[mad_vill]

I feel like the next generation of this type of company is smaller consultancies that have awesome developers that build customer tooling on the side. But the main revenue driver is consultancy.

Also it really feels like all the air has been let out of the docker/kubernetes/cloud-native balloon that was so popular in the late 2010s.

[gangstead]

> smaller consultancies that have awesome developers that build customer tooling on the side

I've worked at a couple consultancies and they were always chasing after that recurring product revenue. I grew to believe that it isn't possible under that business model.

When you are running a consultancy you are in the business of marking up developer hours: find a client to sign a contract for $150 / hour and hire a consultant who will do the job for $100k/year salary. Then convince them to work as many hours as possible for their fixed salary, plus the carrot of a bonus payout every once in a while if everyone bills lots of hours.

Having that developer spend any time working on the company's product causes all sort of problems. The most immediate is the loss of revenue. But also now this employee might see working on the product as cutting into their bonus since they are billing less hours. Everyone wants some of the upside if the side product generates revenue but how do you split it between people who worked directly on the product and people who worked on paying client jobs to generate the revenue so the others could work on the product? It ends up causing a rift.

The other thing I've seen while working at small and even medium sized consultancies is that they end up dependent on one large customer who calls all the shots and takes up all the available time, or all "extra" time not being billed is used working on sales for the next contract. Either way there doesn't end up being much capacity to work on cool tooling.

[mooreds]

> I've worked at a couple consultancies and they were always chasing after that recurring product revenue. I grew to believe that it isn't possible under that business model.

The only time I've seen this work (and I have seen it work multiple times) is with managed hosting.

So if you are an expert at developing web applications or solutions using <product X> you can offer a managed hosting solution to your clients where you host the web app or the <product X> solution. Not all of them will take you up on it, but some will. Those that do will pay you a monthly fee. This isn't free (you now have to carry a pager) but is recurring.

Building your own SaaS/other unrelated product? That's a rock I've seen several consulting ships crash into (to pick a metaphor). Here's one that some of my friends tried to build in the late 2000s that I wrote about: https://www.mooreds.com/wordpress/archives/506

[danjrslp]

I agree. Being good at running a consulting company does not translate to being good at running a product/SaaS/devtools company.

[catherinecodes]

Right. I wonder what their cost structure was like. $10 million in revenue is enough to support a decent-sized team.

[0xbadcafebee]

"Air has been let out" in the sense that it's moved past the trough of disillusionment and is on its way to the plateau of productivity[1].

There are still a few people in the trough of disillusionment yelling about how a $5/month VPS is all you'll ever need, or a $50/month bare metal colocated server is all you'll ever need. But for the most part the people who benefit from cloud services & containerization will use it when they need to, avoid it when they don't. It'll continue to be a productive tool when used properly, with vendors supporting mature products using it that solve people's problems.

[1] https://en.wikipedia.org/wiki/Gartner_hype_cycle

[quickthrower2]

Must have miss the drama / holy war memos. Happily use a mix of k8s and non k8s at work and use that $5 VM for home side hussle.

[nprateem]

Like with big data I think most orgs (>80%) just don't need it due to the extra complexity. They might as well just use something managed like fargate and go back to building their own products.

[marcinzm]

> Also it really feels like all the air has been let out of the docker/kubernetes/cloud-native balloon that was so popular in the late 2010s.

Not really, the space has simply grown faster than these companies could keep up with and were left behind.

I can code up a CICD pipeline that does per-PR namespace isolated deploys of an app stack on EKS using Github actions in well under a week. With docker compose for local testing. That wasn't the case 5 years ago but it is now. Why would I want to be locked into Weave Works?

[benjaminwootton]

GitHub actions must have eaten most of the DevOps tooling market. It’s pretty good and it’s fine for the vast majority of pipelines.

[xenophonf]

> a CICD pipeline that does per-PR namespace isolated deploys of an app stack on EKS using Github actions... [with] docker compose for local testing

Please teach me, oh wise prince!

[upupupandaway]

How does your pipeline work with an app that requires many other services to work?

[swozey]

Hell, we do it once in terraform/pulumi/cdk and then it takes 10 minutes to tweak some variables and switch aws accounts and bam

Our devs/SRE put up apps and clusters in minutes (aside from the terrible alb/ecs/eks/etc deployment times).

