Infra Play #107: Vercel

What’s going on with one of the most important players in the front-end of cloud infrastructure software?

As LLMs have brought a massive wave of interest in the creation of applications, many of those new users are realizing that going from a prototype to production requires a lot more technical knowledge than they thought they would need. Rather than scare off users, this is bringing more attention toward developer-oriented products and services that offer a more curated and “hand-holding” experience, while still allowing users to follow best practices in deploying applications at scale.

The most interesting company in this space is Vercel. Its story is tied to open source, native cloud scaling, and “taste.”

The key takeaway

For tech sales: In a market where many developer tools companies are struggling, Vercel has executed a successful pivot in the last 12 months, mostly due to v0 opening up a number of new accounts. The next 12 months will be critical - either they sustain the momentum and consolidate a leadership position or things will start to fall apart from a GTM perspective.

For investors: At $9B valuation, it’s probably too late to get a “good deal.” Next.js no longer represents a significant moat and there are several competitors offering a superior developer experience and better pricing for that specific component. The primary reason to bet on Vercel is because you would expect they get acquired at a higher valuation (which requires AWS-level deep pockets) or because you believe Guillermo will figure it out. v0 is a strong indication of that thesis, but the risk is obvious.

Next.js and Guillermo

Let’s start with first principles.

While the majority of enterprise applications were essentially deployed locally, over the last 10 years we’ve had a significant shift toward cloud-based application development. More recently, this has evolved into edge computing, i.e. running code closer to users around the world for faster performance and better user experience, which has created entirely new runtime environments and competitive opportunities.

For all intents and purposes, modern web development lives on JavaScript. Over time, a number of frameworks and languages have been built around JavaScript that solve a variety of problems or make life easier for developers.

The most fundamental technology for front-end development (i.e., how stuff looks) is React, originally developed within Meta and still heavily maintained by them. Servicing millions (or even billions) of users is extremely difficult, so optimized frameworks are needed to deliver an experience that users would come back to. Another technology that’s very popular is Node.js, which is basically the plumbing for the backend of these applications.

Source: 2025 Stack Overflow Survey on web frameworks

There is a meme in the industry that there is a new web development framework coming out every week. Some of the most popular open source projects today include React, Vue, Angular, Svelte, Astro, Qwik, and many others. Getting attention and staying power in this space is extremely difficult. For readers interested in a deeper technical dive into the broader JavaScript runtime ecosystem beyond just frameworks, Jamie’s comprehensive analysis of the last decade’s runtime explosion provides valuable context on how we got to this fragmented landscape.

Source: HD in HD

In the previous paragraph, one of the most popular frameworks today is Next.js. It can be described as an opinionated merge of front-end (React) and back-end (Node.js) to allow full stack deployment of web applications. It was written by Guillermo Rauch (who nowadays walks around with a proud 80s mustache) and became the foundation to launch Vercel, the “best place to deploy and scale Next.js applications.”

Now, when we say open source and widely adopted, we should also clarify that this is not a charity and Guillermo is very much a founder mode guy that wants to win.