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Software Company HashiCorp Is Weighing a Potential Sale

pizzafeelsright 3y ago
After their disastrous license change and the reasons for it I figure their biggest Exit Plan would include being acquired. I made a couple of Option calls based on this. Monday could be good.
- x86x87 3y ago
  Imho, the license change didn't cause this. It was an attempt to make money. At that point they were already in trouble.
  - fishnchips 3y ago
    You'd be hard pressed to see this trouble in their quarterly reports.
    - x86x87 3y ago
      Did they ever turn a profit?
      - fishnchips 3y ago
        Not sure this is so relevant. Uber only reported profit in 2023, it took 9 years for Amazon to do so. In a sense, it’s a choice.
        x86x87 3y ago
        Yeah. It's not the same thing by far. Amazoj deliberately chose to pour all income into expanding. On paper they did not have profit but they could at any point turn a profit by halting the expansion.
- a_vanderbilt 3y ago
  Funny how the sequence of events was reversed compared to Redhat, yet the result is the same. A community is building around fork(s) they are losing control of, and they gained nearly nothing from the self-destruction.
  - pizzafeelsright 3y ago
    I think transparent, fixed, and reasonable pricing would have avoided all this. Charging per resource? Paying per json file? Per secret or managed instance? That's silly. Terraform Cloud could be $25 per user per month while remaining profitable but that's just a guess.
- sciencesama 3y ago
  Can you tell what is a good option call to make based on this !!
  - pizzafeelsright 3y ago
    Buy low. Sell high
- nodesocket 3y ago
  We shall see, my average cost is still down over 30% even with the after hours move up (facepalm). Hope to at least get back to even with an acquisition.
  - kgdiem 3y ago
    I’m down 40%. Is it typical to purchase that far above the current price?
    - nodesocket 3y ago
      Just depends. I think when I owned Slack for example shareholders got somewhere around a 50% premium on acquisition.
agomez314 3y ago
anyone have an archive link?
- mootpt 3y ago
  https://archive.ph/2024.03.15-214839/https://www.bloomberg.com/news/articles/2024-03-15/software-company-hashicorp-is-said-to-weigh-potential-sale https://archive.ph/2024.03.15-214839/https://www.bloomberg.c...
colesantiago 3y ago
This marks the beginning of the end of developer tools as a VC business play.
- nextworddev 3y ago
  It’s simply impossible to make money selling to developers (in almost all scenarios)
  - thecleaner 3y ago
    Is Stripe a Dev tool ? What about all of AWS ? I guess the statement should be its impossible to make money selling replicable IP
    - everfrustrated 3y ago
      I would say Stripe is a business operations tool. If I fired all my developers I still pay stripe to keep my business open. Devtools are about developer efficiency etc.
  - booi 3y ago
    I dunno we pay thousands of dollars to GitHub just for copilot…
    - anacrolix 3y ago
      GitHub is Facebook for tech companies. It has the network effect, like a social media app.
      - 20after4 3y ago
        Yeah, github IS a social media app.
  - fgonzag 3y ago
    Jetbrains seems to do OK. I pay for my subscription out of pocket.
everfrustrated 3y ago
Devtools is a hard sell but not impossible. Unfortunately Hashicorp didn't even try. The reason selling devtools is hard is there's generally no established budget to sell into. I already have budget for various things - a vendor comes to me and tries to sell their product/tool/saas I'm looking what I can move around to afford it. If yours does a better job of something I'm already paying for, then it's the easiest sell of them all. Eg why most companies have moved off of Pagerduty. If the tool is small enough $/user I can probably afford it without too much trouble or approval - budgets have some padding and there's always some wiggle room, something to deprecate etc. Unfortunately, Hashicorp like some other devtools companies was too proud and only wanted to sell Terraform to large Enterprise ($100k/yr). I'd have been happy to give them $/dev/mth but that was never an option. GitLab is similar. Their pricing is either free or insane with little middle ground. I pleaded with a sales rep - I'm happy to stay on the free features but give you some money for "support" but they wouldn't take my money. Utter madness of a business model to turn down money. To justify Terraform Enterprise ($100k/yr) I would need to get new budget. This could take a year. I need to get internal buy-in which takes time but there's no way to show the business the productivity gains until I'm using it. Catch 22. What Hashicorp should have done is a near free version. Get people comfortable with running Terraform on the cloud and out of awful CI pipelines, then upsell features as their customers naturally grow (concurrency/security/training etc). Having had paid customers would have given Hashicorp a mechanism to be able to listen to and get feedback on how their tools were actually being used and the pain points businesses had. Thankfully we now have OpenTofu and the likes of Spacelift et al. What a missed opportunity.
- boris 3y ago
  > Their pricing is either free or insane with little middle ground. I pleaded with a sales rep - I'm happy to stay on the free features but give you some money for "support" but they wouldn't take my money. Utter madness of a business model to turn down money. It makes sense to turn down money if the administrative overhead of taking it will cost more. If I have to spend a couple of months negotiating a license/service agreement with your legal department and then chase your AP people for a couple months more to get my invoice paid, the the couple of $K you are willing to pay are not really worth it. And unfortunately that how things really work.
fakedang 3y ago
Guess who's having the last laugh? Alex. https://mitchellh.com/writing/my-startup-banking-story https://mitchellh.com/writing/my-startup-banking-story
- sgt 3y ago
  But didn't Alex likely get fired and offered a new position at a small town branch in Missouri?
  - fakedang 3y ago
    Last I read, Alex was busy plotting Mitchell's demise, after being jailed for siphoning the funds off the dormant Hashicorp account. https://news.ycombinator.com/item?id=35163055 https://news.ycombinator.com/item?id=35163055
    - philipodonnell 3y ago
      This thread was wild.
saeiiid68 3y ago
[dead]
jgalt212 3y ago
The tough sell for me is why would I want a product that makes it easier for me to manage and add even more overpriced cloud services. I have similar feelings on kubernetes. Without kubernetes, we have a strong incentive to keep the number of machines low (like Stack Overflow). I want to pay for something that makes my life easier and cheaper.
mdaniel 3y ago
on the off chance one hasn't been tracking it, there were several "we don't need your stinking BuSL" projects when this drama first started: https://github.com/opentofu#why-opentofu https://github.com/opentofu#why-opentofu (Terraform) https://github.com/openbao/openbao#readme https://github.com/openbao/openbao#readme (Vault) and I know of several attempts at Vagrant <https://github.com/hashicorp/vagrant/forks https://github.com/hashicorp/vagrant/forks> but I don't believe one of them has caught traction yet There are also some who have talked about an "open Nomad" but since I don't play in that space I can't speak to it

