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Infrastructure Software
Dharmesh Thakker  |  October 7, 2020
State of the OpenCloud, Part 2: Best Practices for Entrepreneurs in a Covid-Focused World

Last year, my team and I introduced our first “State of the OpenCloud Report”. The research pinpointed some of the mega-trends—including cloud computing and the rise of open-source technology—that are upending today’s huge enterprise-IT market as organizations across industries push to digitize their operations by modernizing their technology stacks.

What a difference a year makes.

Despite the tumult of Covid-19, a stark economic recession and now, a crazy presidential election, the trends we outlined last year continue to grow stronger. Many companies built on the tenets of OpenCloud are actually benefitting from the current environment: The recession has made organizations more focused than ever on staying nimble and rapidly innovating to serve customers, which usually requires creating and deploying cloud-based software. Many of these organizations are also scooping up technology that facilitates team collaboration, which is critical in the current work-from-home environment; others are seeking new tools to keep their software and networks secure.

This has all translated into some prominent initial-public offerings for cloud-native companies this year—deals few could have imagined during the initial shock of the pandemic in March and April. And of course, the Big Three public-cloud providers—Amazon Web Services, Google Cloud and Microsoft Azure—continue to grow, and together now have estimated, annualized revenue of around $100 billion, according to public reports.

Today, we delve deeper into these topics in our “State of the Cloud 2020” report.

State of the OpenCloud 2020 from Battery Ventures

The report, delivered during our (now virtual) OpenCloud industry conference, offers an additional layer of strategic and tactical advice for entrepreneurs building cloud-first companies in areas including product; go-to-market strategy; and development. Broadly speaking, the tactics represent a playbook for founders building open, cloud-native products that can be sold in a bottoms-up manner, driving adoption quickly and creating ROI for customers. We have outlined some of these in our previous Cloud Native Entrepreneur’s Playbook. Some of the best practices include:

  • Targeting “practitioner” buyers inside organizations, like data engineers and DevOps experts, rather than high-level buyers like CIOs and CISOs;
  • Building your product in the cloud initially, as opposed to on-premise, which can create a quicker path to $100 million in ARR;
  • Leveraging different paths to efficient customer growth, including the best features of open source and SaaS;
  • Using usage-based or pay-as-you-go pricing, where appropriate, to drive faster sales cycles;
  • Focusing on retention and customer success, which is more important than ever for managing churn;
  • Spending time to understand and nurture your community of users, and also working with open-source foundations;
  • Managing “technical debt” by codifying policies and standards early in development; and
  • Building a distributed, global developer workforce—more relevant than ever in a work-from-home, Covid-19 world.

Despite the pandemic and the related disruptions to the macro economy, technology–and specifically OpenCloud–has been a bright spot in the market. The work many entrepreneurs are doing at the cloud-infrastructure layer continues to give other Covid-impacted businesses across industries a fighting chance to survive and thrive. From big-data analytics enabling vaccine research, to mobile applications delivering telemedicine, to digital storefronts enabling restaurants and retailers to stay in business, there is a broad opportunity today for organizations to innovate and transform thanks to enabling cloud technologies companies. Our team at Battery is excited about the next generation of OpenCloud companies in the making, and we’re happy to help if we can ever be a resource to support your growth journey.

This material is provided for informational purposes, and it is not, and may not be relied on in any manner as, legal, tax or investment advice or as an offer to sell or a solicitation of an offer to buy an interest in any fund or investment vehicle managed by Battery Ventures or any other Battery entity. 

The information and data are as of the publication date unless otherwise noted.

Content obtained from third-party sources, although believed to be reliable, has not been independently verified as to its accuracy or completeness and cannot be guaranteed. Battery Ventures has no obligation to update, modify or amend the content of this post nor notify its readers in the event that any information, opinion, projection, forecast or estimate included, changes or subsequently becomes inaccurate.

The information above may contain projections or other forward-looking statements regarding future events or expectations. Predictions, opinions and other information discussed in this video are subject to change continually and without notice of any kind and may no longer be true after the date indicated. Battery Ventures assumes no duty to and does not undertake to update forward-looking statements.

*Denotes a Battery portfolio company. For a full list of all Battery investments, please click here.

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