In this special DevOps Chats Video Edition we dive into the XebiaLabs/CollabNet Version One Merger. Joining us for this video discussion is the CEO of the new company, Ashok Reddy and President and former XebiaLabs CEO, Derek Langone.
Ashok, Derek and DevOps.com editor-in-chief, take a deep dive into the reasons for this merger and what it means in the end-to-end DevOps market.
Have a listen for some great background on this merger and what we can expect to see in the market soon. Below is the transcript of the conversation if you would like to read along.
Alan Shimel: Hey, everyone, this is Alan Shimel for DevOps.com, and you’re listening to another one of our—actually, our video DevOps Chat edition. Thanks for joining us.
We have a great DevOps Chat video lined up for today. As many in our audience know and in the DevOps community, last week was a pretty exciting week with continued consolidation in the DevOps space. The big story was a merger, acquisition, private equity—I’ll let them define it, but the joining of XebiaLabs with the CollabNet VersionOne team, financed by a private equity company. And then kinda the surprise cherry on the cake was the addition of a CEO, a pretty well-known name to us in the DevOps community for both his days at IBM, CA/Broadcom, Ashok Reddy, as CEO. And we’re lucky enough to have Ashok Reddy, CEO of the new company. I’m gonna let Ashok handle the name.
And joining Ashok is a friend of ours who needs no introduction in the DevOps space, our friend Derek Langone. Derek is the CEO of XebiaLabs, you know, one of the main companies in this merger, and Derek will be the president of the new entity going forward.
So, Ashok, Derek—welcome to DevOps Chat. Thanks for joining us.
Ashok Reddy: Thank you, Alan. Great to be here. Thanks for inviting us.
Derek Langone: Hi, Alan.
Shimel: Yeah—no, it’s great. Okay. So, guys, let’s jump into this. Ashok, as I said, you need no introduction in the DevOps space. You’ve accomplished, between mainframe and DevOps and IBM and CA, you’re an accomplished executive in this space. What motivated you to come on board here as the CEO of this new entity, and also would you mind—I don’t even know, I’m not sure what to call the new entity. Should I call it Xebia, CollabNet, some Newco? I’m not sure. So, go ahead.
Reddy: Yeah, so start with that. I think we are working on, obviously, we’re doing a branding initiative. We’ll be coming up with a new name shortly.
But as well, Alan, I think in terms of, you know, why did I join this is, it’s really, in the past, if you look at what I personally have done is focused more on transforming existing businesses, very large businesses, whether it’s in the Mainframe or in the large existing portfolios, and I think that was very good in terms of what I did there.
But what I found here with TPG, as a private equity firm, which is very well known for transforming, the investments they make are really transforming industries. As examples, TPG was an investor in Spotify or Uber, an early investor in Airbnb and some other companies like Chobani and others where, they’ve kind of transformed the industry. So, when they had this thesis around DevOps is one of the most important transformational things going on in the industry, and there’s really, it’s not just a consolidation, but really, coming up with a true platform all the way from end to end, from how do you define value to how do you measure value and how do you plan and track and deploy and secure?
To me, it was more of a sort of just transforming existing things to build out a new platform with, starting with some of the best of breed companies, right, technologies. So, to me, that was really what the attractive part is. Plus, you know, we can define—there’s no boundaries in terms of which industries and customers we want to, but really, truly focus outside in from the market perspective, and every company is becoming digital, everybody talks about that, but I don’t think we have a platform which really provides that.
So, I think that’s really why I changed. And also, you know, in terms of the naming, as I said, we are still working on something which is, represents the broader platform we are building and not just the things, what we have today.
Shimel: Fair enough. Derek, I’m gonna ask you a slight—I’m gonna ask you the same kind of subject, but slightly different. Hey, man, you’re CEO, you know, you’re the boss, and now you’re president of the new company which obviously still covers a lot of territory, a lot of responsibility. But, you know, as an organization, why did you feel it was best for Xebia to do this, and then you personally, right? Is this—where do you see, you know, what gets you excited about your role in this new adventure?
