VP Market Development and Insights at AppDynamics
Feb 4, 2016
End user experience monitoring is the most important dimension of Application Performance Management (APM). In order for IT to become business and user aligned they must understand user experience, user journey, and their customer and user constituency. Gartner’s recent APM survey “Survey Analysis: End-User Experience Monitoring Is the Critical Dimension for Enterprise APM Consumers” by Cameron Haight finds the same thing; 46% of survey respondents ranked end user experience monitoring as #1. I found the same thing across the thousands of end user calls I took as an analyst.
We’ve seen massive shifts in open source over the last decade, driven by highly robust projects driven by dedicated companies and individual contributors. Open source causes issues when trying to judge market opportunity. The analyst firms focus on looking at revenue, but there is an untracked ecosystem out there.
The best way to analyze market share and market opportunity, and many times what execution should be is to analyze what is actually in use versus what is likely sitting on a shelf collecting dust. Thankfully today’s user experience products can actually be measured by crawling the web, which is exactly what companies like Datanyze, Netcraft, Builtwith, and Similartech do.
The best open source resource for technology usage on the web is the http archive due to the fact that it’s backed by leading companies like Google, but increasingly is being sponsored by APM companies. The data is also publicly available and can be analyzed by anyone. I use this resource often when testing hypotheses about the market as it provides an easy way to get questions answered about technologies in use, trends, and other changes on the web.
This past weekend I decided to do some trend analysis on the “market leading” APM companies out there to see what the adoption trends are. While many vendors sell a lot of software, much of it is unfortunately shelfware. End users increasingly pay for it due to bundles which are common with vendors like IBM, CA, BMC, and HP.
BMC Truesight EUEM
CA Technologies APM (Specifically BRUM)
Dynatrace Application Monitoring
Dynatrace Gomez Real User Monitoring
Dynatrace Ruxit Real User Monitoring
New Relic Browser
HP and CA both have customers using packet analysis for APM, but most continue to move off those platforms based on large hardware expenditures (packet aggregation, switching, and server hardware to do the analysis). Additionally these technologies don’t work in modern applications (web or mobile based), especially those behind a CDN, hosted on public cloud, or in highly virtualized or container based infrastructure.
Dynatrace as a company has it’s own set of issues with loads of overlapping technologies. You can even see in the single use case of end user experience monitoring, they have 3 distinct technologies and product offerings showing the level of portfolio fragmentation. Where will they invest? Which one is the right choice? The portfolio is an increasing mix of overlapping technologies, which must be corrected if they wish to remain competitive with leading vendors with a unified strategy (AppDynamics and New Relic).
Here are the charts showing the remaining vendors analysis. We have no way to differentiate between paid, trial, and freemium offerings here, so please keep that in mind.
New Relic has a massive installed base, since they launched their browser product in 2013. You can see momentum has slowed throughout 2015. In the last earnings call New Relic only had 5,285 customers paying more than $5,000 per year. The base New Relic Browser product costs $2,388 per year for 500,000 page views, which is quite a small site.
If we remove the New Relic numbers we get this graphic.
You’ll firstly notice that legacy vendor technologies are all on the decline, this includes BMC, Dynatrace Gomez, IBM Tealeaf. The clear investment is in the newer technologies such as AppDynamics, Ruxit (which is new, but gaining traction), and some Dynatrace installs.
If anyone wants the queries I used to collect this data, it’s all open data available on Google BigQuery, or you can download the data, and load it into your own MySQL database.
PR: New Relic Announces Third Quarter of Fiscal Year 2016 Results
February 4, 2016
SAN FRANCISCO--(BUSINESS WIRE)-- Software analytics company New Relic, Inc. (NYSE: NEWR) today announced financial results for the third fiscal quarter ended December 31, 2015.
“We are continuing to drive momentum for the New Relic Software Analytics Cloud as companies of all sizes – from start-ups to Fortune 10 enterprises – entrust their digital future to New Relic,” said Lew Cirne, CEO and founder, New Relic. “Whether you're a developer, an IT operations professional or an executive, we see New Relic rapidly becoming the first, best place to look when you need to understand what’s happening in your digital business.”
Third Quarter Fiscal 2016 Financial Highlights:
Revenue of $47.7 million, up 64% compared with the third quarter of fiscal 2015 and 11% from the second quarter of fiscal 2016.
GAAP loss from operations was $18.2 million for the third quarter of fiscal 2016, compared with $15.6 million for the third quarter of fiscal 2015. Non-GAAP loss from operations was $10.7 million for the third quarter of fiscal 2016, compared with $11.8 million for the third quarter of fiscal 2015.
GAAP net loss per share was $0.37 for the third quarter of fiscal 2016 based on 49.0 million weighted-average shares outstanding, compared with $0.70 for the third quarter of fiscal 2015 based on 22.8 million weighted-average shares outstanding. Non-GAAP net loss per share was $0.22 for the third quarter of fiscal 2016 based on 49.0 million non-GAAP weighted-average shares outstanding, compared with $0.28 for the third quarter of fiscal 2015 based on 42.3 million non-GAAP weighted-average shares outstanding.
Cash, cash equivalents and short-term investments were $191.0 million at the end of the third quarter of fiscal 2016, compared with $189.0 million at the end of the second quarter of fiscal 2016.
As of December 31, 2015, total Paid Business Accounts were 13,126.
Dollar-Based Net Expansion Rate for the quarter ended December 31, 2015 was 129%.
New customers in the quarter included: Cirque du Soleil, FlightNetwork.com, France Télévisions SA, Hachette Book Group, Hy-Vee, Inc., Isolation Network, Inc., Lighthouse eDiscovery, Major League Soccer, NYC-DOT, New Zealand Media and Entertainment, Office Depot International in Europe and Royal Opera House.
Expanded customer relationships in the quarter included: Adobe Systems Incorporated, American Eagle Outfitters, Inc., Citrix, Despegar.com, Eastern Bank Corporation, Fox Sports, Globosat, Hogg Robinson plc, iHeartMedia, Jive, Kent State University, Multiplus, NBCUniversal, Ocado, REI, Sensis, VenueNext, Yellow Pages Limited and Zenefits.
Third Quarter & Recent Business Highlights:
Acquired Opsmatic, Inc., a San Francisco-based startup focused on live-state infrastructure monitoring for modern DevOps teams.
New Relic is initiating its outlook for its fourth quarter of fiscal 2016, as well as updating its outlook for the full fiscal year 2016.
Fourth Quarter Fiscal 2016 Outlook:
Revenue between $49.8 million and $50.8 million, representing year-over-year growth of between 49% and 52%.
Non-GAAP loss from operations of between $11.5 million and $12.5 million.
Non-GAAP net loss per share of between $0.23 and $0.25. This assumes 49.7 million non-GAAP weighted average common shares outstanding.
Full Year Fiscal 2016 Outlook:
Revenue between $178.6 million and $179.6 million, representing year-over-year growth of between 62% and 63%.
Non-GAAP loss from operations of between $40.8 million and $41.8 million.
Non-GAAP net loss per share of between $0.83 and $0.85. This assumes 48.9 million non-GAAP weighted average common shares outstanding.
About New Relic
New Relic is a software analytics company that delivers real-time insights to more than 500,000 users and 13,000 paid business accounts. As a multi-tenant SaaS platform, the New Relic Software Analytics Cloud helps companies securely monitor their production software in virtually any environment, without having to build or maintain dedicated infrastructure. New Relic helps companies improve application performance, create delightful customer experiences, and realize business success. Learn more at newrelic.com.