🔮 Developer-First #135 - 2025 Predictions
10 predictions for the developer-first ecosystem in 2025
Hello friend,
First of all, I’d like to wish you and your loved ones a wonderful new year! May 2025 be full of emotions, adventures and successes 🎉
With transaction announcements slowing down in the last two weeks of 2024, I’d like to focus this edition on some predictions for the developer-first ecosystem in 2025. I’ll be back next Monday with weekly transaction coverage. I’ve also started working on the 2024 developer-first transactions report, which I plan to release by mid-January.
Now, let's dive into my predictions for 2025.
From the rise of AI-assisted coding tools to large companies’ massive investments in AI capacities, I believe we’ll start seeing several trends shaping software development in the coming decade in 2025.
1. The rise of the End-to-End Engineer
Following “full-stack” engineers who handle everything from frontend to backend, I believe we’ll see more “end-to-end engineers”. These engineers will be responsible for the entire software development lifecycle—concept, code, deployment, maintenance, iteration. End-to-end engineers will leverage AI for everything from code suggestions to automated testing and continuous deployment setups. The result? A shift in the skillset for developers, who will become orchestrators of AI-driven tooling rather than domain specialists in one layer of the stack.
2. A wave of AI stack M&A
Most investment bankers anticipate an M&A surge in 2025, and even if I’m perhaps biased, I predict this trend will also impact developer-first startups. More specifically, we’ll see increased consolidation in the AI stack. The need for integrated, end-to-end platforms will grow as enterprises scramble to deploy AI across their organisations. Acquisitions will help major vendors fill the gaps in their offerings, making it easier for developers to access everything they need under a single brand or platform.
3. General-purpose LLMs become commoditised
While 2024 was the year that crowned general-purpose LLMs, these models will become in 2025 an essential, near-invisible part of cloud services, similar to how container orchestration or serverless functions are today. As commoditisation continues, expect hyperscalers to bake LLMs even more seamlessly into their clouds. One major acquisition will likely underscore this trend (most probably Amazon buying Anthropic) to shore up in-house AI capabilities. For developers, this means simpler access to general-purpose LLMs and a new era of “AI as a given” in coding workflows.
4. Surge in micro SaaS and agent-based products
With AI tools lowering the barrier to entry, more “business-savvy” developers will spin up and bootstrap their own SaaS products or even AI-driven agents that tackle niche problems. Solo (tech) founders leveraging AI can build, market, and maintain micro SaaS offerings that solve highly specific industry or consumer problems—and do it fast. The result will be a surge in small, profitable startups with minimal headcount but significant reach.
5. Record year for Service Integrators
Demand for AI across industries is outpacing the availability of in-house skill sets, particularly for advanced topics like large-scale data processing, model customisation, and AI governance. Service integrators that can spin up specialised teams to handle these tasks end-to-end will see historic levels of revenue and growth.
6. VCs double down on bold inception bets
Despite economic uncertainties, early-stage startups with cutting-edge ideas—and stellar founding teams—will continue to find funding. In 2025, we’ll see VCs become even more proactive. Instead of waiting for pitches, they’ll actively headhunt top talent at big tech companies and AI labs, co-founding startups around specialised technology or untapped market opportunities.
7. Security as code
With AI accelerating code production, the risk of introducing vulnerabilities skyrockets if security isn’t automated and integrated into every part of the pipeline. The “Security as Code” concept will go mainstream, with security controls integrated directly into the development process as code. Every commit triggers a build and test pipeline and a comprehensive set of automated security scans and compliance checks.
8. The rise of AI-first Service Providers
2025 will mark a turning point for service providers as savvy founders harness AI development tools, advanced code analysis, and automated testing to create “AI-first” service companies offering faster delivery and lower costs. While AI agents handle much of the repetitive or low-level coding, human teams focus on client relationships, strategic guidance, and creative problem-solving. Developers remain integral in directing and refining AI outputs—ensuring code quality, maintainability, and alignment with business goals.
9. Enterprise-ready developer tools gather most of the series B+ investments
As enterprises double down on digital transformation, they need developer tools to handle complex environments without sacrificing agility or developer experience. In 2025, the market for developer-first solutions that cater to the enterprise will command top dollar from VCs. These companies can sign multiple six-figure ARR deals per year while maintaining triple-digit growth, making them prime candidates for Series B+ investments.
10. Commercial Open Source becomes the default model for developer-first startups
By 2025, commercial open source will firmly establish itself as the go-to business model for developer-focused startups. In this model, the core product is freely available under an open-source license, while additional enterprise features, support, or services come at a premium. With VCs more familiar with open-source and the proven success of commercial open-source startups, tech founders will open-source their product by default to create transparency and trust and build their initial user base.
Final thoughts
The year 2025 will be transformative for developers. AI is no longer just a feature or a buzzword—it’s a fundamental shift in how software is built. End-to-end engineers will lead projects leveraging powerful AI tooling, while service integrators, AI-first providers, and a standardised AI stack will redefine the industry. The software world is on the cusp of a new frontier that will reward the ambitious, adaptable, and AI-savvy.
See you next week for your usual newsletter.
P.S.: if you're a CTO or tech leader, consider joining the free Unicorn CTO Slack community. We're a small group of international CTOs and tech leaders, and we often meet for virtual (or not) coffees.