As containers mature, new startups fill out the ecosystem

Now that containers are a common IT ingredient, they bring new problems—and the latest wave of investment in container companies focus on their solutions

As containers mature, new startups fill out the ecosystem
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First, the venture funding came for Docker—seven rounds at last count, with the last in 2015. Now more of that money is arriving to support the world containers have built.

Today, container security outfit Twistlock announced it has secured $17 million in Series B funding, much of it from Polaris Partners, investors in code-analysis service Veracode. That's $1 million less than Docker's last D round, and Twistlock's first round of fundraising netted $10 million last July, which is nearly as much as Docker's own Series A in 2011.

This isn't an aberration, as the container ecosystem has sprouted many startups already onto their second, third, and fourth rounds of funding. Most of them focus on supporting areas like security (as in Twistlock's case), storage, data services, and monitoring.

Consider some other examples. Portworx raised $20 million in its Series B earlier this month. The company addresses a common container issue: Deploying stateful data with a containerized app so that it works with the scheduling mechanisms used to run containers, and in either on-prem or cloud-native environments.

Datadog, which provides systems monitoring for container-based environments, did its D round back in January 2016, but to the tune of a whopping $94.5 million. Datadog's bigger numbers may be due to it being a general IT monitoring outfit, but it has put containers front and center in its product lineup. It stands out by offering a monitoring solution that's highly granular, has alerting functionality built in, and is easy to deploy.

Diamanti ($18M in series B in Feburary), created by ex-Cisco folks, is also aimed at "[solving] network and storage challenges in Linux containerized environments." the company provides a PCIe appliance, an add-on for existing servers, that provisions storage and networking I/O on demand to containers. It's reminiscent of the approach HP Enterprise used for its Synergy servers, where the underlying hardware is managed by APIs to compose infrastructure to suit a given scenario.

Hedvig ($21.5M, series C, in March) provides software-defined storage pools by ganging together multiple kinds of storage into a single system that provides file, block, and object interfaces. It originally focused on "classic" virtualized environments like VMs, but containers are now part of the picture too, and its storage proxy service can be deployed as a VM or a container.

Also worth mentioning here is Heptio, founded by ex-Googlers Joe Beda and Craig McLuckie "to support and advance the open Kubernetes ecosystem." It's on Series A ($8.5M, from last November), but any startup focused on the explosively popular container orchestration system is worth keeping an eye on.

Widen the time frame to include last year, and many other container-focused companies enter the picture: container-based Linux distro creators Rancher Labs ($20M series B, May 2016) and CoreOS ($30M series B, May 2016); container networking and application-fabric mavens Weaveworks ($15M series B, May 2016); the list goes on.

But the chief focus, again, is on solving problems that remain persistent issues with containers. These are issues that don't lend themselves to solutions native to any given container platform; they're larger, more systematic difficulties that demand more systematic responses. 

It will be interesting to see how much territory any one startup can stake out once it hits profitability. Enterprise-targeted startups are far likelier to reach a sustainable level than more mainstream flash-in-the-pans, but it's still unclear how much room there will be for multiple competing solutions to the same problems, even in the vibrant and rapidly expanding world of containers.

[An earlier version of this piece mis-stated the timeframe for Datadog's series D round. It was originally listed as January 2017.]

Copyright © 2017 IDG Communications, Inc.

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