Need more context? Talk to one of the 14 Vercel experts who helped write this report
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This report covers the behind the scenes story of Vercel: from the ingenious way it came into existence, to its growing pains that ultimately drove Robinhood away and its little known private equity arm that holds warrants from nearly 100 fintech startups.
In this report, you’ll learn the real backstory:
Need more context? Talk to one of the 14 Vercel experts who helped write this report.
And there's a good reason why - that tool was started by Vercel. More specifically, it was released by Guillermo Rauch, the superstar coder that's now the CEO of Vercel.
It's with that entry point that Vercel has been able to grow so quickly. Next.js was quickly embraced by techno-forward developers and starting in 2020 that growth eventually spread to larger more traditional websites, opening up a market for Vercel.
Guillermo's Next.js tool got very popular with developers, fast. Unlike a lot of developer tools, it targeted a group of developers that often got little attention: frontend developers. It solved many common painpoints and frustrations for frontend developers, offering a tool known for its simplicity, performance, and developer-friendly experience.
It was a genius move: Next.js got popular and Vercel (then known as Zeit) extended it naturally. Next.js allowed developers to build websites faster and Vercel allowed them to put it on the internet easily.
Industry experts are quick to point to another company that was in a similar position: Heroku. Just like Vercel, it grew meteorically by latching itself to a then rapidly growing technology: Ruby on Rails. It was acquired by Salesforce in 2010 and ultimately never was able to grow out of its initial Ruby on Rails niche.
Eventually, Ruby on Rails adoption flattened out and Heroku failed to gain broad adoption.
There's reason to believe Vercel's strategy might work where it failed for Heroku, according to experts who are familiar with both.
Heroku is a backend cloud whereas Vercel is a frontend cloud. Backend clouds tend to be more technology-specific, whereas frontend clouds can work with a large range of technologies with less customization.
One IT director at a Fortune 500 shares his experience using Vercel with non-Next.js technologies:
People think of Vercel as a Next.js tool but it really isn't. We have a legacy Angular app on Vercel and it's been great.
Salesforce acquired Heroku in 2010, just as Heroku was expanding outside Ruby on Rails. The match never made a lot of sense and according to industry insiders it put a dent in Heroku's expansion efforts. According to one former Heroku employee the acquisition changed the pace of work at Heroku:
Basically as soon as Salesforce came in, I saw things change. I saw us working less hard. It felt like we had made it to the destination, everybody made their cash and that was that. Heroku could have been so much better if Salesforce hadn't suffocated it.
Guillermo has been covertly building an ecosystem around Vercel at a scale never seen before. For more information about Guillermo's strategy, schedule a private call with a Vercel expert.
10+While Vercel started with Next.js, it has grown to support a wide range of frontend technologies - experts say its fate no longer is tightly coupled to Next.js.
| Technologies supported by Next.js | ||
|---|---|---|
| Angular | React | Ember.js |
| Gatsby | Nuxt.js | Polymer |
| Remix | SvelteKit | Vite |
| Vue.js | Sanity | Jekyll |
| For more information on Vercel's ecosystem support, schedule a call with a Vercel expert | ||
To speak to a Vercel expert,schedule a private call
Developers love Vercel but that doesn't mean it's the right choice for the enterprise. On the enterprise front, industry experts are more hesitant to recommend Vercel. Brand is important and Vercel just doesn't have the trust that AWS & others in the space have built. One Fortune 500 IT leader shares:
CIOs don't get their cues from what the Twittersphere is saying. I just don't see Vercel on CIO's lips nearly as much as things like AWS or Splunk - yet.
Enterprise IT leaders are quick to mention concerns about how Vercel scales to a range of use cases and legacy applications. Vercel is the new kid on the block, but can it scale to work with legacy apps? One banking sector IT leader shares:
Sure, if you just have a bunch of modern apps built in the last 5 years then yes - Vercel is perfect. That's not the unicorn land I live in
According to developers, Vercel is optimized for newer technologies and doesn't work well out of the box with older, legacy solutions. Other solutions, like AWS are more flexible even if they're more complicated and harder to use and deploy.
Still, IT leaders say they're paying attention and starting to try it out on internal applications and applications that have been built more recently. One enterprise engineering leader shares:
We're using Vercel for our internal tools, including a mission critical tool that's used day-to-day by our operations staff. For that it's been fantastic - many of our legacy applications use ancient technology and I don't know if we'll ever get to migrating those over.
Several IT leaders mentioned difficulty integrating Vercel into their cloud environment, be it AWS, Azure or an on-premise network. One IT director shares his experience:
We were almost good to go with Vercel and our CISO put a deadstop to it because we couldn't get it on the same Layer 2 network as our existing cloud. I don't know how others get around that but that's a pretty serious limitation.
IT security experts are quick to highlight the architecture limitations of Vercel. To ensure security, Vercel and the company's cloud servers need to be able to communicate securely and talk to each other outside the public internet - and Vercel doesn't fit nicely with their existing cloud.
One IT security manager shares:
Honestly I like Vercel but I just don't get their networking architecture. For us it's a non-starter from a security perspective - all I want is VPC peering, how hard is that?
To address these concerns, Vercel has launched "Secure Compute" but IT buyers say it's still not the security they expect:
Vercel Secure Compute doesn't work for us. It adds latency, it's very expensive for what it is and frankly it's just easier to put everything on AWS, where the rest of our cloud already is.
For more information on Vercel's security posture in the market, speak to a Vercel expert.
10+With increased regulation around security breaches & the resurgence of ransomware, IT buyers are naturally hesitant to trust a new vendor they're not familiar with. A Fortune 500 IT manager shares their hesitation concerning Vercel:
If I had a dime for every time a tech service assured me of ironclad security, It'd be on a beach in Bali by now.
