I sent an internal note to all of Acquia's 700+ employees today and decided to cross-post it to my blog because it contains a valuable lesson for any startup. One of my personal challenges — both as an Open Source evangelist/leader and entrepreneur — has been to learn to be comfortable with not being understood. Lots of people didn't believe in Open Source in Drupal's early days (and some still don't). Many people didn't believe Acquia could succeed (and some still don't). Something is radically different in software today, and the world is finally understanding and validating that some big shifts are happening. In many cases, an idea takes years to gain general acceptance. Such is the story of Drupal and Acquia. Along the way it can be difficult to deal with the naysayers and rejections. If you ever have an idea that is not understood, I want you to think of my story.
This week, Acquia got a nice mention on Techcrunch in an article written by Jake Flomenberg, a partner at Accel Partners. For those of you who don't know Accel Partners, they are one of the most prominent venture capital investors and were early investors in companies like Facebook, Dropbox, Slack, Etsy, Atlassian, Lynda.com, Kayak and more.
The article, called "The next wave in software is open adoption software", talks about how the enterprise IT stack is being redrawn atop powerful Open Source projects like MongoDB, Hadoop, Drupal and more. Included in the article is a graph that shows Acquia's place in the latest wave of change to transform the technology landscape, a place showing our opportunity is bigger than anything before as the software industry migrated from mainframes to client-server, then SaaS/PaaS and now - to what Flomenberg dubs, the age of Open Adoption Software.
It's a great article, but it isn't new to any of us per se – we have been promoting this vision since our start nine years ago and we have seen over and over again how Open Source is becoming the dominant model for how enterprises build and deliver IT. We have also shown that we are building a successful technology company using Open Source.
Why then do I feel compelled to share this article, you ask? The article marks a small but important milestone for Acquia.
We started Acquia to build a new kind of company with a new kind of business model, a new innovation model, all optimized for a new world. A world where businesses are moving most applications into the cloud, where a lot of software is becoming Open Source, where IT infrastructure is becoming a metered utility, and where data-driven services make or break business results.
We've been steadily executing on this vision; it is why we invest in Open Source (e.g. Drupal), cloud infrastructure (e.g. Acquia Cloud and Site Factory), and data-centric business tools (e.g. Acquia Lift).
In my 15+ years as an Open Source evangelist, I've argued with thousands of people who didn't believe in Open Source. In my 8+ years as an entrepreneur, I've talked to thousands of business people and dozens of investors who didn't understand or believe in Acquia's vision. Throughout the years, Tom and I have presented Acquia's vision to many investors – some have bought in and some, like Accel, have not (for various reasons). I see more and more major corporations and venture capital firms coming around to Open Source business models every day. This trend is promising for new Open Source companies; I'm proud that Acquia has been a part of clearing their path to being understood.
When former skeptics become believers, you know you are finally being understood. The Techcrunch article is a small but important milestone because it signifies that Acquia is finally starting to be understood more widely. As flattering as the Techcrunch article is, true validation doesn't come in the form of an article written by a prominent venture capitalist; it comes day-in and day-out by our continued focus and passion to grow Drupal and Acquia bit by bit, one successful customer at a time.
Building a new kind of company like we are doing with Acquia is the harder, less-traveled path, but we always believed it would be the best path for our customers, our communities, and ultimately, our world. Success starts with building a great team that not only understands what we do, but truly believes in what we do and remains undeterred in its execution. Together, we can build this new kind of company.
Founder and Project Lead, Drupal
Co-founder and Chief Technology Officer, Acquia
Last week, Acquia's executive team prepared breakfast for the 300 or so employees in our Boston office. It was a lot of fun. A tradition that we started a few years ago to thank everyone for their efforts.
Contributed modules in Drupal deliver the functionality and innovation proprietary content management solutions simply can't match. With every new version of Drupal comes the need to quickly move modules forward from the previous version. For users of Drupal, it's crucial to know they can depend on the availability of modules when considering a new Drupal 8 project or migrating from a previous version.
I'm pleased that many agencies and customers who use Drupal are donating time and attention to maintaining Drupal's module repository and ensuring their contributed modules are upgraded. I believe it's the responsibility of Drupal companies to give back to the community.
I'm proud that Acquia leads by example. It was with great pride that Acquia created a Drupal 8 Module Acceleration Program, or MAP. Led by Acquia's John Kennedy, MAP brings financial, technical and project management assistance to Drupal module maintainers. Acquia kicked off MAP in mid-October and to date we have helped complete production-ready versions of 34 modules. And it is not just any modules; we've been focused on those modules that provide critical pieces of functionality used by most Drupal sites.
