Andreessen Horowitz Still Sees Big Money In Enterprise Software
By Robert Hof for Forbes
With information technology budgets in falling, it looks for all the world like tech’s mainstay markets — computing hardware, software and networking gear — are irrevocably headed for irrelevance.
Even Martin Casado, who cofounded the networking software startup Nicira Networks in 2009 before selling to VMware VMW +0.08% in 2012 for $1.3 billion and becoming general manager of its networking and security portfolio, was “caught in this malaise for awhile,” he said last week at the OpenStack Days conference today in Mountain View, Calif. But not anymore, Casado, now a general partner at the venture capital firm Andreessen Horowitz, told the audience of software engineers, executives and tech infrastructure startups. Instead, he declared, “We’re at the cusp of one of the biggest renaissances in infrastructure.”
For one thing, he thinks the $220 billion market for public cloud services and software-as-a-service has lots of opportunity to take share from incumbents from Hewlett-Packard HPQ -0.14% Enterprise and Cisco Systems CSCO -0.29% toOracle ORCL -0.46% in the much larger $4 billion IT market.
What’s more, software itself can now be delivered as a service, avoiding the need to sell software packages and licenses to companies for them to install on computers on their own premises. That procurement process traditionally has taken much longer. Software delivered as a service has enabled the creation of a wide range of companies, from Amazon Web Services to GitHub to Databricks.