Langone: Yeah, so, I’ll try to answer that a couple ways, Alan. First, from a business perspective, why this made sense—I mean, as you followed our progression at XebiaLabs over the years, you know, we’ve established ourselves as a premier vendor to large enterprises and helping them, you know, sort of realize real release orchestration and deployment automation and now reporting on important aspects of the software life cycle.
And we’ve been able to gather meaningful clients, you know, the largest banks, insurance companies, airlines, health insurers use our platform because it’s so scalable and so robust. However, the feedback we got from customers quite often was, “Hey, you know, you really only own a small slice of my life cycle, and what is sort of adjacent to you is a tapestry of individual tools that we’ve woven together, and it would be great if you had a wider footprint.”
So, the opportunity with TPG, looking at the market, and the opportunity at the very, very top of the market in the Global 5000 to create an enterprise scale platform gave us the chance to consolidate with CollabNet VersionOne to put two best of breed technologies together to have much more of a horizontal influence on the software life cycle and the power of those two pieces together really does give you that formula of one plus one equals three or greater. So, that was what was exciting from a business perspective.
For me personally, it’s terrific to be able to have Ashok as a leader in our organization and someone that I can learn from. And you’re absolutely right, I’ve been the CEO, so I’ve sort of been the boss. However, I’ll tell you, it’s an easy transition, for two reasons. Number one, Ashok’s a great leader with an incredible track record and a skill set that I would like to learn from. And then, number two, I haven’t been the boss at home for many years, so it was sort of an easy transition to not being the boss at work.
Shimel: [Laughter] Amen to that, brother. I’m with ya. We won’t tell anyone—no one’s listening, though, don’t worry.
So, we’ve got this new entity now, which represents the assets of CollabNet VersionOne, XebiaLabs kind of put together. Ashok, you mentioned sort of best of breed technologies within their places.
Let’s lay it out for our audience, right? Where are the strengths of this new entity? Where is the best of breed functionality? You know, when we look, I call it the end to end DevOps kinda market, right, the players who are trying to do end to end DevOps. No one has the whole enchilada yet.
But as you sit here today, gentleman, where do you see the strengths? Where are the real assets of this new entity today?
Reddy: Yeah, no, I think it’s—so, let me start with, you know, when you start with the overall, it’s really, the focus is value stream management, for example. Companies who look at how do I measure value; how do I look at agile? From an agile planning perspective, I think there is, VersionOne is best of breed in the sense it was built ground up to be almost like a reference architecture for the same framework. If somebody is adopting the new, say, 5.0, for example, updated where it’s got value streams and how do I drive value streams—it’s actually built for it. All the way from how do I blueprint things to how do I create epics and stories to be able to plan and do the resource planning?
So, that’s one aspect of it, but then the second part is, even with CollabNet, you know, people kind of forget CollabNet started many of this open source movement around Subversion and it’s, 35% of the market today still uses Subversion.
But the Git part, which is where I find not many people know that, but you have Git which is secure Git. Because many times, there is many vectors, the three security vectors in enterprises—if you used distributed Git, you don’t get. And something like CollabNet actually has implemented really strong security protocols and a centralized way of managing, so you can actually manage Git in a centralized way with secure. And the people like Intel, you know, tens of thousands of people use it.
So, you have a system of record in agile planning and resources to the source control and version management in CollabNet and in the TeamForge SCM, which is a part of GitAgile. Then, of course XebiaLabs. I mean, I think, you know, we competed with XebiaLabs in the past, but it’s really in terms of how XebiaLabs was, you know, both from a release automation to release orchestration, because it can do it without actually having scripts and people—scripts break in a transformation. Things change. The technology is platform agnostic. It can run on any cloud, supports on any cloud. And just being end to end, and now they have complete visibility with AI and machine learning.
So, I think those are the three elements which I feel like are the best of breed. And then there are some things which we, you know, obviously, we’ll organically develop and then we’ll acquire other best of breed technologies. But I would say those are the strengths is connecting all the way—it’s not just orchestrating releases, you can now orchestrate business outcomes in a very agile fashion.
Derek, did you want to add anything else?
Langone: Yeah, I think, Ashok, you covered most of it, and you also said something important, which is our goal, to be that software life cycle system of record.