When MAP was formed Acquia allocated $500,000 to fund non-Acquia maintainers in the community. In addition, we have so far invested more than 2,500 hours of our own developers' time to support the effort (the equivalent of three full-time developers).
What is impressive to me about MAP is both the focus on mission-critical modules that benefit a huge number of users, as well as the number of community members and agencies involved. John's team is leading a coalition of the best and brightest minds in the Drupal community to address the single biggest obstacle holding Drupal 8 adoption back.
Drupal 8 has already made a significant impact; in the 90 days following the release of Drupal 8.0.0, adoption has outpaced Drupal 7 by more than 200 percent. And as more modules get ported, I expect Drupal 8 adoption to accelerate even more.
This week's Grammy Awards is one of the best examples of the high traffic events websites that Acquia is so well known for. This marks the fourth time we hosted the Grammys' website. We saw close to 5 million unique visitors requesting nearly 20 million pages on the day of the awards and the day after. From television's Emmys to Superbowl advertisers' sites, Acquia has earned its reputation for keeping their Drupal sites humming during the most crushing peaks of traffic.
These "super spikes" aren't always fun. For the developers building these sites to the producers updating each site during the event, nothing compares to the sinking feeling when a site fails when it is needed the most. During the recent Superbowl, one half-time performer lost her website (not on Drupal), giving fans the dreaded 503 Service Unavailable error message. According to CMSWire: "Her website was down well past midnight for those who wanted to try and score tickets for her tour, announced just after her halftime show performance". Yet for Bruno Mars' fans, his Acquia-based Drupal site kept rolling even as millions flooded his site during the half-time performance.
For the Grammys, we can plan ahead and expand their infrastructure prior to the event. This is easy thanks to Acquia Cloud's elastic platform capacity. Our technical account managers and support teams work with the producers at the Grammys to make sure the right infrastructure and configuration is in place. Specifically, we simulate award night traffic as best we can, and use load testing to prepare the infrastructure accordingly. If needed, we add additional server capacity during the event itself. Just prior to the event, Acquia takes a 360 degree look at the site to ensure that all of the stakeholders are aligned, whether internal to Acquia or external at a partner. We have technical staff on site during the event, and remote teams that provide around the clock coverage before and after the event.
Few people know what goes on behind the scenes during these super spikes, but the biggest source of pride is that our work is often invisible; our job well done means that our customer's best day, didn't turn into their worst day.
As many of my loyal blog readers know, I sit down to write a retrospective at the end of each year. It's helpful from the perspective of seeing how far Acquia has come in a single year, but it should also give you a glimpse of what is in store for Acquia in 2016 and beyond. If you find it interesting to take a look back at previous retrospectives, here they are: 2014, 2013, 2012, 2011, 2010 and 2009. These posts provide a pretty detailed overview of Acquia's trajectory as a company.
Since Acquia started eight years ago, we've believed that open source offers significant advantages over proprietary software because of its faster innovation, higher quality, freedom from vendor lock-in, greater security, and lower total cost of ownership. Early in our life as a company, we made a big bet that open source combined with the cloud, offered through a subscription model rather than perpetual license, would be a very compelling solution for the market. Few people believed us at the time, but now it is clear that our early vision is starting to pay off; perpetual software licenses are on the decline and Deutsche Bank analyst Karl Keirstead recently called cloud and open source the two leading themes in Silicon Valley.
The market demand for Acquia's digital business platform continues to grow; three of the top analyst firms, IDC, Gartner and Forrester have all named digital business transformation a top strategic imperative for the C-suite in 2016 and beyond. Open source, cloud computing, big data, the Internet of Things (IoT), and artificial intelligence are all catalysts for the expansion of digital transformation into all corners of the organization.
Organizations are rapidly expanding the range of digital interactions with their customers and partners, moving Drupal and Acquia to the core of their business. There is a growing focus on personalization and data-driven automation, which bodes well for products like Acquia Lift. In general, I believe that the growing reliance on digital provides Drupal and Acquia with a multi-decade opportunity.
Within the last 12 months, some of the largest technology companies including Apple, Google, Microsoft and Facebook have open-sourced key components of their business. There are many motivations for this shift. According to Apple, the company open-sourced its Swift programming language to extend it to new platforms. Google open-sourced TensorFlow, its artificial intelligence platform to make an even bigger impact outside Google, even though the company employs 2,000 engineers working on artificial intelligence alone. Microsoft open-sourced .NET to increase its relevance with developers and play nicely with other operating systems. In Deutsche Bank's 2016 predictions, Keirstead says "open source keeps eating the world", causing major price deflation for the traditional enterprise software industry. Whether the motive is faster innovation or increased adoption, companies are relying less and less on proprietary software and embracing open source.
