Fig. 01
In our last piece of this series, we talked about why you should keep an eye on the European developer tools market — in short, it’s booming. Here, we unpack our framework.
In an age where every company is a software company, developers aren’t just an in-demand resource, but drivers of business strategy. They constitute a huge market, and a valuable one.
Whether built for them or selling through them, innovative developer tools that capture the hearts and minds of the developer community have a chance of capturing the wallets of almost every single company, too.
As the development lifecycle evolves and the market expands, some exciting trends are emerging. New players are entering the market to address gaps and opportunities created by the first wave of developer tooling. As investors in early-stage B2B software companies, we have a unique perspective on what sets the winners apart, and how to identify and assess them.
Trends changing the way developers work
Fig. 02
Over the last few years, three key trends have emerged to change and optimise the way developers work: CI/CD (DevOps), Cloud Native Solutions and Open Source “2.0”.
These drivers enable a number of critical steps in the devops pipeline — the process followed by development and operations teams to build, test and deploy new software. Those areas include collaboration, monitoring, API management, testing and security, containers and permissioning.
Fig. 03
Continuous integration (CI) and continuous delivery (CD) are approaches to software development that have risen rapidly in popularity, and are changing the developer landscape. The days of monolithic builds are on the wane, while CI/CD, packages and microservices, accelerated by the ubiquity of cloud, grow.
CI/CD allows developers to create smaller pieces of code which are pushed more frequently using automated processes. Large and infrequent changes are more cumbersome, increasing the risk of errors and service disruption. CI/CD results in better quality code and more frequent delivery.
And this approach generally offers a better experience not only for customers but companies, too. It’s an agile process that’s more adaptable to changing business and market needs. As such, the titans — Redhat, JFrog, Synk, GitLab (as well as Atlassian and Github) — accelerate go-to-market for the companies that use them.
Fig. 04
Working in the cloud rather than on-premise is more flexible, as none of the elements are hard-wired to a specific infrastructure. It means code changes can happen rapidly, and software can be scaled up and down according to demand. It’s also more resilient, capable of automating the replacement of failed components.
DevOps, CI/CD, Microservices and Containers are increasingly turning to Cloud Native Solutions. Again, they’re loved by businesses as well as developers; they streamline costs and operations and can be accessed and managed remotely.
Developers are at the centre of open source tools and have fueled their adoption. The roots of open source go back to the early 90s. Open source is loved by developers because of the level of transparency and control it offers, and the opportunity to work collaboratively to find solutions to complex challenges — anyone can study, change and distribute the software for any purpose. But it’s only more recently that we’ve seen these businesses successfully commercialised (hat tip to a16z). Open source 2.0 tools build on this business model, taking a bottom-up approach to commercialise software that is, by definition, free.
Focus on developer communities and developer relations (DevRel) strategies is central to early growth models in this space, setting them apart from traditional B2B SaaS companies at the outset — though they become more alike as they scale.
Opportunities for developer-enablement tools
As these trends continue to evolve, they’re exposing gaps in the DevOps pipeline — and opportunities new entrants would do well to take note of. There are six key areas we think innovators can capitalise on to win substantial market share.
1.Deeper collaboration among developers
Fig. 05
As developer tools proliferate, the marketplace is becoming noisy. That opens up an opportunity for tools which can help development teams streamline, consolidate and collaborate. Now, they’re more important than ever.
Tools that focus on unified platforms for a diverse tech stack, and increased automation of pipelines, could take early ownership of what’s currently a relatively white space.
- Gitpod — Cloud-native dev environments as code
- Northflank — Cloud native end-to-end dev workflow
- Traefik — Infra for microservices applications
- AxonIQ — Event-driven microservices platform
- Fiberplane — Collaborative notebooks for incident resolution
- Codesandbox — Online IDE for rapid web development
- Git Duck — video collaboration for developers
- Devfair — ‘remote development hub’ with solutions for collaboration, agile working
2. Monitoring & analytics
Fig. 06
Managing the tech stack is only one piece of the puzzle; developers need tools to monitor it, too. While Cloud Native infrastructure allows multiple microservices to operate in unison, the lack of a single source of truth can create a ‘black box’ for developers.
It’s hard to identify issues as they arise, much less get to the source and fix them. Monitoring platforms that provide visibility over APIs, databases, serverless platforms, analysis tools and other elements in the stack are therefore becoming critical to detect errors, improve performance and streamline CI/CD workflows.
Furthermore, the next generation of product analytics is here, with developers and technical PMs seeking deeper, granular, visibility into user experience.
- Dashbird — Serverless monitoring and debugging platform
- Swarmia — Manage overall workflow improvement
- Linearb — Software Delivery Intelligence platform
- Asayer — Unified platform for troubleshooting
- Posthog — Open source product analytics
- Unleash — Open source solution for feature roll-out
3. Automated APIs and API security
Fig. 07
There’s a huge shortage of skilled developers. And with the SaaS market continuing to swell, that gap is widening. For this reason — and the ubiquity of the cloud, which enables it — more companies are choosing to buy rather than build key components in their stacks. APIs make it easy to integrate them. But with enterprises planning an average of 34 new integrations in the year ahead, they’re again becoming unwieldy — and that puts businesses at risk. API security and management tools could drive an inflection point in the hyper-successful API space.
- Superface — Automated API management with increased customer autonomy
- HTTPie — Debugging and interaction of APIs
- 42Crunch — End-to-end API security platform
- Noname security — Holistic API security solution
- Tyk — API and service management platform
- Bearer — Monitor, debug APIs for reliability
- Blobr — Business.product layer for APIs
4. Testing & security shifting left
Fig. 08
As uptake of continuous development models increases, development teams are realising the need for continuous testing, too. It makes sense: a defect captured in the design stage costs $1 to fix; the same defect captured in the maintenance stage costs $100.
The DevOps pipeline is becoming more flexible and dynamic, and as such, testing is starting to happen earlier. Rather than wait to test post-code repositories, next-generation tools focus on unit testing alongside code development, testing automation and developer-led AST. But some early movers are already leading the market, so new entrants will need to take a different approach to win traction.
5. Future of container management
Fig. 09
Containers ‘package up’ code and dependencies into a single unit of software, so applications can run reliably in any environment. They’re popular because they free up developer time for more important tasks earlier in the pipeline.
There are incumbent tools in the space, and they’re well-established. But they’re not untouchable. Those that can offer more flexibility than tools like JFrog and Github, and help with the management of multiple containers, have a fighting chance.
- Kubermatic — Automate operations of Kubernetes applications
- Cloudsmith — Cloud-native universal package management solution
- Qovery — Container as a service platform
Fig. 10
At the coalface, super-fast real-time data is increasingly becoming the norm — a standard for developers who are used to using in-app analytics and internal business intelligence tools daily.
Meanwhile, data products and reverse ELT are key areas of innovation, along with advanced querying, and new infrastructure for real-time analytics.
- Altinity — Fully Managed ClickHouse in AWS
- QuestDB — Fast SQL for time series
- Tinybird — Fast real-time insights using SQL pipes