Velocity is one of the major driving forces behind modern software development, and JFrog quickly showed the public markets Wednesday why companies are interested in tools that help them go fast.
Shares in JFrog rose 47% Wednesday during its first day of trading on the Nasdaq, closing at $64.79, compared to the listing price of $44 per share. That values it at more than $6 billion, a pretty good return for the 12-year-old Israeli company's investors, who poured $226 million in the company as it grew.
"Every company is now a software company," said Shlomi Ben Haim, co-founder and CEO of JFrog, in an interview with Protocol on Wednesday. However, "every company was not created as a software company," and those scrambling to modernize their approach to software development need help making that transition, he said.
JFrog offers a series of software development tools that help companies manage the process of getting software from the idea stage to production. These tools allow companies to manage their code repositories, monitor the entire development pipeline for potential issues or problems, and deploy that code to self-managed servers or cloud services.
This entire process has grown more complex in the cloud era. Software construction used to proceed at a relatively plodding pace through various stages of development, with predetermined release cycles that introduced relatively large changes to the code base. However, the modern approach to software development involves making lots of smaller changes to the code on a more frequent basis, which helps stamp out bugs, introduce new features, and shift priorities according to market forces much more quickly than older processes allowed.
JFrog's software can be consumed as a service on all three major cloud providers or managed on a company's own servers, and customers also pay for support services. JFrog recorded $94 million in revenue during 2019, a 69% jump compared to the previous year.
The company and its investors are betting that the massive number of companies that have yet to contemplate modernizing older tech investments are starting to realize they have no choice, lest they be swept away by newer, more-nimble competitors. Tools like JFrog's are an extension of the DevOps movement, which is as much a cultural shift in thinking inside software factories as a technical one toward faster and more flexible software development.
Over the long term, emerging concepts like serverless computing and low-code development could upend the way companies think about building and shipping software, but JFrog's tools seem well-adapted for companies that built software around virtual machines — the basic processing unit of cloud computing — and are starting to embrace containers.
And as rings true for any company operating on the cloud in 2020, the cloud providers themselves are increasingly interested in providing similar tools to help big clients make the leap onto their platforms. But JFrog executives believe they can operate as a neutral party among cloud vendors and on-premises hardware vendors starting to get into application management services.