Amazon SVP of Web Services, Andy Jassy, explained in his 2015 AWS re:Invent presentation that websites have been a "critical gateway" to AWS' wider cloud adoption in the enterprise. His rationale: nearly every organization has one or more websites, and many aren't considered "mission-critical applications". Therefore, most organizations feel comfortable moving some or all of their websites to the cloud. Websites are an important stepping stone for organizations to build up the knowledge and confidence to migrate their entire businesses to the cloud.
As cloud adoption grows, we're seeing our customers use a mixture of SaaS, PaaS and IaaS. In particular the Platform-as-a-Service (PaaS) model continues to grow fast, which is great news for Acquia Cloud. A growing number of enterprises are choosing PaaS ahead of Infrastructure-as-a-Service (IaaS) to save time and money on building, scaling and maintaining infrastructure so they can focus on building websites. Gartner sizes the PaaS market at $4.1B in 2015, attaining a compound annual growth rate (CAGR) of 65%+ through 2018. We are a few years ahead of our competitors (Adobe, Sitecore, IBM, Oracle) when it comes to PaaS, and I don't see that changing in 2016.
The migration to the cloud is only getting started. When I met with Eric Schmidt this year, he told me that he believes Google's cloud business could outpace its advertising business in five years. To put that in context, Google made more than $65 billion in advertising in 2015, roughly 90% of its total revenue. I don't think Google Cloud can possibly grow that fast, but directionally it's an eye-opening goal. Amazon's cloud business, bigger than its four closest competitors combined (including Google's cloud business), generated roughly $7 billion in revenues in 2015 and is expected to grow 80% year-over-year. Needless to say, it is exciting for Acquia be a "critical gateway" in such a massive movement to the cloud.
As the web evolves, the idea of a "digital business" takes on an entirely new meaning. I've said this before but digital is not just about building websites anymore; many of our customers are using digital to change the way their business operates, automate manual processes, and save millions of dollars in the process. Digital strategies are no longer confined to the marketing department; they're quickly becoming a boardroom priority.
Digital experiences are also getting more sophisticated. What used to be as simple as building a website now involves getting the right information, to the right user, at the right time, in the right context -- an idea I call B2One and talked about as part of my Big Reverse of the Web thesis. It's all about understanding the user's context and preferences to deliver the best next experience. We started investing in this area in late 2013, acquired a personalization company in 2014, and expect this trend to grow really big, especially as big data, the Internet of Things (IoT) and artificial intelligence mature.
Beyond personalization and contextualization, companies have a greater need for flexibility and freedom to integrate a variety of external services, ranging from commerce to marketing automation solutions. While there are plenty of point solutions on the market that achieve pieces of this puzzle, Acquia and Drupal uniquely provide a platform to do it all.
Acquia continues its growth
Acquia's growth is an indicator that businesses are already betting big on open source, cloud, personalization, and digital transformation. Looking at our numbers for 2015, it is hard to believe that last year was only our seventh full year as a revenue-generating business. Our new logo subscriptions -- the business that we get from companies new to Acquia -- continued its fast growth, while our renewal rates are among the best around.
To support our growth, we added $55 million in new venture capital funding in 2015, bringing Acquia's total raised to $188.6 million.
We dramatically increased headcount last year. In May, we moved into a beautiful new corporate headquarters in Boston, where we hosted a launch party with mayor Martin J. Walsh that established us as an anchor growth company for the city. Globally, we added 150 more employees in 2015, bringing us to 720 people. The executive team changed substantially in 2015, with the addition of Al Nugent as CISO, Preston Bradford as COO, Heather Hartford as Chief People Officer, and most recently Loren Jarrett as CMO. We also announced the appointment of Christine Komola, CFO of Staples, to Acquia's board of directors. We expanded European operations with the opening of a new office in Munich. Acquia now operates out of 10 global offices on three continents!
We made key investments in talent for our partner team, grew the number of Drupal certifications achieved globally, and strengthened our relationship with agency partners. We were proud to announce our WPP Global Alliance partnership this year, which brings Acquia closer to the organizations building the world's most amazing digital experiences.
