> Redis Labs CEO Ofer Bengal told me the company’s isn’t cash positive yet. He also noted that the company didn’t need to raise this round but that he decided to do so in order to accelerate growth. “In this competitive environment, you have to spend a lot and push hard on product development,” he said.
I'm always amazed how startups like this where R&D practically cost nothing are not profitable yet after years in the market and thousands of customers. C'mon guys 99% of the work is already done by antirez and the open source community.
Basically what happens is that even if you start to be cash positive, you want to get a bigger company, so you need to scale a lot the sales team and the customer support team, so you spend more money in order to end with more customers, not caring about the short term profitability. This is common to most startups basically.
Btw the Redis Labs development team at this point is quite large, because Redis open source is the core, but the company produces a number of things in order to provide a good managed Redis experience, all the additional features and modules, and so forth. But even so, I think it is accurate to say that most money in most companies of this kind will go to orchestrate the company at a different level, not just R&D.
These companies are intentionally walking a careful line of spending a ton of money to create a market-leading product and to capture as much of the market as possible early on. They could easily be cash-flow positive and take on less investment, but it's also very possible that competing products or service providers will overtake them or become dominant in the market they are trying to establish for themselves.
So you don't want to miss out on the opportunity to be the big fish in your pond (you may be unable to keep making money in the long term if you aren't the market leader), but you don't want to grow your costs so fast that you can never catch up.
That's the balancing act being played. And your early-stage investors who have lots of control will push hard to play it aggressively in later stages, because they want to make huge returns. And when there are people out there willing to give you tens of millions of dollars and by extension several years more guaranteed life of your company without you having to do the hard work to hammer out actual profit anytime soon, it's going to be hard if not impossible to turn down.
> 99% of the work is done by antirez and the open source community
Redis Labs employs antirez and therefore sponsor the open source work on redis. At least a part of this VC money is going towards making a great open source redis. As a user, that makes me happy.
> C'mon guys 99% of the work is already done by antirez and the open source community.
That's the problem. Enterprising open-source stuff is really hard. Either you're selling support for already-open-source stuff, or you're selling an enterprise variant with extra goodies and throwing a support plan on top of that.
Companies suffer from Mrs. Armitage's Bike, where they're not happy with what they've got and need more. I wish more companies could just do one thing well and scale to whatever size it is that does that.
“When we came out with this new license, there were many different views,” he acknowledged. “Some people condemned that. But after the initial noise calmed down — and especially after some other companies came out with a similar concept — the community now understands that the original concept of open source has to be fixed because it isn’t suitable anymore to the modern era where cloud companies use their monopoly power to adopt any successful open source project without contributing anything to it.”
Okay, so here's the thing, at FOSDEM this year there were multiple events around this issue, and I haven't seen a single person defend the stance of Redis and others. Also the original concept of open source is doing fine, thanks. The problem is a couple of overvalued, VC-backed companies that found out they don't have a business model that is compatible with the promises they made to their investor.
IMHO it's important to take the quoted words into the context. And the context is:
1. Redis Labs anyway pays me full time and Fabio Nicotra (prat time) to just do BSD code. So they are not taking away anything from the OSS part.
2. Internal devs at Redis Labs submit pull requests to the Redis core BSD code base.
So this whole discussion is centered around modules, that is, their POV is that in the cloud era you have to do also things under different licenses. Now it's perfectly licit to disagree with that, however it's important to realize that Redis Labs is not taking away anything from the OSS effort around Redis, it's actually paying for such BSD code. Yet Redis Labs for some reason is getting a lot of criticisms despite other systems went completely non-open-source, core + accessory things. Something does not add up IMHO.
> The problem is a couple of overvalued, VC-backed companies
No, the problem is exactly what the source mentioned. When FOSS became a thing, cloud computing wasn't even an infant thought and the licenses that spawned during the era addressed only known factors.
