We’re excited to announce today we’re leading Replicated‘s $25M Series B.
SaaS applications have seen an enormous rise over the past 20 years. Vendors now provide customers with access to a multi-tenant instance of their product, allowing them to serve countless customers with a single install of their product, managed in the cloud. For end customers, SaaS applications have eliminated the complexity of managing physical servers, reduced the time-to-value and the cost of deploying software, and shifted the burden of customer success from the customer to the vendor. Vendors, however, are drowning in the cost of managing and scaling these multi-tenant applications. In fact, we have observed that at most large SaaS vendors, more than 90% of the engineering resources are dedicated towards scalability at the expense of working on customer facing features. Innovation grinds to a halt.
For decades, it was assumed that multi-tenancy was the most efficient way to build and distribute SaaS products to end customers. However, we believe that a number of trends are starting to change this reality.
First, software development has become increasingly cloud-native. A number of factors have fundamentally changed the way developers create applications, including the rapid growth of cloud infrastructure, the adoption of microservices and containers, and the emergence of Kubernetes as the standard container orchestration technology. The net impact of this rapid shift is that developers can build applications that are more scalable, resilient, efficient, and portable.
Second, we have also seen a dramatic change in how companies adopt software. A new generation of modern software companies has emerged, which leverage open source or open core business models to distribute enterprise software bottoms-up, typically into environments controlled by the end customers. Those environments vary widely from customer to customer and can be in the public cloud or in air-gapped data centers.
Lastly, enterprise customers continue to navigate a complex set of operational, regulatory, and security requirements which require them to manage data and applications in secure, dedicated, and controlled environments, whether in their own data center or in the cloud. These requirements have always been a challenge for software vendors and their customers to manage, and are becoming increasingly complex due to an evolving landscape of data privacy regulations and rising security concerns.
We believe all of these factors are contributing to a future where we will see a rise in modern single-tenant applications—what we call “modern on-prem.” These applications will be built and delivered in a cloud-native way but will be managed in a customer-controlled environment, wherever that may be. The question customers are facing is no longer “do I buy a SaaS or on-prem version of the product?” Rather, it is “do I buy a service or an instance?,” where an instance is a customer-managed application. Over time, we believe we will see even more use cases for single-tenant software, particularly for AI and ML applications, which usually need to be run in close proximity to the data in customer-managed environments.
Enter Replicated. Replicated makes it easy for software vendors to package and distribute their product to any customer-controlled environment. Their platform provides vendors a set of tools to install, configure, troubleshoot, and automate the management of their products to conform with the unique requirements of enterprise buyers. Replicated not only makes it easier for vendors to solve for the unique needs of their buyers, but to also manage the countless deployments across their customer base to ensure they are consistently meeting these needs. All of this enables developers to spend less time on table-stakes capabilities like pre-flight checks, license and entitlement management, and support, and focus on building differentiating features that can help their businesses succeed.
The Founders of Replicated, Grant Miller and Marc Campbell have lived in the world of enterprise software for over a decade. They have witnessed and experienced how challenging it is for software companies to build products for enterprises that have a complex set of needs and have used that knowledge to build a leading provider of modern on-prem solutions. Replicated’s product has already been adopted by a number of leading software vendors who recognize the sophistication and power of the platform. Customers like HashiCorp, Puppet, and UiPath trust Replicated to power deployments in half of the Fortune 100. Additionally, Grant and Marc have become respected thought leaders in the enterprise software industry. They created EnterpriseReady.io, the ultimate guide to selling enterprise-grade software and its accompanying podcast, which has been downloaded by tens of thousands of listeners around the world.
We are thrilled to be partnering with Grant, Marc and the entire team at Replicated on their mission to pioneer modern on-prem software. We are still in the early days of cloud adoption, and we believe Replicated will be a foundational company in this emerging landscape for years to come.