infrastructure from their own data centers and into the public cloud from vendors like Amazon Web Services or Microsoft Azure. Once the applications are all contained, it becomes easy to move.

"Docker's a great format for that," Johnston says.

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