The typical developer workflow is to develop locally and deploy to a server. However, a developer’s system and production servers have many libraries, hardware, and environment mismatches, due to which the shipped code rarely works.

To avoid this, developers spin-up virtual boxes called ‘containers’ on their local system, package the code with all dependencies and then deploy the container to a server, making the code independent of the underlying tech infrastructure.

Before containers, developers built applications by spinning up virtual machines (VMs) on their local systems. But containers are lightweight and new instances of apps can be spun up much faster while also being portable, so an app can be moved across cloud servers without any issues.

Docker wasn’t the first company to launch containers but found traction by providing a superior developer experience through open-source tools and a straightforward command line interface (CLI). It rode the shift in developer workflow from building large monolithic applications to microservices-based architecture with the code split into thousands of smaller pieces.

Docker’s key components are:

With 20M+ users, Docker is the most popular containerization platform, but there are several other tools that individual developers and teams can use to create and manage containers. Many of these tools are free to use, with the key trade-off being that they don’t necessarily offer:

Containerization standards like OCI (Open Container Initiative) have standardized managing container images, making it possible for developers to replace Docker in their containerization workflows.

Developers can combine Podman and Buildah from Red Hat to replace Docker in Linux OS or add point solutions to their workflows, such as Containerd, to manage container lifecycle.

However, none of the existing tools fully replace how Docker integrates various containerization components, letting developers focus on writing the actual code. Docker is deeply entrenched in developer workflows, and it is not yet expensive enough for them to move en masse to free tools.

Revenue expansion from existing users

7-10% of Docker’s 15M users have upgraded to paid tiers, providing Docker a big opportunity to expand revenue by upgrading more users. Even at scale, Docker remains a very small component of the infrastructure cost for most enterprises compared to the likes of AWS, making it easier for them to expand by adding more seats. It recently launched Docker Desktop (its paid product) for Linux OS, used by ~50% of developers globally. Docker is also making Docker Desktop more attractive for developers, accounting for 50% of the upcoming feature releases, per Docker’s product roadmap.

Launching new products

With the rise of cloud computing, developers continue to look for more ways to securely run any code on any infrastructure. Docker is adding such technologies under its wrapper instead of limiting itself to containers, adding the developers of these new techs to its user base. For instance, Docker recently released a way to build WebAssembly apps inside Docker on local systems. Like Docker, WebAssembly allows developers to wrap their codes into secure virtual boxes, and while WebAssembly started as a browser-based tech, it is moving quickly to the back end, used by apps like Disney+ and Shopify.

Churn from business model shift

In the past, using Docker for development was a no-brainer for many teams in part because it was free to use. By turning on monetization, Docker runs the risk that budget-conscious dev teams will look to migrate from Docker to free alternatives—particularly in a potential recession scenario.