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a16z Podcast | An Open Source Business Model That Works
9 segments available
Open source software has permeated practically every nook of the software world. The biggest companies and largest-scale systems all lean heavily on open source code. Yet, with the exception of Red Hat, no one has built a great business on top of open source software. That’s because what companies should be selling isn’t necessarily the software, or even support, says a16z’s Peter Levine, but a service that leverages open source. One example of such a service is DigitalOcean, which has built a cloud environment tailored to the needs of developers. DigitalOcean CEO and cofcounder Ben Uretsky joins Levine from his New York City HQ for a discussion about open source-as-a-service, how companies of all sizes should think about leveraging open source, and whether we’ll start to see a slew of specialized clouds geared toward different verticals.
Segments Timeline
Open Source Economics: A New Model
Peter Levine introduces the concept of open source economics, contrasting traditional models like Red Hat's with the emerging open source-as-a-service model exemplified by DigitalOcean. He discusses how leveraging open source can drive economic value and the importance of providing services rather than just software.
"hello this Peter from andreessen horowitz and I'm it's my honor to be joined with by a Ben who's the CEO of digitalocean Ben how you doing you're doing really well thanks Peter for having me on good y..."
Building on Open Source Foundations
Ben Uretsky explains how DigitalOcean utilizes KVM virtualization technology, an open source project, to create a robust cloud infrastructure. He emphasizes the added value of their service beyond just the virtualization engine, highlighting the trend of open source projects becoming more relevant and the growth of database-as-a-service offerings.
"sort of curious I mean you guys are you've built a company on this so I'm curious on your thoughts and how you guys think about that yeah definitely so we we built our cloud on top of kvms virtualizat..."
The Challenge of Open Source Adoption
Uretsky discusses the difficulties individual users face when trying to leverage open source projects, including the steep learning curve and lack of best practices. He argues that open source-as-a-service providers can simplify this process by offering prepackaged solutions tailored to user needs.
"year so database-as-a-service essentially has has grown significantly over the last decade with a whole bunch of no sequel projects that are they're just you know getting their their start and what's ..."
Outsourcing Open Source Management
The conversation shifts to the benefits of outsourcing open source projects to specialized providers. Uretsky shares insights from a customer who prefers to avoid the operational challenges of managing open source technology in-house, highlighting the fixed costs and reduced responsibility that come with using a service.
"it's interesting and and you know maybe to contrast what like it it may not seem obvious to folks that ma it's not even completely obvious to me that open source is out there I can readily pick up ope..."
The Evolution of Data Centers
Levine and Uretsky explore the concept of data centers as a service, discussing how various components of the traditional on-prem ecosystem are now available in the cloud. They analyze the catalysts behind this shift, including advancements in virtualization and the need for efficient resource management.
"build it in-house and with this specific customer they've already built a lot of this as a as a first pass on premise you know taking that open source and deploying it to their own infrastructure and ..."
Developer-Centric Cloud Solutions
Uretsky explains DigitalOcean's focus on developers, contrasting it with generic public clouds. He emphasizes the importance of user experience and simplicity in managing cloud infrastructure, arguing that developers benefit from a tailored approach that prioritizes their specific needs.
"being offered as a service I've also spoken about and written about this whole notion of data center as a service where you know you just spoke about these data bases being offered as a service and if..."
The Future of Cloud Infrastructure
The discussion turns to the potential for vertical-specific clouds beyond developers. Uretsky suggests that there is room for innovation in the cloud space, with opportunities for providers to cater to niche markets while emphasizing the need for a deep understanding of user requirements.
"become much better at managing all of these systems of their deployment and what happened is the open source community caught up to this need and they built a whole bunch of tools that allow that prov..."
Innovating in Cloud Services
Uretsky reflects on the challenges of standing out in a crowded cloud market. He discusses the importance of focusing on user needs rather than just technology, suggesting that companies can find success by innovating and creating tailored solutions for specific user segments.
"know that's what you're saying is real catalyst that's yeah yeah it's also interesting it's also interesting to know that in this particular case both extremes are serviced really well by this model i..."
Rapid-Fire Tech Comparisons
In a rapid-fire segment, Levine and Uretsky compare various technologies, including Linux containers versus virtualization, flash storage versus spinning disks, and Intel versus ARM processors. They discuss the implications of these technologies for the future of cloud computing and infrastructure.
"these companies so is there a third large bucket that a infrastructure provider could focus on I'd like to thing that there's always an opportunity to innovate to figure out the next step you know whe..."