> I haven't seen a single person defend the stance of Redis and others
How many of them are in this situation? Not really interested in the opinions of people that don't have skin in the game, and I'd wager these people don't have product's being exploited by cloud provider.
We have large businesses exploiting open source software (thanks to dated licenses) to make profit off the back of open source communities, while contributing little-to-nothing in return.
Fuck that. I didn't adopt Redis Postgres, or MySQL so that Amazon and Google could build off decades of good will to make money from them. They've all made significant improvements to these services, but refuse to add that value back into the community despite the fact that the opportunity only existed because other's worked for free.
So it's ok for cloud providers to profit from FOSS projects, but not ok for the original authors? Shameful, this attitude is absolutely disgraceful.
Please stop using open source if you don't also advocate for FOSS authors to reserve the right to try and profit from their work in a way that's compatible with the greater FOSS community.
> According to the Open Source Initiative (OSI), open source licensing cannot limit the scope of a license – it only applies conditions to exercising it. With this model, no one can stop you from doing whatever you want with the software, whether commercial or non-commercial, or (famously) good or evil. Therefore, the no-sale restriction imposed by Commons Clause means that any software under this new license is non-open source by definition. However, in practice, Commons Clause only adds a limitation concerning fair use, and we believe that both licensing approaches share the same core value of making software available for use by anyone.
That's a long way of saying the new license is not OSI-compliant. The new license is BSD with a common clause which according to the president of OSI, this clause instantly renders it non-approved.
I love Redis, but I'm a bit skeptical of some of the changes that are currently in development. The respv3 protocol has some features that, while they sound neat, also could significantly complicate client library code. There's also a lot of work going into a granular acl. I can't imagine why this would be necessary, or a higher priority than other changes like multi-thread support, better persistence model, data-types, etc.
Thanks coleifer, I understand that the current development path may look odd, but it's definitely not the first time: the critiques for Lua scripting or Pub/Sub where much stronger AFAIK :-) However I want to really share what is the process behind and why certain features like ACLs are so important (for reasons very different than the ones you may guess I think, that is, no enterprise customers in need for security), and why RESP3 has out-of-band data channels support (even if they are not implemented by the server). I'll write a blog post today, and reply here with the address. Cheers!
The good thing is that you have a direct line of communication with the developer himself, @antirez on this portal or GitHub. From what I know, @antirez calls the shots on what gets implemented in Redis core...NOT Redis Labs. After reading several technical/non-technical posts at http://antirez.com, I can confidently say that his decisions are always sound and justifiable! We love you @antirez!
It is so hard to do this because of VC money. Once you have taken the VC money success is not an option anymore. You must be super successful and ideally wipe out all competitors!
If I'd start my own startup and don't take VC money and the company makes $300k-$500k profit per year, I'd be ecstatic and happy to stay at that level forever. Maybe I'd focus more on reducing my own time spent at some point, rather than growing more.
For a VC that's the same as failing. They invest in a wide range of companies and they need to get some major cash out from the successful companies. There also needs to be an exit. That means IPO or sell the thing. The exit is needed because the fund has a set lifetime. After that the shares go to the fund investors. For years you had A16Z representing, now you got a bunch folks you never heard of. Neither you nor those people want to deal with any of that.
If you have an IPO the treadmill continues, because our economy is about exponential growth and not sustainable, steady income. That pattern is even reinforced by our tax code. Capital gains < income tax. I can defer capital gains by not selling. Don't give my dividends! Those get taxed immediately!
What is the longterm path for things like Redis Labs, Mongo, and Elastic, etc? They all seem to have an open source database which they in turn monetize by offering as a DBaaS. But can they really bet against AWS in the long run?
