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DevOps Investment 101: An overview of investing in a high-growth industry

patricia-borlovan

Patricia Borlovan

· 3 min read
DevOps Investment 101: An overview of investing in a high-growth industry
Unlock valuable insights into DevOps trends, investment opportunities, and associated risks for savvy investors. Read our blog post now and stay ahead of the curve.

DevOps it's all about developers and operations teams breaking down silos and working together to innovate faster. For many companies, the ability to innovate at a fast pace — responding to market conditions and customer feedback — is a key factor for success. Adopting the DevOps philosophy requires a new mindset, new tools and new skills.

What is DevOps?

Market data and industry experts mention that 47% of teams have adopted full test automation, almost double the previous year, indicating the increasing importance of automated testing. According to David DeSanto, VP of Product at GitLab, who had a recent conversation at It Works On My Computer podcast by Bunnyshell, a DevOps platform is essential, as teams using six to ten tools face increased complexity and maintenance challenges. Moreover, it fosters a culture of shared responsibility, boosting team morale and productivity.

Key Concepts in Understanding DevOps

If you're looking to dip your toes into the thriving ocean of DevOps, there are a few key concepts you should become familiar with. These principles shape the industry and are instrumental in understanding how it works.

Let's dive in, shall we?

1. Continuous Integration and Continuous Deployment (CI/CD)

Picture a manufacturing assembly line but for software. That's CI/CD — a process that allows developers to integrate code into a shared repository several times daily. It's like a well-oiled machine, churning out software updates faster than you can say "DevOps."

2. Infrastructure as Code (IaC)

It's a fancy term, but at its core, it's about managing and provisioning computer data centers through machine-readable files rather than physical hardware configuration. Simply put, it's like building software to manage your software.

3. Microservices

This architectural style breaks down applications into smaller, independent services that can be deployed and scaled separately. It's like breaking a bar of chocolate into its squares, each a delicious, self-contained treat.

With these key concepts under your belt, you're well on your way to exploring the dynamic landscape of DevOps.

Why and how companies are using DevOps?

DevOps acts like a shot of adrenaline to the development process.

This methodology encourages a culture of fast iterations, incremental improvements, and constant delivery. It’s like having your in-house pit crew ready to tweak, tune, and turbocharge your tech as you race toward your objectives.

Startups are always battling against time and budget constraints. By breaking down the silos between development and operations teams, DevOps optimizes the use of resources, reducing costs and accelerating delivery times. In other words, it's like having an early warning system for your tech infrastructure.

The State of DevOps in 2023

The DevOps market is experiencing remarkable growth. In 2022, the market was valued at $8.5B, and experts predict it will continue to expand at a compound annual growth rate (CAGR) of 10.7% and reach $19.4B by 2030. This surge can be associated with various factors, including the increasing adoption of cloud technologies, rapid application delivery, advancements in artificial intelligence, and software automation.

Source: Global DevOps Market

Organizations that have embraced DevOps solutions are already reaping benefits such as faster software delivery, reduced coding errors, quicker issue resolution, and optimized allocation of IT resources, creating a favorable environment for the DevOps industry.

Source: Future of DevOps Ecosystem by Sapphire Ventures

VC Investors in DevOps

The DevOps industry has caught the attention of some of the top venture capital funds, leading to significant investments in innovative startups and companies.

Sequoia Capital, Accel, Index Ventures, and Lightspeed Ventures Partners are just some of the most active VC funds actively seeking opportunities in the DevOps space. These funds recognize the immense potential of DevOps in transforming software development and delivery, and they are keen to support startups at the forefront of this technological revolution.

Source: Emerging Tech Research — Pitchbook

The European DevOps ecosystem

In part, Europe's strength in the DevOps arena can be attributed to its vast and diverse developer talent pool. With 8.8 million developers, Europe boasts 30% of the world's open-source developers. It continues to attract new talent through computer science graduates and remote work opportunities, further enriching the continent's talent base.

The catalytic effect of the COVID-19 pandemic has accelerated the adoption of DevOps principles and drawn ambitious entrepreneurs to contribute to open-source projects and develop cutting-edge tools in Europe and Israel.

Our European ecosystem showcases several exciting trends that mirror those seen globally. Machine learning's integration into the software development life cycle (SDLC), software supply chain security, continuous experimentation, shifting right, and measuring and improving engineering productivity are all driving forces behind the region's DevOps evolution.

Moreover, the focus on next-gen development environments indicates a forward-thinking approach to development practices in the European DevOps landscape.

Local Success Stories

GitLab

GitLab is the leading DevOps platform that provides a complete set of tools to manage the entire software development lifecycle. Offering an all-in-one solution for version control, continuous integration, continuous delivery, security, and more, GitLab has gained immense popularity among development teams worldwide. It enables seamless collaboration, faster development cycles, and improved project visibility.

With +$413M in total funding raised and a valuation exceeding $6 billion, GitLab is one of DevOps's most preferred success stories. Its platform remains a go-to choice for organizations looking to enhance their practices.

Grafana Labs

Grafana Labs has emerged as a key player in DevOps teams' observability and monitoring space. Their flagship product, Grafana, is an open-source analytics and visualization platform that empowers users to effortlessly track, analyze, and alert on their metrics data. Grafana's flexible and user-friendly interface has attracted a vast community of users and contributors.

With +$535M in total funding raised and a valuation surpassing $1 billion, Grafana Labs has become a DevOps success story due to its widespread adoption. The company gained a strong position since it has a critical role in helping organizations gain insights into their complex systems and applications.

Snyk

Headquartered in the United Kingdom, Snyk is a DevOps security platform that addresses vulnerabilities in open-source libraries and containers. As open-source adoption continues to rise, ensuring the security of third-party code has become a critical concern for developers.

Snyk offers a comprehensive solution that allows organizations to identify and remediate security issues early in the development process, reducing the risk of potential breaches. With its innovative approach to security and +$1.2B funding raised in +10 rounds, Snyk has earned its unicorn status and is actively helping organizations worldwide embrace secure DevOps practices.

The DevOps market is thriving, driven by cloud adoption, AI advancements, and the need for faster software delivery.

The pandemic has only accelerated this growth as businesses embraced digital transformation. While challenges exist, the ongoing efforts to standardize and optimize DevOps practices indicate a promising outlook for the development of the operations industry.

With its vibrant talent pool and an array of promising startups, Europe stands as a strong ecosystem for DevOps innovation, poised to shape the future of software development and delivery globally.

Read more articles about startups, financing, and equity ownership on our blog.

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