As a product manager, I’m a true believer that you can solve any problem with the right product and process, even one as gnarly as the multiheaded hydra that is microservice overhead.

Working for Vertex Ventures US this summer was my chance to put this to the test. After interviewing 30+ industry experts from a diverse set of companies — Facebook, Fannie Mae, Confluent, Salesforce and more — and hosting a webinar with the co-founders of PagerDuty, LaunchDarkly and OpsLevel, we were able to answer three main questions:

1. How do teams adopt microservices?
2. What are the main challenges organizations face?
3. Which strategies, processes and tools do companies use to overcome these challenges?

How do teams adopt microservices?

Out of dozens of companies we spoke with, only two had not yet started their journey to microservices, but both were actively considering it. Industry trends mirror this as well. In an O’Reilly survey of 1500+ respondents, more than 75% had started to adopt microservices.

It’s rare for companies to start building with microservices from the ground up. Of the companies we spoke with, only one had done so. Some startups, such as LaunchDarkly, plan to build their infrastructure using microservices, but turned to a monolith once they realized the high cost of overhead.

“We were spending more time effectively building and operating a system for distributed systems versus actually building our own services so we pulled back hard,” said John Kodumal, CTO and co-founder of LaunchDarkly.

“As an example, the things we were trying to do in mesosphere, they were impossible,” he said. “We couldn’t do any logging. Zero downtime deploys were impossible. There were so many bugs in the infrastructure and we were spending so much time debugging the basic things that we weren’t building our own service.”

As a result, it’s more common for companies to start with a monolith and move to microservices to scale their infrastructure with their organization. Once a company reaches ~30 developers, most begin decentralizing control by moving to a microservice architecture.

Large companies with established monoliths are keen to move to microservices, but costs are high and the transition can take years. Atlassian’s platform infrastructure is in microservices, but legacy monoliths in Jira and Confluence persist despite ongoing decomposition efforts. Large companies often get stuck in this transition. However, a combination of strong, top-down strategy combined with bottoms-up dev team support can help companies, such as Freddie Mac, make substantial progress.

Some startups, like Instacart, first shifted to a modular monolith that allows the code to reside in a single repository while beginning the process of distributing ownership of discrete code functions to relevant teams. This enables them to mitigate the overhead associated with a microservice architecture by balancing the visibility of having a centralized repository and release pipeline with the flexibility of discrete ownership over portions of the codebase.

What challenges do teams face?

Teams may take different routes to arrive at a microservice architecture, but they tend to face a common set of challenges once they get there. John Laban, CEO and co-founder of OpsLevel, which helps teams build and manage microservices told us that “with a distributed or microservices based architecture your teams benefit from being able to move independently from each other, but there are some gotchas to look out for.”

Indeed, the linked O’Reilly chart shows how the top 10 challenges organizations face when adopting microservices are shared by 25%+ of respondents. While we discussed some of the adoption blockers above, feedback from our interviews highlighted issues around managing complexity.

The lack of a coherent definition for a service can cause teams to generate unnecessary overhead by creating too many similar services or spreading related services across different groups. One company we spoke with went down the path of decomposing their monolith and took it too far. Their service definitions were too narrow, and by the time decomposition was complete, they were left with 4,000+ microservices to manage. They then had to backtrack and consolidate down to a more manageable number.

Defining too many services creates unnecessary organizational and technical silos while increasing complexity and overhead. Logging and monitoring must be present on each service, but with ownership spread across different teams, a lack of standardized tooling can create observability headaches. It’s challenging for teams to get a single-pane-of-glass view with too many different interacting systems and services that span the entire architecture.

We learn more about Slack’s future, Revolut adds new payment features and DoorDash pushes its IPO range upward. This is your Daily Crunch for December 4, 2020.

The big story: Slack and Salesforce execs explain their big acquisition

After Salesforce announced this week that it’s acquiring Slack for $27.7 billion, Ron Miller spoke to Slack CEO Stewart Butterfield and Salesforce President and COO Bret Taylor to learn more about the deal.

Butterfield claimed that Slack will remain relatively independent within Salesforce, allowing the team to “do more of what we were already doing.” He also insisted that all the talk about competing with Microsoft Teams is “overblown.”

“The challenge for us was the narrative,” Butterfield said. “They’re just good [at] PR or something that I couldn’t figure out.”

Startups, funding and venture capital

Revolut lets businesses accept online payments — With this move, the company is competing directly with Stripe, Adyen, Braintree and Checkout.com.