After their disastrous license change and the reasons for it I figure their biggest Exit Plan would include being acquired. I made a couple of Option calls based on this. Monday could be good.

x86x87 3y ago
Imho, the license change didn't cause this. It was an attempt to make money. At that point they were already in trouble.
- fishnchips 3y ago
  You'd be hard pressed to see this trouble in their quarterly reports.
  - x86x87 3y ago
    Did they ever turn a profit?
    - fishnchips 3y ago
      Not sure this is so relevant. Uber only reported profit in 2023, it took 9 years for Amazon to do so. In a sense, it’s a choice.
      - x86x87 3y ago
        Yeah. It's not the same thing by far. Amazoj deliberately chose to pour all income into expanding. On paper they did not have profit but they could at any point turn a profit by halting the expansion.
a_vanderbilt 3y ago
Funny how the sequence of events was reversed compared to Redhat, yet the result is the same. A community is building around fork(s) they are losing control of, and they gained nearly nothing from the self-destruction.
- pizzafeelsright 3y ago
  I think transparent, fixed, and reasonable pricing would have avoided all this. Charging per resource? Paying per json file? Per secret or managed instance? That's silly. Terraform Cloud could be $25 per user per month while remaining profitable but that's just a guess.
sciencesama 3y ago
Can you tell what is a good option call to make based on this !!
- pizzafeelsright 3y ago
  Buy low. Sell high
nodesocket 3y ago
We shall see, my average cost is still down over 30% even with the after hours move up (facepalm). Hope to at least get back to even with an acquisition.
- kgdiem 3y ago
  I’m down 40%. Is it typical to purchase that far above the current price?
  - nodesocket 3y ago
    Just depends. I think when I owned Slack for example shareholders got somewhere around a 50% premium on acquisition.

agomez314 3y ago

anyone have an archive link?

mootpt 3y ago
https://archive.ph/2024.03.15-214839/https://www.bloomberg.com/news/articles/2024-03-15/software-company-hashicorp-is-said-to-weigh-potential-sale https://archive.ph/2024.03.15-214839/https://www.bloomberg.c...

