HashiCorp: From Open-Source To Enterprise

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That's very helpful to start off with. To dive a little bit deeper into some of these things, the first one is the open-source dynamic. HashiCorp is unique in that its biggest competitors are all open-source. How difficult was it to sell HashiCorp against its open-source products? Could you compare that across your experience? I'm pretty familiar with Auth0 and Cribl, but how hard is it to sell HashiCorp?

The easiest way to explain it is this: Most people have never worked for an open source company, let alone two. In my case, open source is a double edged sword. Compared to others, it's a great modern distribution model to get your technology injected to varying degrees or found by technologists. It's almost like being, more times than not, a child at Disneyland. You must be this tall to ride this ride. I would argue the organizations who can extract value from the enterprise offerings over the open source have a certain degree of scale and complexity in their IT estate, or operations, but necessitate some of those features and functionality for various reasons. Then it becomes, do you want to peel off some engineers to build scaffolding on top of the open source to mimic the enterprise functionality that most large enterprises need? Or do you want to just accelerate your timeframes and trust the OEM and exchange dollars for those capabilities?

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I see. I'll note that and return to it later. But going back to the open source and enterprise topic, what was the ideal customer profile you were looking for? What indicated to you that this would be a great enterprise play or a great enterprise customer?

The simplest way I can explain it from my experience is scale and complexity. Scale meaning if you need to provision a VM infrequently. For instance, you're a local utility serving a small part of the state that hasn't really adopted the public cloud or containers, and you have some very pro-VMware technologist in your organization. That's not a great fit. But if you go into an organization that makes money on custom apps that are public-facing, like Uber or Roblox, these companies have dynamic, large cloud and container estates that align well with the problems HashiCorp products solve. On the other hand, let's say Uber, Robinhood, and Roblox are not the best examples, then you look at the complexity dynamic, which to me is governance and compliance requirements on how you run your IT organization. For example, FedRAMP certification for a SaaS provider. Some organizations have strict rules, although they are pretty rare these days, like you cannot run open source software in production because we're a bank without a commercial relationship with the vendor. There's too much at stake. So it's about finding the organizations where some Zero Trust or HIPAA or FedRAMP or whatever it is aligns to a way that you must operate your IT operations. Those flowed very nicely into HashiCorp products and capabilities that were just not available in open source.

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That's interesting. If we take a cross-section of, say, 100 of these cloud-native customers, like the Ubers of the world, over time, will HashiCorp be able to serve all of them? Or will only about ten of them become HashiCorp customers in the next ten years? What's your instinct on that?

The beauty of HashiCorp is that if you hit a wall with Terraform, you can have a conversation around Vault. If you hit a wall with Vault, you can talk about Consul. If you hit a wall with Consul, you can maybe swing back to emerging offerings like the privileged access management solution, Boundary. There are many avenues to monetize an account when you have a multi-product portfolio.

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