Health tech venture firm OTV closes new $170M fund and expands into Asia — This year, the firm led rounds in telehealth platforms TytoCare and Lemonaid Health.

Zephr raises $8M to help news publishers grow subscription revenue — The startup’s customers already include publishers like McClatchy, News Corp Australia, Dennis Publishing and PEI Media.

Advice and analysis from Extra Crunch

DoorDash amps its IPO range ahead of blockbuster IPO — The food delivery unicorn now expects to debut at $90 to $95 per share, up from a previous range of $75 to $85.

Enter new markets and embrace a distributed workforce to grow during a pandemic — Is this the right time to expand overseas?

Three ways the pandemic is transforming tech spending — All companies are digital product companies now.

(Extra Crunch is our membership program, which aims to democratize information about startups. You can sign up here.)

Everything else

WH’s AI EO is BS — Devin Coldewey is not impressed by the White House’s new executive order on artificial intelligence.

China’s internet regulator takes aim at forced data collection — China is a step closer to cracking down on unscrupulous data collection by app developers.

Gift Guide: Games on every platform to get you through the long, COVID winter — It’s a great time to be a gamer.

The Daily Crunch is TechCrunch’s roundup of our biggest and most important stories. If you’d like to get this delivered to your inbox every day at around 3pm Pacific, you can subscribe here.

When Salesforce bought Slack earlier this week for $27.7 billion, it was in some ways the end of a startup fairytale. Slack was the living embodiment of the Silicon Valley startup success fantasy. It started as a pivot from a game company, of all things. It raised $1.4 billion, went from zero to a $7 billion valuation to IPO, checking off every box on the startup founder’s wish list.

Then quite suddenly this week, Slack was part of Salesforce, plucked off the market for an enormous sum of money.

While we might not ever know the back (Slack) room maneuvering that went on to make the deal a reality, it is interesting to note that Slack CEO Stewart Butterfield told me in an interview this week that he was not actually trying to sell the company when he approached Salesforce president and COO Bret Taylor earlier this year. Instead, he wanted to buy something from them.

“I actually talked to Bret in the early days of the pandemic to see if they wanted to sell us Quip because I thought it would be good for us, and I didn’t really know what their plans were [for it]. He said he’d get back to me, and then got back to me six months later or so,” Butterfield said.

At that point, the conversation flipped and the companies began a series of discussions that eventually led to Salesforce acquiring Slack.

Big money, big expectations

From the Salesforce perspective, Taylor says that the Slack deal was worth the money because it really allows his company to bring together all the pieces of their platform, one that has expanded over the years from pure CRM to include marketing, customer service, data visualization, workflow and more. Taylor also said that having Slack gives Salesforce a missing communication layer on top of its other products, something especially important when interactions with customers, partners or fellow employees have become mostly digital.

“When we say we really want Slack to be this next generation interface for Customer 360, what we mean is we’re pulling together all these systems. How do you rally your teams around these systems in this digital work-anywhere world that we’re in right now where these teams are distributed and collaboration is more important than ever,” Taylor said.

Butterfield sees a natural connection between what people do in the course of their work, what machines do behind the scenes in these systems of record and engagement and how Slack can help bridge the gap between humans and machines.

He says that by putting Slack in the middle of business processes, you can begin to eliminate friction that occurs in complex enterprise software like Salesforce. Instead of moving stuff through email, clicking a link, opening a browser, signing in and then finally accessing the tool you want, the approval could be built into a single Slack message.

“If you have hundreds of those kinds of actions a day, there’s a real opportunity to increase the velocity, and that has an impact, and not just in the minutes saved by the person doing the approval, but the speed of how the whole business operates,” Butterfield said.

Competing with Microsoft

While neither executive said the deal was about competing with Microsoft, it was likely an underlying reason that the companies decided to join forces. They may prove better together than they are separately, and both have complicated histories with Microsoft.

Slack has had an ongoing battle with Microsoft and its Teams product for years. It filed suit against the company last summer in the EU over what it called unfairly bundling of Teams for free with Office 365. In an interview last year with The Wall Street Journal, Butterfield said that he believes Microsoft sees his company as an existential threat. Hyperbole aside, there is tension and competition between the two enterprise software companies.

Salesforce and Microsoft also have a long history, from lawsuits in the early days to making friends and working together when it makes sense after Satya Nadella took over in 2014, while still competing hard in the market. It’s hard not to see the deal in that context.

In a recent interview with TechCrunch, Battery Ventures general partner Neeraj Agrawal said the deal was at least partially about catching Microsoft.

