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Another new CloudBees CEO faces fierce CI/CD tools rivalry

Former SAP and Cisco strategy exec Anuj Kapur is tasked with keeping CloudBees CI/CD and DevOps platform tools relevant as the cloud-native arms race intensifies.

A new CloudBees CEO took the helm this week, saying that software delivery via CI/CD tools like the ones the company markets has never been more essential to enterprises.

But the challenge Anuj Kapur will face, according to industry watchers, is that enterprises have also never had more CI/CD product choices, including from newer vendors that have already outpaced CloudBees' recent growth to a $1 billion valuation.

"I spent a lot of time with our AppDynamics business when I was a part of Cisco, really understanding the criticality of software and applications to the transformation agenda for Global 2000 organizations," said Kapur, who has been appointed president and CEO at CloudBees. Previously, he worked as president of corporate development and strategy at SAP from mid-2020 until September 2021, and served as chief strategy officer at Cisco from 2018 to 2020.

"Software can define an organization, or the software of competitors can destroy the organization ... the criticality has never been greater," Kapur said.

Kapur's predecessor, Stephen DeWitt, joined the company in February 2021 and stepped down at the end of May 2022. DeWitt cited personal reasons for his departure in an early June blog post.

Kapur said he expects his priorities in his first 30 days as CEO to be nearly identical to those DeWitt laid out last year: speed up product innovation, strengthen the company's marketing approach, achieve geographical expansion and scale the company's global operations.

Anuj Kapur, CloudBeesAnuj Kapur

Under DeWitt, the company added 200 more employees, and its annual recurring revenue (ARR) grew from $100 million to $125 million. In December, CloudBees raised a $150 million series F round of financing on a $1 billion valuation.

DeWitt had also emphasized plans for acquisitions. These came to fruition in the company's purchase of U.K.-based stealth compliance automation startup Neuralprints, which formed the basis of the CloudBees Compliance product.

Kapur didn't rule out further M&A, but he declined to specify revenue growth targets or in what direction he plans to push the development of new products as he comes aboard. Kapur said DeWitt's previously stated goal of a CloudBees IPO is "possible," and that the company would disclose more details about its product direction at its annual DevOps World conference next month.

CI/CD market battle rages on

Some industry observers pointed out that younger competitors in the CI/CD tools market, including GitLab and Harness.io, reached $1 billion valuations more quickly than CloudBees. GitLab was valued at $1 billion in September 2018 after seven years of operation; Harness was valued at $1.7 billion in January 2021 after three years in business.

By comparison, it took 11 years for CloudBees, founded in 2010, to reach that milestone.

"Their tech debt is massive," said former Air Force and Space Force Chief Software Officer Nicolas M. Chaillan, now an independent consultant and member of multiple IT vendors' advisory boards, including Harness. "It would be a huge lift for them to compete with the likes of Harness, Weaveworks and GitLab."

Chaillan said he was invited to join the CloudBees Customer Advisory Board as well but declined. "I didn't see them as willing to listen and change," he said.

Kapur said the "technical debt" critique sounded familiar to him.

I come from companies that were all at least 25 years old, and the most natural argument against [them from] companies that are less than five years old is that tech debt is effectively going to overwhelm you.
Anuj KapurPresident and CEO, CloudBees

"I come from companies that were all at least 25 years old, and the most natural argument against [them from] companies that are less than five years old is that tech debt is effectively going to overwhelm you," he said. "If that was the case, no company would get beyond five years of operations and beyond $100 million in ARR."

CloudBees' target audience of large enterprises must contend with legacy applications and technical debt of its own, which is where Kapur sees plenty of opportunity for CloudBees to apply its deep understanding of the legacy burden to help with modernizing IT operations.

"I was the executive sponsor for a major bank at Cisco, and they said, '100% of our revenues flow through 4,000 applications, and if you asked what percentage of those applications are containerized, truly cloud-native, truly multi-tenant across multiple cloud environments, our guess would be 5%,'" Kapur said.

"Maturity varies vastly across verticals, across companies within those verticals, and especially across geographies," he added. "So I tend not to get over-indexed on the message coming out of the best or hottest, most richly funded startups in the cloud-native space."

CloudBees looks to lead enterprises out of legacy mire

This approach does resonate for some organizations, such as the Department of Defense, where Jenkins is already a familiar tool.

"We have customers within the Department of the Navy we support that use open source Jenkins and are looking at other products as well," said Rob Slaughter, CEO of defense contractor Defense Unicorns.

These products include GitHub, GitLab and Harness, in addition to CloudBees, but Slaughter echoed Kapur's point about the increasing criticality of software delivery via CI/CD tools. This will mean organizations that previously only experimented with open source will now be in the market for enterprise support, he said.

"More and more organizations that have been accustomed to using open source Jenkins are starting to look for supported alternatives," Slaughter said.

However, CloudBees also isn't alone in its pledge to meet established enterprise companies where they are -- on premises, with legacy apps and infrastructure to contend with -- and usher them into the cloud-native era. That's been IBM/Red Hat's specialty for years, and a key part of VMware's strategy. Other established IT vendors that previously focused on areas outside CI/CD pipelines are beginning to add support for them, such as ServiceNow. The early movers of the Agile/DevOps era that began with on-premises software, such as Atlassian and HashiCorp, are also increasingly focused on delivering cloud-based services.

A critical time for software, and CloudBees execution

As enterprise software delivery practices mature and vendor competition increases, some vendor attrition has already come along with market growth. Early winners in IT automation, such as Puppet and Chef, have been acquired in the last two years following multiple strategy and executive changes not dissimilar to CloudBees'.

Too much change at the top can be cause for concern, analysts warned.

"Executive change at a rapid pace is never good in a rapidly changing space like DevOps," said Larry Carvalho, an independent analyst at RobustCloud. "The success of other companies may be a reflection of consistent execution without turnover at senior levels."

Still, CloudBees is well-funded, with an established customer base, and Jenkins still has good name recognition among enterprises just starting to explore DevOps and digital transformation, said Jim Mercer, an analyst at IDC.

"The blessing of Jenkins is that you have customers already, but the curse is that some people perceive you as a legacy vendor, and you kind of have to prove them wrong," he said. "At the end of the day, [executive changes like this] could be just a blip on the path, but they have to deliver -- they can't afford to wait."

Challenge accepted, according to Kapur.

"The level of excitement that I sense in the company is greater than I think the market gives us credit for, and that's OK," he said. "I would rather be underestimated than be overestimated."

Beth Pariseau, senior news writer at TechTarget, is an award-winning veteran of IT journalism. She can be reached at [email protected] or on Twitter @PariseauTT.

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