Elastic's own cloud ElasticSearch is better than AWS's notoriously bad implementation, but what if it wasn't? Elastic's cloud offering runs on AWS and other third party offerings, so all it would take would be AWS reaching relative parity in quality, and they would then surely have the upper-hand by being the cloud infrastructure their own offering is run off of. I feel like the same is true with AWS Elasticache vs Redis Labs. What if AWS reaches parity, but can additionally offer the ease of not managing 2 accounts, as well as the ease of co-locating the cache with the app server and putting it all in a VPC. What is the endgame for these DBaaS when they have AWS copying their work?
Well from the POV of the open source Redis, also before this round, but even more now, Redis Labs is going to continue to sponsor me, Fabio Nicotra, and other folks around the OSS part doing community/patches/...
I think that part of the round will also serve to put more efforts in the Redis extensions provided as modules. Incidentally I need to extend the modules system a lot more, especially with "hooks" so that modules can capture any command execution, because yesterday I wanted to implement the Gopher protocol as a module and I could not do that easily without spawning a thread to listen to some other socket, and remained hardly disappointed.
There's almost certainly a non-trivial sales team spend here. Redis Enterprise isn't a decision that organizations take lightly, and databases aren't cheap. Mongo is public on a similar model, so there's almost certainly enough room to grow with their current offerings (licenses and hosting).
Based on 238 employees, they're probably at $25m+ in revenue. Many companies start to think about a "second act" at this point, but few of them actually pull it off. So we'll probably continue to see improvement around the core product and a slew of new integrations, but I'd be surprised if they came up with a totally standalone new product that's worth $X0,000,000 / year in short order. There's too much to do with Redis itself and the hosting platform to devote so much effort to a brand new effort.
From the article: "the company plans to use the new funding to accelerate its go-to-market strategy and continue to invest in the Redis community and product development."
Redis Cloud is the very definition of a great cloud service. Cheap, easy, reliable, scalable up and down with no downtime. Can be placed in your same AWS region.
This looks like direct competition to Kafka. The technology behind Kafka Streams is solid and can probably give Kafka a run for their money (in fact Redis has more adoption than Kafka). However their product is not in the same quality range.
The things I like more as an "external" person given that I handle the OSS part and I'm not directly involved in the internal products development, if not as a technical advisor, are:
1. Transparent clustering. You talk to that thing like if it was a single instance and it scales to the cluster. Failover and so forth happen automatically. It'a a lot higher level than Redis Cluster (which also they support as a protocol), there are good and bad things in the different designs, but I like how well it works.
2. CRDTs store for multi master, also across far geographical area.
3. Redis on flash, using different persistent memory types. This feature originated from an early experiment I did years ago, called "diskstore", then Redis Labs worked at it many years and reached a quite cool thing.
4. All the above can be installed in your servers if you want very high memory setups that is impossible to pay for on the cloud.
5. The various modules like RedisGraph, RedisSearch and so forth are only available in the Redis Labs cloud (or you can install manually on your server). Some of those modules like RedisGraph is receiving years of development.
6. I know that the support team and everybody at Redis Labs really knows Redis. Which was one of the main reasons eventually I joined the company. So I think they are able to handle core-level issues for every user having troubles. A lot of Redis operational improvements came from Redis Labs core/support team after investigating issues with customers.
AFAIK those are the stuff I like more from the external but honestly they do a number of things I don't know very well for certain big customers.
Amazon actually doesn't run the same Redis as the rest of us, I wouldn't be surprised if they re-wrote a lot of parts of it. They probably re-wrote the storage engine ect ...
Would it still be fair to say that Redis typically is used for things like caching, messaging etc (and it's amazing for that), but not as a primary data store? Or did I miss something?
Price transparency is not optional for SAAS products. Seems to be a well kept secret on their website. Instant turn off for me. It means there are hidden costs, special deals at the discretion of some sales person, and other sales BS you have to deal with. I see this as an anti pattern for a SAAS service. We pay for lots of SAAS stuff at the company I run; we don't talk to sales people for any of that stuff ever. We engage with their support when stuff is broken. But not sales.