[FourierEnvy]

Yeah I literally did this last week for a new in house AI assistant for my company. Just swap out Jenkins for GH actions (sadly). So... can confirm.

[mad_vill]

they did more than just CICD but I see your point.

[swozey]

> Also it really feels like all the air has been let out of the docker/kubernetes/cloud-native balloon that was so popular in the late 2010s.

Kubernetes is just boring now. It's stable, the people who need to know it probably know it. I started working and contributing to k8s in 2015 back in version 1.1. 7 years of the same technology. I haven't even used it in 2-3 years (1.18) and I know I can hop over to it and do exactly what I used to do with some CRD flare.

All of the contributors should be proud of what they've built, that's the goal in the end, stability to where it's an afterthought.

[softwaredoug]

"Smaller consultancies" are actually really hard. Especially if you want to deal with larger companies with the type of $$ to pay for consulting. Instead of doing the work you love you end up in procurement and payment hell.

[kensey]

Small consultancies also tend to fall into the trap of having one client (often their first client) that they utterly depend on the money from... but who doesn't depend on them to be able to survive. That customer almost always knows the relationship is unbalanced in their favor (sometimes they went into the relationship specifically because they knew it would be that way) and they will run you ragged with unreasonable requests, burning out your staff and ruining your relationships with other clients because you have to keep them happy so they keep writing checks (and then you're even more dependent on them, as a rancid little bonus).

The only way out is to either gut your way through it till you grow enough to be able to push back without risking your existence; detect that things are going that way early and fire them as a customer before it ever gets to that point... or keep burning out staff till you can't find fresh faces, then close up shop.

[mech422]

God, sales and collections suck ... and Net 90 can be a killer for smaller shops (and big clients tend to expect Net 90)

[jbu]

I know a bit of the history with this one.

Back in the day there was a smaller consultancy with awesome developers called LShift (mentioned here https://en.wikipedia.org/wiki/East_London_Tech_City). They worked out that an open source messaging thing would be useful, and created RabbitMQ (there were details about who, how it was funded internally, etc). That got sold to VMWare, and a bunch of people went with it, but LShift went on as before, happy, but always looking for another Rabbit. Didn't find one, was aquihired in the end.

Meanwhile, some of the Rabbit people formed Weave, looking for the killer business around the early container ecosystem (https://www.weave.works/oss/net/ was interesting, eksctl, flux, CNCF, lots of good things). But I guess they took a bite of the VC apple and sustainable technical contributions was no longer the goal.

I've huge respect for everyone I knew from Weave. Great people all. Best wishes and I know you'll land on your feet.

[mfer]

VC funded and looking for growth opportunities is far different than building a long term sustainable business. The carrot in the business model leads business decisions in very different directions and your setup is different to meet them.

Are there opportunities for VC funded with growth expectations in this kind of business?

[abhiyerra]

This is what we are doing with my company. We build out tooling that benefits everyone and open source most of it, but our bread and butter is consulting. Our consulting leads us to build more tooling to make our jobs easier, which leads to more effectively delivering our consulting.

I think this is the model most of the big shops like IBM and Oracle also use. Infrastructure tooling is not usually a core competency for most companies, and they want others to do it for them.

[ryanSrich]

> I feel like the next generation of this type of company is smaller consultancies that have awesome developers that build customer tooling on the side. But the main revenue driver is consultancy.

The issue here is the lack of appeal for investors, leading to a tenfold decrease in new cos. However, the startups that do launch are likely to be more sustainable

[BrittonR]

I feel like this is how a lot of the Nix community and Elixir community already functions.

[gtirloni]

> that was so popular in the late 2010s

Was? What's more popular than that today?

[goalonetwo]

Since the end of the free money era, a lot of people are rightly questioning the microservice/k8s/cloud-native model that requires you to run an operation team of 20 people and has a baseline cost of 200k$/year for a cluster that doesn't do anything yet.

[tsimionescu]

> Also it really feels like all the air has been let out of the docker/kubernetes/cloud-native balloon that was so popular in the late 2010s.

As someone who works for a company that sells various k8s versions of products and services, we're only now seeing some of our bigger customers really starting to use k8s more exclusively. So at least my experience is the opposite of yours, it seems that at least in some industries k8s is only now seeing significant adoption.