If you look strictly at declining information technology budgets, it might look like tech’s traditional mainstay “infrastructure” market — computing hardware, software and networking gear — is spiraling into insignificance.

Indeed, it even looked that way to Martin Casado (pictured above), who cofounded the networking software startup Nicira Networks in 2009 before selling to VMware in 2012 for $1.3 billion and becoming general manager of its networking and security portfolio. “I was caught in this malaise for awhile,” said Casado, now a general partner at the venture capital firm Andreessen Horowitz.

No more. Speaking at the OpenStack Days conference today in Mountain View, CA, Casado declared, “We’re at the cusp of one of the biggest renaissances in infrastructure.”

While the market for public cloud services and software-as-a-service is a $220 billion market, Casado noted that’s only a small fraction of the overall $4 trillion IT market, leaving a lot of room to grow — and to steal business from incumbent companies. “Hundreds of billions of dollars of revenue will be disrupted,” said Casado. “I don’t there’s any vertical [industry segment] safe from this disruption.”

And Casado thinks the startups have an “unfair advantage” thanks to a number of trends. For one, the software-defined movement that Casado pioneered has lowered research and development costs for new entrants. Now, he said, there are many points at which new technologies can enter into the “stack” of computing technologies.

Second, software itself can now be delivered as a service, avoiding the need to sell to companies for them to install on computers on their own premises — a procurement process that takes much longer. That has enabled the creation of a wide range of companies, from Amazon Web Services to GitHub to Databricks.

Still, the remaining difficulty was going to market, and even with those two trends, the incumbents such as Oracle Corp. had retained a big advantage in their longstanding relationships with customers.

But a third trend is changing that situation: the rising power of developers in organizations who can go with open source software. “That changes everything,” Casado said. “Selling to developers massively disrupts traditional go-to-market engines.” Developers don’t care about analyst reports, developer certifications or baroque procurement processes. Instead, they’re willing to buy from smaller companies based on traction among other developers, active user communities, open source and technical elegance and other factors.

The result, he said: “There’s been a Cambrian explosion in developer-centric startups.” Although in some ways they resemble consumer startups, there’s at least one big difference: Eventually, they need to hire a sales force the scale up. Their inability to do so often enough, he said, is one reason why $7 billion of VC has gone into open source but only $1 billion has been returned.

The good news is that some viable open source business models are emerging beyond the one canonical example, Red Hat Inc. Besides Red Hat’s selling support and maintenance, there’s also the open-source-as-a-service model, such as GitHub’s software development as a service and Databricks’ data analysis as a service.

Still, it’s early to determine which business models will prevail. If nothing else, the dearth of initial public offerings of even relatively mature open source, data center infrastructure and cloud computing companies indicates investors are not yet certain about their long-term prospects.

For now, though, Casado said, he and other VCs are open for business when it comes to infrastructure startups.

TheCUBE, also owned by SiliconANGLE Media, is interviewing executives at a number of OpenStack-related companies at the conference. Co-CEO John Furrier provided an overview in a kickoff video with theCUBE’s Lisa Martin:

* Disclosure: TheCUBE is the paid media partner at OpenStack Days. Sponsors have no editorial control over videos on theCUBE or on SiliconANGLE stories.

Photo by Robert Hof