Redis is a great product but I fail to see the valuation that comes with a 60M investment (a billion+?). Yes, the cloud offered variety could potentially be interesting but competing products are available and this seems to be a commodity product running on commodity hardware. AWS already offers it so do others, I believe.
[+] [-] symisc_devel|7 years ago|reply
I'm always amazed how startups like this where R&D practically cost nothing are not profitable yet after years in the market and thousands of customers. C'mon guys 99% of the work is already done by antirez and the open source community.
[+] [-] antirez|7 years ago|reply
Btw the Redis Labs development team at this point is quite large, because Redis open source is the core, but the company produces a number of things in order to provide a good managed Redis experience, all the additional features and modules, and so forth. But even so, I think it is accurate to say that most money in most companies of this kind will go to orchestrate the company at a different level, not just R&D.
[+] [-] skywhopper|7 years ago|reply
So you don't want to miss out on the opportunity to be the big fish in your pond (you may be unable to keep making money in the long term if you aren't the market leader), but you don't want to grow your costs so fast that you can never catch up.
That's the balancing act being played. And your early-stage investors who have lots of control will push hard to play it aggressively in later stages, because they want to make huge returns. And when there are people out there willing to give you tens of millions of dollars and by extension several years more guaranteed life of your company without you having to do the hard work to hammer out actual profit anytime soon, it's going to be hard if not impossible to turn down.
[+] [-] zachsnow|7 years ago|reply
It’s never just the product, no matter how much we builder types might like.
(No idea whether 60M is the right number for the rest though.)
[+] [-] nindalf|7 years ago|reply
Redis Labs employs antirez and therefore sponsor the open source work on redis. At least a part of this VC money is going towards making a great open source redis. As a user, that makes me happy.
https://redislabs.com/team_post_type/salvatore-sanfilippo-le...
[+] [-] nunez|7 years ago|reply
That's the problem. Enterprising open-source stuff is really hard. Either you're selling support for already-open-source stuff, or you're selling an enterprise variant with extra goodies and throwing a support plan on top of that.
[+] [-] mbesto|7 years ago|reply
S&M is a helluva drug. Notice something common about the "Other SG&A" in all of these?
https://www.marketwatch.com/investing/stock/mdb/financials
https://www.marketwatch.com/investing/stock/cldr/financials
https://www.marketwatch.com/investing/stock/rht/financials
At the end of the day, DCF is really what matters and DCF != profit
[+] [-] Waterluvian|7 years ago|reply
[+] [-] Scarbutt|7 years ago|reply
Yes, but maybe he's not a business man or is not in his interest to pursue the road of something like redis labs.
[+] [-] hannob|7 years ago|reply
“When we came out with this new license, there were many different views,” he acknowledged. “Some people condemned that. But after the initial noise calmed down — and especially after some other companies came out with a similar concept — the community now understands that the original concept of open source has to be fixed because it isn’t suitable anymore to the modern era where cloud companies use their monopoly power to adopt any successful open source project without contributing anything to it.”
Okay, so here's the thing, at FOSDEM this year there were multiple events around this issue, and I haven't seen a single person defend the stance of Redis and others. Also the original concept of open source is doing fine, thanks. The problem is a couple of overvalued, VC-backed companies that found out they don't have a business model that is compatible with the promises they made to their investor.
[+] [-] antirez|7 years ago|reply
1. Redis Labs anyway pays me full time and Fabio Nicotra (prat time) to just do BSD code. So they are not taking away anything from the OSS part.
2. Internal devs at Redis Labs submit pull requests to the Redis core BSD code base.
So this whole discussion is centered around modules, that is, their POV is that in the cloud era you have to do also things under different licenses. Now it's perfectly licit to disagree with that, however it's important to realize that Redis Labs is not taking away anything from the OSS effort around Redis, it's actually paying for such BSD code. Yet Redis Labs for some reason is getting a lot of criticisms despite other systems went completely non-open-source, core + accessory things. Something does not add up IMHO.
