Infrastructure automation company Pulumi has launched a Business Critical tier in response to customer demand.
The new Business Critical tier sits above the existing Enterprise tier and essentially extends the energy Pulumi will put behind supporting their most demanding customers. It adds 24×7 support to the existing 12×5 support of the Enterprise tier, provides a self-hosting option for those customers that don’t want to use the SaaS version, and adds a bunch of features needed by those operating at greater scale like federated identity, automated on- and off-boarding of employees, and access-control integration with active directory.
Pulumi says they’re seeing enormous pickup from enterprise customers, with 350% year-over-year growth in paying enterprise customers. While Pulumi wouldn’t provide an exact number of customers, they did say they had “several hundreds, creeping into a thousand” paying customers, which is solid growth for a company founded in 2017. 90% of Pulumi’s revenue is recurring subscription revenue, and the team doesn’t expect this to change much with the addition of a professional services organisation. The goal is to assist customers using the product, rather than to turn into a consulting firm.
Pulumi also says about 60% of the people using the open source edition elect to use it with Pulumi’s SaaS, which is a high conversion rate from free to paid.
“It’s really because our open source [version] was designed to work with our SaaS,” said co-founder and CEO Joe Duffy. “It’s sort of like Git and GitHub, right? You can use Git offline if you want, but it’s just hard to use it in a team setting.”
Pulumi has hit the sweet spot of a well designed technology complemented with effective marketing and a marketplace that is ready for what it has to offer. Enterprise infrastructure teams were resistent to automation until quite recently, relatively speaking. We’ve now reached the point in adoption that there are enough infrastructure people comfortable enough with programming and its associated tools to see value in Pulumi. The likes of Chef and Puppet paved the way, and the success of Terraform has, in many ways, prepared the way for Pulumi to succeed.
While Pulumi has an open source version, it hasn’t followed the same go-to-market plan as other open source products. Rather than beginning as an open-source hobby project that gets popular and then tries to convince people to pay for it, Pulumi has had its commercial goals in mind from the beginning. Pulumi isn’t really an open-source product in the traditional sense; it has an open source version as a kind of free trial, but the design of the product inherently leads you to paying for it if you use Pulumi to do anything important.
One particular design choice that I feel deserves special mention is the support for lots of languages. Instead of creating its own domain-specific language, or favouring just one or two main languages, Pulumi chose to support a wider variety of languages that enterprises already use. This reduces barriers to adoption dramatically. It’s simply much easier to adopt a tool that works with what you already have, particularly in enterprises because they invariably have five of everything. This contributes to the easy with which Pulumi is able to convert people to paying customers.
Compatibility and interoperability are hard to do well, which is why many startups don’t choose this path, and it’s to Pulumi’s credit that they’ve been able to pull this off. They also made a bet on the broader idea of hybrid- and multi-cloud (or whatever we’re calling it this week) that looked a riskier bet back in 2017. Recall that AWS for a long time actively resisted the very utterance of the phrase multi-cloud, let alone any active implementations.
In PivotNine’s opinion, the future looks very bright indeed for Pulumi. If someone wanted to buy them they probably should have done so a year or more ago. Pulumi will be much more expensive to acquire now, and they’re about to get even more expensive.