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**Scott Johnston:** \[14:25\] Yeah, yeah. So a lot of pain on the frontend of that. So when we did the divestiture recapitalization, the pivot, we unfortunately cleaved off a whole set of commercial technology. The Docker Enterprise Data Center, Product Data Center and Production/Product - we unfortunately had to say g... |
And so as painful as that was, it was intentional in the spirit of letting the company shed its past, and just simplify and focus on the needs of developers. Because as you know, there's no such thing as one and done. You always have a customer you have to take care of, or a legacy code you have to maintain... And we j... |
And then we really got back to basics, Adam. We knew that with that type of severe pivot, that we had to take care of the people first, the employees first... And so we really made sure we communicated early and often with the remaining employees, we sat down and started rebuilding our culture... And we really thought ... |
The second though, maybe to your question, was developer obsession. And that second virtue started as customer obsession, and we said, "No, no, no, that's not sharp enough." And so within a month, we said, "It's developer obsession." And virtues, as with other values, other frameworks, other companies use, they're desi... |
The third one is open collaboration, and fourth is bias for considered action. And then the bias for considered action is there because we were at 60 people again, and we had an opportunity to move quickly, to listen, and make decisions. And we wanted to take advantage of that small size. |
And so that was the start of it... And then we also were very transparent and humble and vulnerable with the community, particularly the Docker captains, who are kind of our Uber community members... And we sat with them and said, "Okay, developer obsession, serving developers... As you touch with products, and as you ... |
\[17:56\] So hopefully you're hearing an intentionality of both features that serve developers on their day to day, but also a go-to-market model that respected where they were, and gave them the freedom to make economic decisions on their own timeframe, was really the impetus and the way we kind of jumpstarted things ... |
And maybe just to zoom back and share with you kind of where we are, that we're holding both those true - both the monetization, as well as the community. Another stat is we have about 14 and a half registered developers. So the 20-some at the top of the funnel are anonymous, a subset of those registered with us, 14.5 ... |
So I wandered a little bit there toward the end, Adam, but hopefully that shares with you kind of where we were three and a half years ago, and how we set about restarting this next chapter. |
**Adam Stacoviak:** Yeah. Well, I'm trying to get clarity on the struggle really, because - I mean, four and a half years old, if you agree with my terminology, four and a half year old right now, since the change in 2019... You're really much in a new pivot of the business. So in a lot of ways, like you said, you had ... |
**Scott Johnston:** That's right. |
**Adam Stacoviak:** And I'm trying to bring clarity, obviously through this questioning, because today there's a lot of shake-up, I suppose, around Docker. Especially Docker Desktop, there's a lot of - I guess there was some recent concern about it not being open source... And in 2021, whenever you changed some of the ... |
**Scott Johnston:** True. |
**Adam Stacoviak:** And in 2021 you made that change. Can you speak to that struggle and that change, and how that got you to where you're at now, from a revenue standpoint? |
**Scott Johnston:** Yeah, there's a couple of good threads in there. First is Docker Desktop is an engineered product that includes many upstream open source projects. So it includes Docker Engine, which is open source, it includes Docker Compose, which is open source, it includes Docker Build, which is open source. It... |
The closed source nature at the time was really focused on the integration of those open source components with the local file system networking compute on the Mac and Windows. There's a lot of hardcore engineering in there, and we thought that was valuable, and so hence the reason we closed sourced it. But the real dr... |
\[22:00\] So that's an example of what became a closed source feature for the large business customers, who were happy to pay for it. Well, notice that that doesn't take anything away from the end developer experience, which is still free, and if free in Docker Desktop isn't sufficient - because I mentioned before, 13.... |
**Adam Stacoviak:** For sure. It's a big free base, yeah. |
**Scott Johnston:** ...then they can just reassemble that experience from the open source tools. And so the monetization was geared not towards monetizing the developer, but monetizing the managers and the security folks who have budget for paying for features to help manage and scale out these development environments... |
So SSO was an example. Another example, just to, again, be concrete, is support for virtual desktop. So VDI. So VMware has a VDI stack, Citrix has a VDI stack, Azure has a VDI stack... And in large, regulated industries like financial services and healthcare, they don't allow developers to have laptops; they have VDI, ... |
So I'll pause there, Adam. Hopefully, that gives a couple examples of the monetization is geared towards managers, not geared towards monetizing the end developer directly. |