[+] [-] avip|7 years ago|reply
[+] [-] tomnipotent|7 years ago|reply
No, the problem is exactly what the source mentioned. When FOSS became a thing, cloud computing wasn't even an infant thought and the licenses that spawned during the era addressed only known factors.
> I haven't seen a single person defend the stance of Redis and others
How many of them are in this situation? Not really interested in the opinions of people that don't have skin in the game, and I'd wager these people don't have product's being exploited by cloud provider.
We have large businesses exploiting open source software (thanks to dated licenses) to make profit off the back of open source communities, while contributing little-to-nothing in return.
Fuck that. I didn't adopt Redis Postgres, or MySQL so that Amazon and Google could build off decades of good will to make money from them. They've all made significant improvements to these services, but refuse to add that value back into the community despite the fact that the opportunity only existed because other's worked for free.
So it's ok for cloud providers to profit from FOSS projects, but not ok for the original authors? Shameful, this attitude is absolutely disgraceful.
Please stop using open source if you don't also advocate for FOSS authors to reserve the right to try and profit from their work in a way that's compatible with the greater FOSS community.
[+] [-] miguelmota|7 years ago|reply
> Is Commons Clause open source?
> According to the Open Source Initiative (OSI), open source licensing cannot limit the scope of a license – it only applies conditions to exercising it. With this model, no one can stop you from doing whatever you want with the software, whether commercial or non-commercial, or (famously) good or evil. Therefore, the no-sale restriction imposed by Commons Clause means that any software under this new license is non-open source by definition. However, in practice, Commons Clause only adds a limitation concerning fair use, and we believe that both licensing approaches share the same core value of making software available for use by anyone.
That's a long way of saying the new license is not OSI-compliant. The new license is BSD with a common clause which according to the president of OSI, this clause instantly renders it non-approved.
https://www.zdnet.com/article/open-source-licensing-war-comm...
[+] [-] coleifer|7 years ago|reply
[+] [-] antirez|7 years ago|reply
P.S. I'll also address threading and persistence.
[+] [-] pupdogg|7 years ago|reply
[+] [-] antirez|7 years ago|reply
[+] [-] rsweeney21|7 years ago|reply
[+] [-] btian|7 years ago|reply
Tesla raised Series F in 2009, and it's still alive.
[+] [-] lquist|7 years ago|reply
[+] [-] dpflan|7 years ago|reply
Is there a break down somewhere of what each series should signify?
[+] [-] mychael|7 years ago|reply
Why is it so hard to just supply an honest service in exchange for money and take a nice profit?
[+] [-] ajmurmann|7 years ago|reply
If I'd start my own startup and don't take VC money and the company makes $300k-$500k profit per year, I'd be ecstatic and happy to stay at that level forever. Maybe I'd focus more on reducing my own time spent at some point, rather than growing more. For a VC that's the same as failing. They invest in a wide range of companies and they need to get some major cash out from the successful companies. There also needs to be an exit. That means IPO or sell the thing. The exit is needed because the fund has a set lifetime. After that the shares go to the fund investors. For years you had A16Z representing, now you got a bunch folks you never heard of. Neither you nor those people want to deal with any of that.
If you have an IPO the treadmill continues, because our economy is about exponential growth and not sustainable, steady income. That pattern is even reinforced by our tax code. Capital gains < income tax. I can defer capital gains by not selling. Don't give my dividends! Those get taxed immediately!
[+] [-] mavdi|7 years ago|reply
[+] [-] ris|7 years ago|reply
[+] [-] ralusek|7 years ago|reply
Elastic's own cloud ElasticSearch is better than AWS's notoriously bad implementation, but what if it wasn't? Elastic's cloud offering runs on AWS and other third party offerings, so all it would take would be AWS reaching relative parity in quality, and they would then surely have the upper-hand by being the cloud infrastructure their own offering is run off of. I feel like the same is true with AWS Elasticache vs Redis Labs. What if AWS reaches parity, but can additionally offer the ease of not managing 2 accounts, as well as the ease of co-locating the cache with the app server and putting it all in a VPC. What is the endgame for these DBaaS when they have AWS copying their work?