But really, Alan, if you look at these two pieces together, what VersionOne has done for the engineering side of software life cycle, giving you that velocity and that sort of iterative agile approach. We’re trying to apply to the entire software life cycle. So, take those principles and apply them to release orchestration, deployment automation, and collect data along the way to be used for value stream, for compliance reporting, security reporting—things like that.
So, essentially, create this platform that does a couple of things—gives you the ability to increase your velocity, scalability and so forth in your software factory, but the important element to understand about our approach is, even though we’re building an end to end solution, it’s going to be reliant on its integrations with all the best of breed tools that have already been invested in by these big organizations, right? So, I won’t name tools, but they’re very common CI tools, planning tools, provisioning tools, ITSM tools. We have all those integrations built out of the box. So, we leverage all of those investments as part of the process, so we’re not displacing any technology. Quite the contrary—those technologies come along with our process, and it allows them to be a part of the solution of that system of record validation for software life cycle.
Shimel: You know, and I think it’s worth mentioning—many of those tools, Derek, are actually open source projects as well, right? Because open source plays such a big part in this.
You brought up, what both you and Ashok said here brings up kinda two thoughts in my mind. Number one is, no one just wants a collection of disparate tools. We all want things that work together, right? And Xebia actually—truth be told, I’m much more familiar with XebiaLabs than I am with the CollabNet VersionOne suite. Xebia did a great job of integrating with open source tools, right, as well as third party tools.
I wasn’t aware of a XebiaLabs CollabNet VersionOne integration, though. Are there any? What are the plans for them? Let’s hit that first and we’ll go from there. I don’t know if that’s an Ashok or a Derek thing, or maybe it’s too far in the weeds.
Reddy: Yeah, we’ll—I think I’ll just say that, you know, as far as from a VersionOne and CollabNet perspective, I think there has been, I think, as you said, XebiaLabs has done a fantastic job with this periodic table type of things, tools in the DevOps tool chain. So, as part of that, the whole integration on SCM, the Git with CollabNet’s support for the GitAgile, there is already integration.
There are some things in terms of more of API level integrations between VersionOne and a couple of the other things at XebiaLabs, but we are now strengthening that. But Derek, you may have, you know, some things based on what we have done in the past with Xebia and the CollabNet VersionOne that you may want to add other things.
Langone: Yeah. So, Alan, to your question about the integration that exists today between CollabNet VersionOne and XebiaLabs—that’s been a long standing integration. We have several customers in common that have benefited from those technologies together, and frankly, that was one of the validation points when we decided to become part of this merger, that we had already seen customers benefit from these two technologies together and felt like if we did that in a more purposeful way, we could built out a higher degree of value for these customers and benefit ourselves by expanding our functionality on sort of both sides of the balance sheet.
So, I think you’ll see much deeper integration and a lot of our opportunity to build out that value stream thesis by building these bridges to other products, including, you know, these two companies’ products, collecting that data, and then providing that data for these purposeful value stream management reports.
You know, I look at it from a couple of perspectives. The data that we are collecting from all the tools in the process is used to give high degree performance measurement metrics, KPIs, things like that. Some of the unanswered questions that CIOs have been struggling with for years are, “Hey, I’m spending $500 million a year on Devs,” and now, for the first time, they will have that. And then, for really practical reasons, a lot of these customers that we have—big banks, insurance companies, airlines are heavily regulated, so we’re able to give them chain of custody reporting, compliance reporting, security reporting, testing coverage. Things like that, that have largely been unanswered questions for years.
So, I think the power of these two technologies together and that deeper integration will only serve to provide more and more value from the information we collect.
Shimel: Excellent. So, guys, excellent answers from both of you, and I understand what you’re saying. I think one of the—it’s sort of a, you know, this balancing act that we’re seeing, maybe it’s because it’s early in the game for the end to end DevOps provider. Because on one hand, you have to be open—you know, you have to be able to integrate with this whole multitude of tools that have grown up, some open source, some not, within that DevOps end to end software development and delivery life cycle, right?
You know, so that’s out there, and if my hands go off the screen, I apologize. But at the same time, part of the allure, part of the benefit that we would get with an end to end DevOps solution is that, maybe I could use less. I don’t have to have all of these different tools that I have—I have one suite, one platform, right, that gives me a lot of it, right?