colesantiago 3y ago

This marks the beginning of the end of developer tools as a VC business play.

nextworddev 3y ago
It’s simply impossible to make money selling to developers (in almost all scenarios)
- thecleaner 3y ago
  Is Stripe a Dev tool ? What about all of AWS ? I guess the statement should be its impossible to make money selling replicable IP
  - everfrustrated 3y ago
    I would say Stripe is a business operations tool. If I fired all my developers I still pay stripe to keep my business open. Devtools are about developer efficiency etc.
- booi 3y ago
  I dunno we pay thousands of dollars to GitHub just for copilot…
  - anacrolix 3y ago
    GitHub is Facebook for tech companies. It has the network effect, like a social media app.
    - 20after4 3y ago
      Yeah, github IS a social media app.
- fgonzag 3y ago
  Jetbrains seems to do OK. I pay for my subscription out of pocket.

everfrustrated 3y ago

Devtools is a hard sell but not impossible. Unfortunately Hashicorp didn't even try. The reason selling devtools is hard is there's generally no established budget to sell into. I already have budget for various things - a vendor comes to me and tries to sell their product/tool/saas I'm looking what I can move around to afford it. If yours does a better job of something I'm already paying for, then it's the easiest sell of them all. Eg why most companies have moved off of Pagerduty. If the tool is small enough $/user I can probably afford it without too much trouble or approval - budgets have some padding and there's always some wiggle room, something to deprecate etc. Unfortunately, Hashicorp like some other devtools companies was too proud and only wanted to sell Terraform to large Enterprise ($100k/yr). I'd have been happy to give them $/dev/mth but that was never an option. GitLab is similar. Their pricing is either free or insane with little middle ground. I pleaded with a sales rep - I'm happy to stay on the free features but give you some money for "support" but they wouldn't take my money. Utter madness of a business model to turn down money. To justify Terraform Enterprise ($100k/yr) I would need to get new budget. This could take a year. I need to get internal buy-in which takes time but there's no way to show the business the productivity gains until I'm using it. Catch 22. What Hashicorp should have done is a near free version. Get people comfortable with running Terraform on the cloud and out of awful CI pipelines, then upsell features as their customers naturally grow (concurrency/security/training etc). Having had paid customers would have given Hashicorp a mechanism to be able to listen to and get feedback on how their tools were actually being used and the pain points businesses had. Thankfully we now have OpenTofu and the likes of Spacelift et al. What a missed opportunity.

boris 3y ago
> Their pricing is either free or insane with little middle ground. I pleaded with a sales rep - I'm happy to stay on the free features but give you some money for "support" but they wouldn't take my money. Utter madness of a business model to turn down money. It makes sense to turn down money if the administrative overhead of taking it will cost more. If I have to spend a couple of months negotiating a license/service agreement with your legal department and then chase your AP people for a couple months more to get my invoice paid, the the couple of $K you are willing to pay are not really worth it. And unfortunately that how things really work.

fakedang 3y ago

Guess who's having the last laugh? Alex. https://mitchellh.com/writing/my-startup-banking-story https://mitchellh.com/writing/my-startup-banking-story

sgt 3y ago
But didn't Alex likely get fired and offered a new position at a small town branch in Missouri?
- fakedang 3y ago
  Last I read, Alex was busy plotting Mitchell's demise, after being jailed for siphoning the funds off the dormant Hashicorp account. https://news.ycombinator.com/item?id=35163055 https://news.ycombinator.com/item?id=35163055
  - philipodonnell 3y ago
    This thread was wild.

saeiiid68 3y ago

[dead]

jgalt212 3y ago

The tough sell for me is why would I want a product that makes it easier for me to manage and add even more overpriced cloud services. I have similar feelings on kubernetes. Without kubernetes, we have a strong incentive to keep the number of machines low (like Stack Overflow). I want to pay for something that makes my life easier and cheaper.

mdaniel 3y ago

on the off chance one hasn't been tracking it, there were several "we don't need your stinking BuSL" projects when this drama first started: https://github.com/opentofu#why-opentofu https://github.com/opentofu#why-opentofu (Terraform) https://github.com/openbao/openbao#readme https://github.com/openbao/openbao#readme (Vault) and I know of several attempts at Vagrant <https://github.com/hashicorp/vagrant/forks https://github.com/hashicorp/vagrant/forks> but I don't believe one of them has caught traction yet There are also some who have talked about an "open Nomad" but since I don't play in that space I can't speak to it