Vercel is used by Adobe, Meta, Chipotle and others. To speak to an enterprise client of Vercel,schedule a call.
10+Netlify was started with a focus on hosting simple, static websites - a very different place than Vercel started. It was founded in 2014, preceded Vercel by several years and didn't get much traction in its early years.
Multiple Netfliy clients report that deployments are slow, sometimes fail unpredictably and that Netlify is missing some of the cutting edge features that Vercel has. According to a former Netlify client now on Vercel:
Our deployments used to take 30+ minutes on Netlify, now we're on Vercel and they take less than 5 minutes. I don't know what took us so long to move away from Netlify.
Coming from a background at Rackspace and Liquid Web, Netlify's head of sales Courtney Skarda is laser focused on selling to large, strategic clients. Some of Netlify's clients include Telus (large Canadian telco), Danone, Citrix and Nike.
47% of Netlify's staff is employed in sales, compared with just 23% for Vercel, where the majority of staff are software engineers. Vercel is catching up through — 55% of Vercel's job openings are now in sales and customer success.
Netlify excels at providing high-touch support, with a hands-on onboarding experience for its high-value enterprise clients. Multiple Netlify clients mentioned that the high support level gave them confidence they could count on Netlify and helped them grow their usage of the platform beyond the initial use case. One Netlify client shares:
When I pick up the phone, they answer. And I know if there's issuers, or God forbid, a breach: they'll be there for us.
Despite Netlify's strong sales effort, Netlify adoption has flatlined and even started regressing in 2023. With Vercel on one end winning over developers and AWS Amplify winning the hearts of CIOs, there hasn't been much left for Netlify.
In response, Netlify is going on a shopping spree to assemble a broader suite of products under one roof, expanding from just a frontend cloud platform. Recent acquisitions include Stackbit, Gastby and Quirrel, all for undisclosed amounts.
Can Netlify acquire its way out of its troubles? The new Netlify includes new verticals like "Netlify Create" and "Netlify Connect", each powered by recent acquisitions.
Industry experts are skeptical Netlify can acquire its way out of its troubles. According to one long-time IT buyer:
Acquiring a series of mediocre products and combining them into one uber-mediore offering does not sound like a winning strategy to me
To speak to experts with experience using Netlify's new suite of products, schedule a private call.
AWS Amplify was started in 2017 to make it easy to build mobile and web apps on top of the AWS cloud, responding to the growing attention Vercel & Netlify were getting.
Amplify doesn't have the same polished developer experience as Vercel. Clients describe it as cumbersome to set up, with hours of tedious and finicky work to configure, frustrating error messages and sometimes requiring specialized experience from AWS experts to get up and running.
Boy don't I miss the hours messing around with YAML files trying to get Amplify to work. Amplify is like Linux where Vercel is like a Mac: everything is polished and just works with Vercel.
According to another client, Amplify doesn't work as well with Next.js as Vercel - Amplify is frequently months behind catching up to new features available in frontend technologies.
It took nearly a year for Amplify to support the latest version of Next.js. I kept asking our AWS rep for information and I didn't get the sense they care very much.
According to clients, AWS Amplify Gen2 has closed a lot of the feature gaps with Vercel. Gen2 is a new version of Amplify that's been in the works for a while and is now in beta. It's a complete rewrite of the original Amplify and is designed to be more flexible and easier to use.
It's still not ready for production use but it's looking promising.
We've been testing Gen2 and it's very good. We were considering moving to Vercel but now we're waiting to see how Gen2 evolves.
The overall sentiment clients shared about Amplify is that it was "good enough". It might not be the cutting edge, but it's very configurable, works well for most use cases and addresses their pain points. As one Fortune 500 client shares:
Here's the truth - Amplify is fine. It took some effort to get set up but these days I barely think about it. It works and we're happy with it.
CIOs love Amplify because it's something they're familiar with, it's a vendor they trust with an already negotiated contract in place.
For developers in an enterprise environment, that means that using Amplify doesn't require a months-long vendor management process. They can just turn it on with minimal extra approval - and that's its killer feature. As one engineering manager explains:
Sure, it's not the new shiny thing out there, but AWS Amplify has been fantastic for us. It's sped up our CI pipeline dramatically and it works out of the box in our environment.
For clients already on AWS, Amplify has a big leg up in the security domain: it doesn't suffer the same troubles that Vercel has connecting its cloud to AWS since everything stays in the same cloud.
For clients already on AWS, Amplify has a big leg up in the security domain: it doesn't suffer the same troubles that Vercel has connecting its cloud to AWS since everything stays in the same cloud.
For us Amplify was the obvious choice because it connects simplessly with our existing networking stack on AWS.
No similar products exist (yet) for Azure or Google Cloud.
AWS and Vercel have approached pricing in very different ways — for starters, Vercel charges a per-developer fee which includes a generous resource allocation but hefty overages beyond that. Experts describe it as a strategy to push enterprise users to negotiated long-term agreements.
True to its developer-centric roots, Vercel's generous "hobby" tier allows developers to scale websites for free, albeit with limited access to security, enterprise & compliance features. This has cemented as the developer-friendly option.
| Free tier comparison | ||
|---|---|---|
| Vercel | Free up to 100GB/month, indefinitely | |
| AWS Amplify | Free up to 15GB/month, for a maximum of 12 months | |
Here's how key pricing elements compare between AWS and Vercel:
However this doesn't tell the full story since Vercel focused on signing low-term enterprise commitments, which include heavily discounted pricing. The off-the-rack sticker prices don't mean very much, according to clients.
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