Monday, May 24, 2004

Comments on Hatteras

Most people in blogspace already know that today Microsoft announced a full suite of lifecycle development tools called the Visual Studio Team System.  One piece of this system is a new enterprise-class source control system which is code-named "Hatteras".  These announcements are causing lots of people to ask questions about SourceGear Vault.  This blog posting is intended to start answering those questions.  We appreciate Microsoft for putting us under NDA and sharing the news about Hatteras in advance.  We've known about this for over nine months, and we are glad to finally be able to publicly talk about what this news means for SourceGear and Vault.

Is Hatteras based on technology from Vault?

No.  Just like Vault, Hatteras is built on SQL Server as the underlying repository store.  Because of this, I have already heard a number of people asking if perhaps Microsoft might have licensed some technology from SourceGear.  Alas, this is not the case.  Microsoft's new enterprise-class source control tool was written from scratch by a team in the Raleigh-Durham area.  The team is being led  by Brian Harry, the guy who originally developed SourceSafe at OneTree before it was acquired by Microsoft.

Does this mean SourceGear Vault is dead? 

We certainly don't think so.  Obviously we do not consider this to be good news.  Over time, every source control vendor will be impacted by Microsoft's decision to finally take source control seriously.  We would all certainly prefer that Microsoft stay out of this market segment.  But we don't get everything we want.

Hatteras is not the end of SourceGear Vault.  There is plenty of room for SourceGear and other vendors to differentiate and continue to have a healthy market.

Different Positioning

The positioning of Hatteras is simply different from Vault.  Hatteras appears to be designed to kill Rational ClearCase, not Vault.  In fact, it seems clear to me that the entire new suite of lifecycle tools is Microsoft's reaction to IBM's acquisition of Rational.  I admit that SourceGear will be impacted, but the damage is basically incidental.  If you think Microsoft is out to beat SourceGear, you don't understand Microsoft.  We are quite successful for a small company, but we are not even close to being on Microsoft's radar screen.  Microsoft is firing its weapons at Rational, and SourceGear is simply a little too close to the battlefield to remain completely unharmed.

Most of the damage will happen in terms of very large customers.  I'm talking about teams with several hundred developers or more.  Those kinds of companies aren't really looking seriously at Vault anyway.  Vault is currently selling very well with teams of 10, 25 and 50 developers.  We don't see that changing anytime soon.  That kind of small team doesn't need the sheer size of something like ClearCase or Hatteras.

And they probably can't afford it either.  Pricing for Hatteras has not yet been announced, but folks are getting the impression that it will be very expensive.  I don't think this tool is going to be "basically free" like SourceSafe.  If you're thinking about Hatteras, you should probably look at the pricing for ClearCase and assume it may end up in a similar ballpark.

Different Features

The source control market has always been highly fragmented.  No player dominates this arena, and Hatteras is not going to change that.  If you can afford it, Hatteras will eventually be the preferred tool for teams which develop only on Windows using only Visual Studio.  But despite all of Microsoft's efforts, there are plenty of teams which don't fit neatly inside that box.

Do you need clients on Unix or MacOS?  Do you want integration with other development environments besides Visual Studio?  Do you have a limited budget?  Microsoft is not likely to meet these needs, and that will leave opportunities open for other vendors.  Granted, these are niche opportunities.  I'm not saying that the source control market will spawn a bunch of high-flying IPOs.  I am merely pointing out just a couple of examples why there will be plenty of vendors who continue to exist and thrive in this space.  Unless we screw something up badly, SourceGear will be one of them.

Looking Forward

SourceGear has been in business for over seven years.  We have learned how to put plywood over our windows when the storm is approaching.  This storm will not be fatal for us.

Microsoft was kind enough to give us nine months advance notice before today's announcement.  We probably have at least another nine months before Hatteras 1.0 is shipping.  Vault 2.0 is available now.  It's selling extremely well and our customers love it.  We plan to stay focused on our product and our customers.  Our plans did not change today.

Still, Hatteras has probably ruined my chances of becoming a billionaire by age 40.  I definitely blame Brian Harry for that. 

But SourceGear and Vault are going to be okay.