[+] [-] davman|7 years ago|reply
[+] [-] mushufasa|7 years ago|reply
[+] [-] antirez|7 years ago|reply
[+] [-] jdp23|7 years ago|reply
[+] [-] redm|7 years ago|reply
[+] [-] antirez|7 years ago|reply
I think that part of the round will also serve to put more efforts in the Redis extensions provided as modules. Incidentally I need to extend the modules system a lot more, especially with "hooks" so that modules can capture any command execution, because yesterday I wanted to implement the Gopher protocol as a module and I could not do that easily without spawning a thread to listen to some other socket, and remained hardly disappointed.
[+] [-] trjordan|7 years ago|reply
There's almost certainly a non-trivial sales team spend here. Redis Enterprise isn't a decision that organizations take lightly, and databases aren't cheap. Mongo is public on a similar model, so there's almost certainly enough room to grow with their current offerings (licenses and hosting).
Based on 238 employees, they're probably at $25m+ in revenue. Many companies start to think about a "second act" at this point, but few of them actually pull it off. So we'll probably continue to see improvement around the core product and a slew of new integrations, but I'd be surprised if they came up with a totally standalone new product that's worth $X0,000,000 / year in short order. There's too much to do with Redis itself and the hosting platform to devote so much effort to a brand new effort.
[+] [-] virtuexru|7 years ago|reply
[+] [-] etaioinshrdlu|7 years ago|reply
[+] [-] ww520|7 years ago|reply
[+] [-] sandGorgon|7 years ago|reply
Hopefully this should fix it.
[+] [-] tbrock|7 years ago|reply
[+] [-] misiti3780|7 years ago|reply
[+] [-] antirez|7 years ago|reply
1. Transparent clustering. You talk to that thing like if it was a single instance and it scales to the cluster. Failover and so forth happen automatically. It'a a lot higher level than Redis Cluster (which also they support as a protocol), there are good and bad things in the different designs, but I like how well it works.
2. CRDTs store for multi master, also across far geographical area.
3. Redis on flash, using different persistent memory types. This feature originated from an early experiment I did years ago, called "diskstore", then Redis Labs worked at it many years and reached a quite cool thing.
4. All the above can be installed in your servers if you want very high memory setups that is impossible to pay for on the cloud.
5. The various modules like RedisGraph, RedisSearch and so forth are only available in the Redis Labs cloud (or you can install manually on your server). Some of those modules like RedisGraph is receiving years of development.
6. I know that the support team and everybody at Redis Labs really knows Redis. Which was one of the main reasons eventually I joined the company. So I think they are able to handle core-level issues for every user having troubles. A lot of Redis operational improvements came from Redis Labs core/support team after investigating issues with customers.
AFAIK those are the stuff I like more from the external but honestly they do a number of things I don't know very well for certain big customers.
[+] [-] foodandsport|7 years ago|reply
AWS does not compete on price or performance and the Redis servers are hosted directly in whatever cloud facility you'd like.
On final note. Since setting it up, I've never had to look at it again.
[+] [-] kabacha|7 years ago|reply
[+] [-] misiti3780|7 years ago|reply
[+] [-] Thaxll|7 years ago|reply
[+] [-] Max_Horstmann|7 years ago|reply
[+] [-] the_common_man|7 years ago|reply
[+] [-] jillesvangurp|7 years ago|reply
Redis is a great product but I fail to see the valuation that comes with a 60M investment (a billion+?). Yes, the cloud offered variety could potentially be interesting but competing products are available and this seems to be a commodity product running on commodity hardware. AWS already offers it so do others, I believe.
[+] [-] 5trokerac3|7 years ago|reply
[deleted]
[+] [-] oarabbus_|7 years ago|reply