“To get to a market cap of $1 trillion, Salesforce now has to take MSFT head on. Until now, the company has mostly been able to stay in its own swim lane in terms of products,” Agrawal told TechCrunch.

As for Butterfield, while he saw the obvious competition, he denied the deal was about putting his company in a better position to compete with his rival.

“I don’t think that was really an important part of the rationale, at least for me,” he said, adding “the competition with Microsoft is overblown. The challenge for us was the narrative. They’re just good PR or something that I couldn’t figure out,” he said.

While Butterfield cited a list of large clients in enterprise tech, insurance and banking, the narrative has always been that Slack was favored by developer teams, which is where it initially gained traction. Whatever the reality, with Salesforce, Slack is definitely in a better position to compete with any and all comers in the enterprise communications space, and while it will be part of Salesforce, the two companies also have to figure out how to maintain some separation.

Keeping Slack independent

Taylor certainly recognizes that Slack’s current customers are watching closely to see how they handle the acquisition, and his company will have to walk a fine line between respecting the brand and product independence on one hand, while finding ways to create and build upon existing hooks into Salesforce to allow the CRM giant to take full advantage of its substantial investment.

It won’t be easy to do, but you can see a similar level of independence in some of Salesforce’s recent big-money purchases like MuleSoft, the company it bought in 2018 for $6.5 billion, and Tableau, the company it bought last year for more than $15 billion. As Butterfield points out, those two companies have clearly maintained their brand identity and independence, and he sees them as role models for Slack.

“So there’s a layer of independence that’s like that [for Mulesoft and Tableau] because it’s not going to help anyone call us Chat Cloud or something like that. They paid a lot of money for us, so they want us to do more of what we were already doing,” he said.

Taylor, whose opinion matters greatly here, certainly sees it in similar terms.

“We want to make sure we have a real integrated value proposition, a real integrated platform for developers, but also maintain Slack’s technology independence, technology agnostic platform and its brand,” he said.

Better together

As for the companies coming together, both men see a lot of potential here to merge Slack communications with Salesforce’s enterprise software prowess to make something better, and Taylor sees Slack helping link the two with workflows and automations.

“When you think about automation, it’s event driven, these long-running processes, automations. If you look at what people are doing with the Slack platform, it’s essentially incorporating workflows and bots and all these things. The combination of the Salesforce platform where I think we have the best automation intelligence capabilities with the Slack platform is incredible,” Taylor said.

The challenge these two men now face as they move forward with this acquisition, and all of the expectations inherent in a deal this large, is making it work. Salesforce has a lot of experience with large acquisitions, and they have handled some well, and some not so well. It’s going to be imperative for both companies that they get this right. It’s now up to Taylor and Butterfield to make sure that happens.

Last year, AWS launched the APN Global Startup Program, which is sort of AWS’s answer to an incubator for mid-to-late stage startups deeply involved with AWS technology. This year, the company wants to expand that offering, and today it announced some updates to the program at the Partner keynote today at AWS re:Invent.

While startups technically have to pay a $2500 fee if they are accepted to the program, AWS typically refunds that fee, says Doug Yeum, head of the Global Partner Organization at AWS — and they get a lot of benefits for being part of the program.

“While the APN has a $2,500 annual program fee, startups that are accepted into the invite-only APN Global Startup Program get that fee back, as well as free access to substantial additional resources both in terms of funding as well as exclusive program partner managers and co-sell specialists resources,” Yeum told TechCrunch.

And those benefits are pretty substantial including access to a new “white glove program” that lets them work with a program manager with direct knowledge of AWS and who has experience working with startups. In addition, participants get access to an ISV program to work more directly with these vendors to increase sales and access to data exchange services to move third party data into the AWS cloud.

What’s more, they can apply to the new AI/ML Acceleration program. As AWS describes it, “This includes up to $5,000 AWS credits to fund experiments on AWS services, enabling startups to explore AWS AI/ML tools that offer the best fit for them at low risk.”

Finally, they get partially free access to the AWS Marketplace, offsetting the normal marketplace listing fees for the first five offerings. Some participants will also get access to AWS sales to help use the power of the large company to drive a startup’s sales.

While you can apply to the program, the company also recruits individual startups that catch its attention. “We also proactively invite mid-to-late stage startups built on AWS that, based on market signals, are showing traction and offer interesting use cases for our mutual enterprise customers,” Yeum explained.

Among the companies currently involved in the program are HashiCorp, Logz.io and Snapdocs. Interested startups can apply on the APN Global Startup website.