New Relic vs Datadog: Fight for Observability | In Practise

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New Relic vs Datadog: Fight for Observability

Former Head of Marketing, EMEA at New Relic

Why is this interview interesting?

  • The position and role of application performance monitoring in the DevOps stack
  • The potential advantages for Datadog from starting at the infrastructure monitoring layer in the enterprise stack
  • Core drivers of consolidation and the relative position of Datadog, New Relic, Splunk, Dynatrace, etc
  • How Datadog captured so much market share from riding the migration to the cloud
  • Potential disruption from the New Relic One prodcut
  • New Relic One pricing structure and how Datadog could respond
  • Outlook on potential M&A and the strategic value of assets to legacy incumbents

Executive Bio

Baxter Denney

Former Head of Marketing, EMEA at New Relic

Baxter is the Former Head of Marketing, EMEA at New Relic and one of the first marketing hires at the business. Baxter joined in 2013 when the company had under 150 employees and Datadog was just entering the market with a competing APM solution. He led the company from a bottom-up developer-focused to an account-based go-to-market strategy focusing on larger enterprises. Baxter is currently the Chief Marketing Officer at Red Points, the brand protection software solution. Read more

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Interview Transcript

Can you please provide a short introduction of your role and original responsibilities at New Relic?

I was hired by New Relic, in September 2013, to head up the marketing operations team as part of the online marketing group. I joined New Relic as director of marketing operations and then I had various other roles there throughout my five-year tenure.

What exactly is APM and what was the original value proposition in those early days?

The goal of application performance monitoring – or application performance management depending on who you're talking to – is to provide visibility to the folks who are building and deploying software into what's happening within their application. It's crazy to think about, but there was a time where people would build and deploy software and the only way to really debug and find issues was to actually sort through error messages and logs in order to find out what was going on. APM provides data back to developers, operations people, anyone in the business really, into what's happening with the application so they can troubleshoot, fix errors, change the way that they're building and deploying applications and so forth.

So the original proposition was mainly for tech-based companies to monitor an application, both on-prem and in the cloud?

In the case of New Relic, it was really focused on cloud. It was really oriented towards developers, delivered as a SaaS platform; so developers working with modern software languages who were building and running applications.

How does the technology actually work? For example, where are the agents really deployed on the customer stack?

APM is quite clever. For those who are familiar with Google Analytics and how web analytics works, it's similar but for applications. What happens is, a developer installs a little snippet of code inside their application and that code, with a little bit of customization, will track and send metrics back to the APM provider, whether that's New Relic or any of the other providers in an open source tool. That provider will then look within the application and gather important, relevant metrics and then present that back, in a much more easy to digest format, in terms of dashboards, reports and being able to track things over time and also highlighting what's happening within that application.

How is that different from where Datadog started, which seemed to be in the infrastructure layer? How is the deployment of the agents very different versus the old APM for New Relic?

APM is a little bit different from infrastructure monitoring, although they're both crucially important these days. Datadog focused on infrastructure monitoring and the key for that is really around your infrastructure environment which, most days now, means who you're using for your cloud provider. In the case of Datadog, what’s most important is connecting your AWS instances or your Google Cloud platform instances, with Datadog in order to provide the relevant metrics back. APM is totally different because it works within the application layer so it doesn't care, necessarily, what kind of cloud platform you're using because you're focusing on the application. They deploy it slightly differently although, coming together, they're really important in order to provide visibility of what’s happening within the organization's application and infrastructure.

Do you think there's any advantage to starting in that infrastructure layer for Datadog versus the traditional players that started elsewhere, in logging or APM?

When Datadog started, it wasn't necessarily seen as something that was an advantage. But I think now, given their success being able to focus and really tie in to the big theme of cloud migration and really specifically working with AWS, attending the AWS summits, providing a lot of content about organizations that were looking to invest in cloud and in AWS specifically, I think that played really well for them. That was able to help them drive a tremendous amount of growth without a massive investment on the marketing and sales side. The only advantage is really in terms of how it allows an organization to grow. There's no inherent danger in, necessarily, focusing on infrastructure or logging to start, or application monitoring to start, in my opinion.

For infrastructure monitoring I guess the agents have to be deployed in different ways versus APM?

Yes. With an infrastructure you don't necessarily have the same kind of concept of an agent that's deployed within an application because it's more dependent on the nature of the infrastructure, the nature of how you're setting your applications up and how it’s done itself. It’s more about connecting it, for instance, with your actual AWS account and your AWS instances. It's slightly different from an application which is really just taking a snippet of code and putting it within the code of your application.

So maybe infrastructure monitoring covers more parts of the stack effectively?

Yes, but it's related really, again, to just that infrastructure layer. It's a step deeper than the application in a way, but they don't provide the same sets of metrics. It's different kinds of monitoring both of which are really important for a modern software company.

Do you think that had an advantage for Datadog in that they could kind of almost collect more data from the customer from day one and maybe be involved in more parts of their enterprise stack than purely an APM layer?

It’s not necessarily an advantage in terms of the amount of data that they can collect in infrastructure, as opposed to APM; both of those are quite important to an organization. It really depends on who is looking first. If it's an operations person, who's mainly concerned with how cloud environments are going, how clouds work on-prem and so forth, then a tool like Datadog – especially a few years ago before New Relic and other providers invested in infrastructure monitoring – was easy to deploy and set up, again focusing on AWS as a big provider on the cloud side.

But there wasn’t an advantage in terms of the data. The advantage was in terms of how you pick it up and break into other areas of monitoring within an organization. So if you're already using Datadog, for instance, to monitor what's going on within your cloud environment, then it's a natural extension to then use them for your application support. Whereas I think one of the challenges for New Relic was jumping from the developing teams, who were really keen to use New Relic, to the operations people who were using infrastructure monitoring. Maybe they were already using Datadog or maybe they weren’t using anything, but I think it's a bit harder to do that in reverse, to go from the developers and the application side to those folks who are more on the back end for infrastructure monitoring. That's one of the challenges that they had in relation to Datadog, who did that very well.

What was the original go-to-market strategy at New Relic for the smaller and medium sized businesses?

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New Relic vs Datadog: Fight for Observability

September 17, 2020

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