**Adam Stacoviak:** I guess where I struggle, I suppose, is not to say, "Hey, Scott... Open source, man... You've got to open source this thing." It's not about that, really. It's about - as I have researched your story personally, and I've researched Docker's story as an organization, I see more and more how important... |
The point I'm getting at, I suppose, is that it seems to me that Docker Desktop is like paramount. It is the bedrock of everything you're building upon. And while I understand and I hear you on single sign-on and these other features... And I'm not even saying "Hey, be open source" necessarily, but I wonder why -- you ... |
**Scott Johnston:** Yeah, it's a good one, Adam, and it's one that we spent a long time, not only internally, but talking with community members, talking with a lot of folks in different parts of the community, on the DevOps side, on the developer side, in different parts of the developer world, open source developers,... |
\[26:07\] And I guess standing back, the data suggests that - maybe not for everyone, but call it again 99% were there because of the... Was it 14-some million registered developers with us, 13 and a half million are still using Docker Desktop for free, in the upstream technologies - Docker Engine, Docker Build, Docker... |
One of my execs has a phrase, "Reserve the right to be smarter in the future", and so we're always listening, we're always trying to gauge like "Okay, where's that balance? Does it make sense to open source other surface areas further?" And so we reserve the right to be smarter in the future, but right now, kind of wit... |
**Adam Stacoviak:** Gosh. |
**Scott Johnston:** 30 million times, just the container runtime. |
**Adam Stacoviak:** Several of those are me, a month... Standing up a new image, or tinkering, or something like that... Yeah. |
**Scott Johnston:** BuildKit, which is a subcomponent of the stack - BuildKit is downloaded 30 million times a month. So I don't know, it feels like we're in a good place. And yes, there are legit competitors, who we have nothing but respect for... But given the scale that I shared with you, it feels like we're in a go... |
**Adam Stacoviak:** For sure. I think my line of questioning is less, again, back to "Hey, Scott, just open source it", but more like it's so important, and to fully own it. And sometimes in business we welcome competition, because competition helps us to level up, and sometimes it kind of sucks, because they beat us a... |
**Scott Johnston:** Yeah, and it's a fair question. It's a fair question. \[unintelligible 00:28:09.18\] something that we return to early and often. |
**Adam Stacoviak:** Yeah. I guess you reserve the right to be smarter in the future, right? |
**Scott Johnston:** Every day. Every minute of every day. |
**Adam Stacoviak:** \[laughs\] That's the beauty of it. Okay, so let's swing then, I guess, to your plans for revenue, how you make money, what is the business model currently. And the reason why I'm camping there is because we spent so long for Docker to be essentially free. And now it's not necessarily free, or Docke... |
**Scott Johnston:** Sure. And maybe to qualify the statement - you're right, it's no longer free for everyone 100% of the time. It's still - of the 14.5 million registered developers, 13-some million of them are continuing to use it for free, while 1.1 million seats of Docker Desktop are paid-for seats. Which is still ... |
**Adam Stacoviak:** It was zero before, right? |
**Scott Johnston:** Well, it was zero before. |
**Adam Stacoviak:** That's right. |
**Scott Johnston:** So you had 100% free before, and now you have 90-plus percent free right now. |
**Adam Stacoviak:** For sure. |
**Scott Johnston:** So it's still a good free base. But to your point, really, the way in which we had to change - because before our packaging pricing was very much geared towards datacenter, operations and servers... And so we said "Wait a minute, that's not how developers and their managers pay for things." And so w... |
\[30:12\] For those who are consuming a lot of those, they can buy additional capacity and kind of a consumption model, above the kind of base $5, $9, $24 price. And so broadly speaking, that's the businesses that organizations will buy on a per-seat basis, and then if they want even more capacity, more consumption, th... |
Now, into that - and that's kind of the core Docker Desktop, Docker Hub base or a product. On top of that, very exciting to release new products recently, that are add-ons to that. And so we released a product called Docker Scout, which allows developers to have insight right there, and then on the laptop of what is go... |
And so those are examples of -- and both those, by the way, have free experiences, Adam. So there's a way to kind of get a lot of value for free, but if you, again, want to use it at scale, and if you want additional features that plug into the management and security features of large organizations, then that unlocks ... |
**Adam Stacoviak:** Do you feel like you have to apologize for making money on top of open source as a person, like CEO of Docker? Do you feel like you have to apologize for that? |
**Scott Johnston:** Apology is an interesting word. I feel that we owe it to ourselves and to the community to explain the why behind it. |
**Adam Stacoviak:** For sure. |
**Scott Johnston:** And that if we agree - and you said this before, which I appreciate, that Docker has become a ubiquitous part of the modern application compute fabric... In order to continue to do so and continue to innovate for developers, whether it's free or not, open source or not, we need to be able to pay our... |
So it's less about apologies and more just -- I think when something has been so ubiquitous and free, and the perception of the positioning has been open source, everything open source all the time, and if we expect the community to continue to support us in this sustainable Docker journey, I think it's a fair burden o... |
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