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June 3, 2020
Welcome to Protocol Cloud, your comprehensive roundup of everything you need to know about the week in cloud and enterprise software. This week: A spring we'll never forget, Docker's big reset and Zoom's amazing quarter.
The Big Story
There's something happening here
None of us chose this moment in time to be here. And none of us will ever forget it.
It is a privilege to be paid United States Dollars to write about something as important but esoteric as cloud computing. But at a time like this — as many American citizens watch lines be crossed in ways they never thought they would be — it can seem difficult to justify why anyone should care about enterprise computing.
But actually it matters deeply: Enterprise technology provides the infrastructure for everything good and bad about the current state of the world. After months during which cloud companies fell over themselves to explain how closely they were working with federal, state and local governments amid a pandemic, their tone has changed.
- As protestors fill the streets calling for an end to police brutality, tech companies are once again being scrutinized for their role in providing law enforcement with the tools used to police the country.
- And as Protocol's Lauren Hepler and Emily Birnbaum reported Tuesday, black tech workers increasingly feel "it's time to be brutally honest" with their employers about the need for systemic societal change.
- That — once again — puts tech companies in the awkward position of issuing public statements standing up for civil rights while internally justifying business deals with law enforcement and government agencies on the other side of the issue.
Although they've all expressed some degree of sympathy with the fate of George Floyd and solidarity with the protests that followed his death, AWS, Microsoft and Google have all been vocal in the past about their desire to provide cloud tech tools to law enforcement agencies.
- In some respects, the outsized scrutiny placed on tech companies is unfair: Nobody's calling on soda distributors to stop filling vending machines at police stations, even if it might be a good idea if everybody laid off the energy drinks for a while.
- In other respects, it's not: Tech companies are overwhelmingly composed of rich white men. Many have long struggled to put in place compelling diversity initiatives. And in some cases they're trying to sell to police departments and federal agencies technology that has been shown by researchers to be racially biased.
- Microsoft's big JEDI contract victory, which is currently being reassessed by the Department of Defense, looks a little different now that the military is being used to suppress protest.
- Presumably nervous about taking substantive action, most big tech companies have issued public statements akin to the "thoughts and prayers" rhetoric that often follows in the wake of a mass shooting.
All things must pass. But tech companies are probably fooling themselves if they think they'll be able to do business as usual in the future with police departments, state governments and federal agencies that conduct themselves in this fashion.
- Big Tech is already seeing pushback: Online therapy service Talkspace, for instance, demonstrated that it's possible to take a stand when it rejected money from Facebook this week.
- Direct action with money speaks loudly from Big Tech — hopefully we'll start to see more of that money donated to organizations that are working to protect civil rights.
- And people are watching: Users, consumers, employees — present and future — are waiting to see how tech companies handle themselves right now.
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This Week In Protocol
Contain multitudes: Docker, the container pioneer, got off the enterprise startup roller coaster last November, selling a huge chunk of its business to Mirantis and refocusing on the business that made it famous. Docker CEO Scott Johnston and I talked last week about its chaotic past and its plans for the future.
Blocked and reported: My colleague Shakeel Hashim chatted with Wasabi CEO David Friend, who thinks his cloud-storage startup fits into a future in which tech infrastructure will be built block by block using lots of vendors, like assembling Legos. Color me skeptical: While Wasabi's services are much cheaper than paying AWS or another major cloud vendor for storage, if you're spending a lot of money on computing, AWS would probably cut you a deal on storage pricing.
Five Questions For...
David Ulevitch, general partner, Andreessen Horowitz
What was your first job in tech?
My first job was the summer of eighth grade around 1996 when I worked at a mom and pop ISP called Electriciti. It was started by Chris Alan, who was a pioneer of peering on the Internet. I'm grateful to have had that job because Chris hired extraordinary people who taught me a lot and who went on to be engineering and product leaders at Microsoft, Splunk and others — and I was even lucky enough to hire a few at my old company, OpenDNS.
What's the best piece of advice you could give to someone starting their first tech job?
I've always believed that strategy is determined by the people who do the work, so my advice is: "Do the work." That might mean doing research about what you're working on, making sure you're doing the right work, signing up for the annoying tasks, and following through to a high degree.
What has changed the most at your company over the past three months?
Structured communication has increased dramatically. We're explicitly creating more all-hands moments, more Q&A, more 1:1s. We want to know how people are doing, we want people to know what's important and why it's important, and we want people to feel connected. Making room for that has been critical and wonderful. I think productivity has gone up, too.
What will be the biggest challenge for cloud computing over the coming decade?
It's hard to predict the future, but I would say the primary challenge for cloud computing is managing the exploding data privacy and security regulations that are being created across geographies and regions. Companies will increasingly look for cloud solutions to help them stay secure and compliant, which represents a tremendous opportunity, too.
Will the pandemic usher in a new era of remote working, or will we all come back together when it is safe to do so?
It's clear that a lot of employers previously believed many jobs couldn't be done remotely and now clearly have shown they can be. And it's important to remember that WFH during a pandemic is the least ideal form of WFH: People haven't planned for it, haven't set up home offices, they have increased child care needs, and they have the stress of major health issues going on. If things are working this well with all that, it stands to reason that remote work will stay for many people after the pandemic ceases to be a primary driver for remote work.
Around the Cloud
- Zoom turned in one of the best quarters that the tech business has ever seen, as revenue surged 169% compared to the same period last year, when millions of people had no idea what Gallery View even meant.
- Box also did well, beating Wall Street estimates amid a similar but not-quite-as-big surge in the use of its cloud file-sharing tools.
- But Salesforce, not so much. It reduced its full-year revenue and earnings guidance, telling investors it was offering pandemic-affected customers "temporary financial flexibility."
- Big cloud providers are unlikely to raise prices amid the pandemic, but price cuts might also be hard to come by as costs rise as a result of the extra infrastructure needed to accommodate demand.
- While Docker hosted its first developer event since the Mirantis deal, Mirantis released the first update to Docker Enterprise since the deal closed.
- Cisco's enterprise push continued with the purchase of cloud monitoring company ThousandEyes.
- The Cloud Native Computing Foundation has a new director: Priyanka Sharma. She replaces Dan Kohn, who will remain with the Linux Foundation working on open source and healthcare.
- Remember Zenefits? Founder Conrad Parker is back with a new HR startup focused on making it easier to get new hires on board.
Thanks for reading — we'll see you next week.
Correction: A previous version of this article misspelled the name of David Ulevitch. Updated June 4, 2020.