In today’s world, where digital transformation is the driving force behind the success of many businesses, ensuring the resilience of software systems has become a top priority. As companies increasingly rely on complex, distributed, and cloud-based systems to deliver their services, the risk of failure and the impact of downtime on customers and revenue has grown exponentially. More and more companies deliver their products and services and interface with customers only digitally, (think online banking), which creates a single point of failure. Organizations have started to realize that reliability of delivered services is a key priority for growth, customer retention, reputation, and experience.

The cloud’s benefits such as efficiency, flexibility, time-to-market, and scalability, have driven many organizations to a low-cost and fragile business technology operating model. While the tremendous opportunities enabled by the cloud still outweigh the risks, amid the rapid advancements of digitalization, the demand for reliable software systems has become paramount.

The Company

During his career as an IT consultant and senior software engineer, Benjamin Wilms, CEO & Co-Founder of Steadybit, gained a deep understanding of the challenges and opportunities of modern cloud architectures and cloud applications. Benjamin soon realized that operating these complex systems was a Herculean task due to their many potential points of failure exacerbated by reliance on multiple independent services. In search of a solution, he encountered chaos engineering, which was pioneered by Netflix engineers more than a decade ago.

Early on, Netflix had realized the business risk attached to a digital-only delivered service. Chaos engineering is the practice of intentionally injecting faults into a system to test its resilience. The goal is to identify potential weaknesses and correct them before they cause an actual outage or other disruption. Alongside his job, Benjamin started his own open source chaos engineering tool, which led to the founding of Steadybit in 2019. Since then, Steadybit has continued to innovate in the chaos engineering space with its mission to make the discipline easily accessible and an integral part of every web application development lifecycle.

The Market and Opportunity

While the primary adopters of chaos engineering were e-commerce and IT giants, it has now become imperative for businesses of all shapes and sizes, particularly as distributed cloud architectures penetrate tech stacks. Now, from healthcare, finance, to manufacturing and beyond, chaos engineering has a foothold across industries. Many products fail to meet customer expectations as software engineering teams are focused on releasing new features quickly and do not prioritize product reliability. Any organization that relies on software to provide digital convenience benefits from incorporating continuous reliability and chaos engineering into their development and testing processes.

The continued adoption of cloud and microservices/distributed architectures fuels the need and demand for continuous reliability testing and validation. Microservices, as the name implies, suggest breaking down an application into smaller “micro” parts, by deploying and running them separately. The main benefit promised by this approach is a faster time-to-market for new functionalities due to better technology selection and smaller team sizes.

The distributed operational model is inherently accompanied by complexity, randomness, lack of visibility, and entropy. The Second Law of Thermodynamics states that in an isolated system, entropy, a measure of randomness or disorder, left to spontaneous evolution cannot decrease with time. Systems inevitably suffer from an inexorable drift or degradation – the same also applies to software systems. Over time, without diligent maintenance and testing, software systems also degrade into a state of disarray and reduced functionality. Furthermore, as the entropy increases, the unpredictability of future states increases.

Software testing serves as the countermeasure against the inevitable drift towards potential chaos. Like energy is used to decrease entropy in physical systems, meticulous quality assurance, continuous integration and deployment (CI/CD) pipelines, and automated testing (such as provided by our portfolio company Virtuoso) are the instruments to thwart entropy in software systems. Predicting outcomes under all possible states and input is tricky; testing in the context of a complex software system requires exploring the different permutations of potential states, identifying weaknesses and blind spots, rectifying them, and ultimately enhancing predictability and therefore reliability.

Traditional quality analysis covers only the application layer and does not test the unique and constantly changing nature of production environments. Chaos engineering simulates and tests a system’s resiliency across a comprehensive range of scenarios, including infrastructure components, external and internal dependencies, and the people and processes behind them, in an isolated environment. By testing and even breaking the systems with worst-case scenarios, organizations can proactively identify and address weaknesses in their tech stack and be better prepared for actual incidents.

Steadybit’s aim is for organizations to easily roll out this crucial discipline into the development process and to practice it continuously without expert knowledge. Many companies such as Salesforce have embraced this concept and are customers of Steadybit.

The Investment

Steadybit has now raised $6 million in a Series A financing, which Paladin was excited to lead, with participation from Angular Ventures and other existing investors. Looking ahead, as the cloud and distributed computing continue to penetrate the organizational landscape across all verticals, we believe that more organizations will seek to utilize the principles of chaos engineering. As such, we believe that the Steadybit team is in a strong position to continue to build on its early success and we look forward to supporting the company as it expands internationally and launches new product features.