Dear Members of the Chef Community,
Now that the buzz from closing out 2018 and Chef Rally (our annual all company kick-off) has died down, I wanted to share a quick update on Chef, along with a glimpse into the amazing opportunity that lies ahead for the company and our community.
First of all, 2018. The year was one of change for Chef and our community as some old friends moved on and other bright stars joined. It was also a year of records for the company. Not only was 2018 our best in recurring revenue, but we also finished it with an amazing second half of the year. And the quarter we just finished, our Q4, was far and away a record growth quarter for Chef in nearly every way you can measure. Our business is performing well and generating significant amounts of cash which is unique for a growth-stage company. In 2019, this enables us to further increase our investment in product velocity while continuing to better serve our customers and community.
For me, 2018 also represents Chef solidly moving into the third chapter. Our first chapter ran from our founding until the end of 2016 and was characterized by massive OSS adoption and hyper-growth. Somewhere in here, Chef was at the peak of the conceptual hype-cycle. And while these were heady times, our kit still had some rough edges. Our second chapter was a year-and-a-half period starting at the beginning of 2017 and characterized by a shifting technology landscape (notably containers, k8s, and serverless) with continued revenue growth albeit not at the previous rate. We significantly increased our own R&D investment around new technologies and we built out our Customer Success organization. Our focus had been to work more closely with customers so we could better share our learnings over the years and to help our customers more quickly achieve the business outcomes they sought. Our second chapter was one of transition and while this was an important and necessary stage for Chef to go through, it ended in mid-2018.
Three things will define our next chapter:
- Technical leadership and innovation
- Revenue acceleration
- High performing business model
Beginning in 2016, we began a set of significant investments to broaden, modernize and extend the Chef stack. Our belief is that the modern enterprise automation stack must cross three boundaries: infrastructure, applications, and security. Everything should start with the highest business-impact part of the equation – the application. Our vision is that app teams should be divorced from having to understand the details of various target infrastructure environments. They should only have to worry about the details of their application and not the underlying infrastructure. This can be accomplished by creating an abstraction around the application that not only simplifies the app developers job, but also allows operating teams to choose whatever infrastructure suits them for any application, new or legacy. And the biggest payoff is something that totally bedevils today’s enterprise: having a single, consistent way to build software across their organization. In fact, this is the most significant barrier to today’s enterprise becoming a high-performance software shop. While their large digital competitors are continually perfecting software delivery, the enterprise is mired in challenges and is highly fractured in how they build and deliver all their software (infrastructure and application). This is what we are solving. And let me underscore the importance of security to this vision: security must flip from being an impediment to velocity to an enabler of it. High performing organizations are continually shipping tested and vetted software changes and they can easily react to whatever changes are required to maintain a strong security posture.
In fact this is more than vision: our highest performing enterprise customers like Alaska Airlines are working in exactly this way with our stack. One thing became clear to us last year, the future isn’t Chef or Habitat, it is Chef and Habitat operating in a tightly integrated fashion across the application and infrastructure domains. This pattern is the backbone of our third chapter. It is also driving our revenue acceleration: in our fourth quarter over a half of our large deals involved the combination of Chef, Chef Inspec, and Chef Habitat.
Lastly, I want publicly acknowledge and thank Adam Jacob for his friendship, leadership and counsel during my time at Chef. Adam is the author of both Chef and Habitat; it is impossible to overstate his impact on our company and community. As many have known, with the hiring of Corey Scobie early last year, Adam shifted his leadership at Chef from an operating role to a full-time board and advisory role. We discussed this with Geekwire in December and I meant what I said: “If there was a list of five or ten people that literally have changed the way IT works and set the foundation of the modern industry, Adam is one of them.”
Thanks again to all of you for your input, your support, your guidance and your trust as we work even more closely to make 2019 our best year yet.
Barry Crist, CEO