Top industry analysts continued to recognize Acquia as a leading provider of digital experience software and services. In October 2015, we were named a "Strong Performer" in The Forrester Wave: Digital Experience Platforms Q4 2015. In August, Gartner named us a "Leader" in the 2015 Magic Quadrant for Web Content Management. This type of external validation supports Acquia as a viable alternative to proprietary solutions provided by companies like Adobe, IBM, Sitecore or Oracle.
Acquia Cloud continues to enable organizations to run their websites securely and reliably, while providing them with the tools to accelerate web development and shorten time to market. We manage over 13,000 AWS instances (virtual servers) powering approximately 197,000 websites. In December 2015, Acquia Cloud served 10.8 billion Apache hits and 6.2 billion Drupal bootstraps (requests handled by Drupal instead of one of different caching layers or the web server directly), with billions more served from our caching layers and Acquia Cloud Edge.
Last year, we launched Acquia Cloud support for the São Paulo, Brazil and Frankfurt, Germany regions. With our German expansion we became the first Drupal PaaS to offer pan-European high availability to accommodate EU data sovereignty requirements.
With the launch of Drupal 8 in late 2015, the Drupal community achieved our most significant release in the history of the platform. We implemented a more modern development framework, reimagined the usability and authoring experience, and made improvements that will help everyone build the multilingual, mobile and highly personalized digital experiences of the future. From how we model content and get content in and out the system, to how we assemble experiences on various devices, to how we scale that to millions of pageviews — it all got much better with Drupal 8.
Now that Drupal 8 is released, I'm convinced that it will attract new developers and site-builders to the platform. Nonetheless, the wait for Drupal 8 has been long and painful, temporarily slowing down much of the commercial Drupal ecosystem. Despite some turbulence, I'm proud that the Acquia team was a force in helping to push Drupal 8 over the finish line.
Acquia employs more than 150 Drupal experts, and has fixed upwards of 1,200 issues in Drupal 8. I reassigned our Drupal team from feature development (i.e. Spark) to working on criticals. This team was a major force in bringing the total number of criticals down from a high of 90 at the beginning of the year to zero in early October, through development, performance work, patch reviews, sprint coordination, and in helping to manage the Drupal 8 Accelerate program. To help jumpstart faster Drupal 8 adoption, Acquia is investing significantly in porting the top 50+ contributed modules. We have always believed in giving back more as a core part of our company's DNA. Our entire team is ready to enable and support companies working with Drupal 8.
Last year was an exciting one when it came to new products. We announced Content Hub, a cloud-based content distribution and discovery service. As more of our customers scale with Acquia across hundreds of sites, Content Hub lets authors and site owners reuse content from internal and external sites. And we added a critical commerce integration through a partnership with Hybris, which provides even more options for enterprises to drive commerce experiences.
We announced a variety of important security and compliance milestones that will be crucial to protecting our customers. First, we introduced Acquia Cloud Edge, a new DDoS security product developed in partnership with CloudFlare to keep our customers safer from external threats. Soon after, Acquia achieved HIPAA compliance upon passing an independent audit of Acquia Cloud Site Factory and Acquia Cloud. HIPAA compliance is significant because of Acquia's roster of healthcare customers, who require certain safeguards for data security and look to scale Acquia Cloud across their portfolio of sites.
In addition to this compliance milestone, our spam-blocking software, Mollom, has blocked over 10 billion spam comments.
Acquia Lift customers challenged some of our original assumptions about personalization. We worked to improve our Acquia Lift personalization product with the help of our customers, creating a new workflow and UX that supported more flexibility and freedom depending on the individual organization. In 2015, we learned a lot about the challenges organizations face when starting out with personalization and doubled down to help our customers become successful. Personalization will continue to be a huge focus of ours in 2016.
This year, we will be rolling out many new products and enhancing existing ones. Acquia Cloud will get a brand-new, responsive, card-based UX in early 2016, and we'll give development teams the ability to create on-demand environments. We will continue to focus on security enhancements from audits like SOC and ISO, as well as key control planes including FedRAMP, Single Sign-On, and much more. Our team was challenged to get the first cloud service running on our new grid architecture by the end of 2015. With a few hours to spare on the 31st, the "Uptime" service is now running on our grid architecture, a major milestone. A continued focus on developer tools, more microservices, personalization and a "jumpstart" Drupal 8 distribution are just some of the technology we will be rolling out in 2016. Overall, you'll see us getting faster, more secure and more efficient, and providing even more options for our customers to create highly personalized digital experiences.
Longer term, I'm very excited about Acquia's opportunity. I believe we've steered the company to be positioned at the right place at the right time. Time will tell, but 2016 promises to be another big year for Acquia.