And I understand, Derek, you framed it well, and Ashok, I know you’re familiar with it is, there’s this balancing act of, you gotta play nice with everyone. Because all of these companies are using all of these different tools, but at the same time, you know that your end game has to be, “I’m gonna try to give you as much as you can from one provider.” Is that—you know, and it’s a tough balancing act, frankly.
Reddy: Yeah. No, I think, to me, if you look at the DevOps landscape—yes, there are, some of the vendors would say they have built out a single application or whatever. But the reality of it is that, you know, we can actually do the same thing with the type of capabilities from planning to tracking to SCM and, you know, some of the release, and as we buy other companies. We build it out, it’s completely integrated, and we make that work, right?
But the only thing is, it’s, in enterprise Global 5000, many people already are using different things, and it’s, what’s an application in an enterprise? It’s typically a multi-tiered application. Some of it will be, you know, maybe an Android aspects, there will be a mobile app in iOS. So, you have to use Xcode, you have to use Git for something, you have to use Jenkins and you may have to use now, in a multi-cloud, Spinnaker.
So, I don’t think there will be a choice to just use something from one vendor on everything. But even if it did that, we are saying that we can still provide that entire end to end from one vendor, or you actually have an option to replace parts of it because you’re already using something, and things get updated, even open source. You said open source is everywhere, and it’s going to continue to change because of innovation. So, accommodating that, and then, is it compliant, is it secure? That’s a big aspect of it.
And one other thing which I think is important, Alan, is it’s not—you know, from a DevOps and agile perspective, it’s not just about the tooling and the end to end. It’s really about the transformation and the cultural parts of it and coming in with more of agile cultures and others, which is what we do a lot, and customers start with that. You know, people can use all sorts of tools, they deploy a thousand times a day, but that doesn’t get them the business outcomes and how do I transform them to work? To me, that’s another aspect of it which we are to consider. Even if you have one tool, how do you change the culture, how do you get people to change in a constantly changing world?
Shimel: Absolutely. Guys, I’d like to move in a different area, if it’s okay. We’ve spoken about sort of what the market looks like and what the strengths are. You know, we wouldn’t be fair and balanced if we didn’t talk about maybe what the weaknesses are or where. And I don’t mean weaknesses, but where—where do you see places where this new entity can improve from the current lineup? Whether it be building organically or buying, right? You know, it was—at the announcement of the merger, it was made pretty clear that this isn’t gonna be the last acquisition or merger, that there were funds set aside for more acquisition activity. I assume you’ll also be building holistic additions to the platform in the suite.
In what areas can we expect to see additional functionality added here?
Reddy: Yeah, I think it’s a great point. I mean, we—I mean, you start with the life cycle. I mean, obviously, in the front end, you know, we have the whole notion of planning and then how do you actually track things and how do you deploy. But then, you know, the quality is a big aspect of it, right? The whole continuous quality, the continuous testing is something we obviously can integrate today with many of those things, other products and open source technologies. But if you think about from a platform perspective, I do expect, you know, some sort of continuous testing and quality as a key aspect.
The other one is, you know, security. Because I think, especially with applications and the more and more data driven applications, security is a key aspect. And some form of more feedback—we have some feedback loops built into every aspect of our platform, but I do say from a customer experience monitoring perspective, being able to bring in some of the feedback loops is important.
So, Derek, do you have any other thoughts in terms of the various areas we could improve based on some of the customer interactions you’ve been having?
Langone: Yeah, Ashok, I think you hit on the fundamental part to DevOps transformation. So, I think that, you know, we’ve got an eye towards that functionality, and whether we have, you know, sort of an inorganic, acquisitive approach to that or primarily a partnering approach. I think we’ll continue to kinda round out that functionality.
And again, it has to dovetail back with our thesis. We are building a platform for the enterprise that has all of the elements required of enterprises, right? These businesses are heavily regulated, so security is front of mind, quality of what they release out to their customers and consume internally is top of mind, right?
So, again, when we look at how we build out this platform, there’s gonna be a few elements to it, but it will all be towards the approach of giving best of breed functionality and then always staying open, because we are gonna have to work around investments that have been made in the enterprise.
