Docker attracts another $95 million in venture funding

After Docker's fourth round of funding it's time to ask: When will the container maven be able to cut the investor purse strings?

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Docker just completed its fourth round of venture capital, raising another $95 million in Series D money from new and prior investors. Such success provokes the question: At what point does Docker wean itself from venture funding -- over $160 million in total so far -- and stand on its own two feet as a company with a profitable, self-sustaining business model?

Docker CEO Ben Golub says the software-containerization company needs to be able to sustain itself with a solid customer base. "What was important for us in the early days was to establish a great ecosystem and a great product with great early adoption," Golub said in a phone interview. "And while that continues to be a focus, now we want to make sure that large numbers of customers are having great success with Docker. If we do that, then I think we earn our way into large revenue growth and the ability to be self-sustaining."

Docker's revenue-generating plans echo those of other open source success stories. The first involves offering hosted versions of its services, which Golub says have already been generating revenue for approximately nine months and have attracted "thousands of organizations" as paying customers. Another tack is to offer commercial support and on-premise software solutions in the upcoming Docker Hub Enterprise product, set to be rolled out sometime in the second quarter. Golub said "large numbers of customers in beta right now are giving us great feedback on the solutions." About 100 companies have signed up to be part of the beta program for Docker Hub Enterprise.

From a business standpoint, Golub says the Docker model should provide good margins, since the product all but sells itself. "We don't need a large sales force to go out and drive primary adoption or drive education. Instead, what we're seeing is developers adopting Docker in large numbers. They bring it into the organization, it grows organically to a certain point, and then the organizations tend to reach out to us to get some help moving to the next level."

Golub also pointed to the company's track record with raising venture capital as a positive sign -- namely, that the company was able to raise a series C even before exhausting its series A, and entered its D round with series B money still remaining.

Docker's success with developers -- after a little over a year in business -- has been downright viral, and the technology will soon expand its reach to the Windows world as well. But Docker has seen frustration as well as innovation, and still has a ways to go before it displaces existing deployments of VMs.

Whatever the timetable for Docker's maturing into a standalone company, Golub believes it's important "to make sure we are prepared for the growth, which seems always surprising in terms of its magnitude."

Copyright © 2015 IDG Communications, Inc.