So, we recognize that this is not the end of the story and we’re moving aggressively to round out the story from a product and messaging standpoint, and that’ll be an endeavor that happens in earnest throughout the rest of this calendar year.
Shimel: Fantastic. I’ll just add one thing to that—Ashok, I long for the day that when you say, quality, we mean security. Right? Security has to become synonymous with quality, and then, hopefully, we’ll really start achieving what we need to achieve in security—not just in DevOps, but in IT in general, and in business in general.
Guys, I wanna thank you. We’ve only got a few more minutes, here. I wanted to just kinda bring us towards our end goal line with this thought and get both of your opinions on it. You know, you’re talking to the DevOps.com community. It’s probably the largest singular focused community on DevOps in the world today, worldwide, right? It’s a worldwide community. I want you to look in the camera and talk to the audience. As DevOps practitioners, why should they care? Why is this new entity important to them? Why do they need to take a good look at this?
Reddy: Yeah. I mean, I think, you know, part of the—I mean, I’ve worked with the DevOps community for many years now. And I think, you know, I find they’re really the, what I call, the digital athletes of the digital transformation, right? Because I think, when you look at the DevOps engineers and the community, they are the ones who are helping change the companies they work for. I mean, everybody is trying to become a digital business. They are the heroes—I mean, I use the Nike analogy of just get it done, just get IT done. And who does that? It’s the DevOps community.
And so, what happens is, it’s the ops, to me, is the constraints enterprises have, which is, I want to go fast, everybody talks about going fast and speed, but you need a direction. But you have the constraints of, you need to still be reliable. SRE is a big aspect. So, I want to shift left. So, you want to be compliant, you want to have quality. So, you can’t just go fast.
So, the challenges with what DevOps engineers are trying to do is, how do I go fast, but still have the reliability, the quality, the security, and still transform the companies they’re trying to do and remove the constraints for the business to go faster in an ever changing world? To me, that’s what we provide with this platform is really to help them make much more productive and make sure that we remove the constraints. They can—even if they are working for a large enterprise, they can still have the benefits of being a born in the cloud company and not have the constraints.
That, to me, is one of the fundamental things. And they are the digital athletes of the world. And so, to me, that’s really what we are here for, to support the chief digital officers to everybody who is transforming, but the DevOps engineers of the community is who are making this happen.
Langone: That’s a great point, Ashok. And I think, Alan, to just add a little emphasis—you know, what we’re trying to build is a platform that provides functionality that’s complementary to the activity that’s already going on today, right? So, you had mentioned it earlier that, you know, as you’re making these changes inside an organization, a lot of it is sort of people changing their day to day routines, right? So, you know, being more agile, following new processes and things like that.
What our goal is, is to provide functionality that a lot of the change has abstracted from the user, right? So, in other words, DevOps engineers continue to use the same tools that they were using months ago and weeks ago in the same way, but they plug into a process that’s largely abstracted from them, but gets all the benefits that—delivers all the benefits that an enterprise needs, right? So, to try to make the change and the transition that’s required to really embrace DevOps as, you know, as lightweight and as little impact on people’s days as possible.
So, that’s really the goal, is to provide functionality that has not existed before, and do it in a way that doesn’t have to require changes of behavior.
Shimel: Fair enough. Ashok Reddy, CEO of CollabNet VersionOne Xebia, until we find a different name; Derek Langone, president of the entity as well—thank you for joining us, both, today on DevOps Chat.
We’re gonna—you know what, we’re gonna be watching. This is a great story, it’ll be interesting to see how it progresses, right, both in terms of mergers and acquisitions activity as well as in terms of just—hey, man, this end to end, as I wrote about last week, this end to end DevOps market is open for the taking. There is no one, I think, who really has that whole story yet. It’s a developing thing, and it’ll be interesting to see, you know, how the market in our community helps pick the winners here as well as what you guys do with it, right? It’s yours for the taking.
Best of luck to both of you and to the combined company.
Reddy: Thank you, Alan.
Langone: Thank you. Good to talk to you.
Shimel: Great talking to both of you. This is Alan Shimel for DevOps.com. Thanks for joining us on this DevOps Special Edition Video Chat. Stay tuned, and we’ll see you soon.