On Friday December 12, Hortonworks finished its first day of trading with a share price of $26.48, roughly 65% more than the IPO price of $16 per share. Hortonworks plans to raise $100M by means of 6,250,000 publicly available shares. Friday’s impressive showing bodes well for the Hadoop infrastructure and analytics market in 2015, particularly given that Hortonworks competitors are gearing up to execute IPOs in 2015 or shortly thereafter. Cloud monitoring and analytics vendor New Relic similarly gained in its first day of trading by rising 48% from $23 per share to $33.02 by the end of the day. The results represented a huge coup for venture capitalist Peter Fenton of Benchmark Capital, who serves on the board of directors of both companies. Whereas Hortonworks raised $100M in its IPO, New Relic raised $115M. The real winner in both of these IPOs, however, is Yahoo given that Yahoo owns roughly 20% of the shares of its spin-off Hortonworks and 16.8% of shares of New Relic.
This week, application performance management vendor New Relic announced it had filed an S-1 form with the U.S. Securities and Exchange Commission (SEC) as a step toward executing an initial public offering of its common stock aimed at raising roughly $100M. The IPO will be underwritten by Morgan Stanley, JP Morgan, Allen & Company and UBS in collaboration with JMP Securities and Raymond James & Associates. While the precise number of shares and their initial share price remains to be determined, New Relic revealed plans to trade shares under the stock ticker symbol NEWR. For the fiscal year 2014, New Relic has raised $215M in capital to date, with its most recent capital raise occurring in April 2014 in a round that raised $100M led by BlackRock, Inc. and Passport Capital, LLC. New Relic registered a loss of $40.2M on $63.2M in revenue. From September 30, 2013 to September 30, 2014, New Relic’s employee headcount increased from 315 to 534 while its total number of paying customers correspondingly increased from 7,552 to 10,590 over the same time period.
New Relic’s IPO announcement marks the second company this week in which Benchmark Capital’s Peter Fenton sits on the board of directors to seek $100M in IPO funding. Earlier this week, Hadoop vendor Hortonworks announced that it had similarly filed an S-1 for an IPO this Monday. New Relic’s S-1 filing lists HP, IBM, Oracle, BMC Software, SAP, AppDynamics, Splunk, Google and Webtrends amongst its competitors. New Relic’s announcement of its decision to pursue an IPO constitutes a watershed moment in enterprise IT insofar as its SaaS-based application performance management (APM) software claims deep integration with cloud platforms such as Amazon Web Services and Google Compute Engine. New Relic’s success in building analytics and performance management platforms for cloud-based infrastructures renders it an increasingly important fixture in enterprise IT, particularly as cloud adoption continues to accelerate throughout the enterprise.
On Monday, New Relic announced that it will join the Google Cloud Platform Partner program as a monitoring and application analytics application for Google Compute Engine. As a result of the partnership, Google Compute Engine customers will have free access to New Relic for “large-scale computing workloads on Linux virtual machines in Google’s data centers hosted on Google Cloud Platform.” Existing Google Compute Engine customers that are already using New Relic will receive the Google Cloud Platform Starter Pack, which features $2,000 toward the use of either Google Compute Engine or Google App Engine. Google Compute Engine customers can now use New Relic to keep track of the performance and health of applications as well as their larger IT environment. Meanwhile, Google will participate prominently at New Relic’s first technology conference, FutureStack13, from October 24-25.
New Relic’s partnership with the Google Compute Engine platform builds upon another recent partnership, namely, its integration into the Cloud Foundry Java “buildpack” that Cloud Foundry uses for application deployment. With just a few clicks of the mouse, developers can now use New Relic to monitor the performance of Java applications in Cloud Foundry development, testing and production environments.
On Tuesday, New Relic launched an Application Speed Index that measures the performance of SaaS-based applications based on user data. The application allows organizations to compare “application performance, end user response time, application availability and error rate with that of their industry peers in real-time and trending over time.” New Relic’s Application Speed Index features an Application Speed Index Leaderboard that displays the fastest applications using New Relic by industry.
Customers that opt-in are compared against their competitors in one of the following categories:
• Consumer Internet
• Marketing Site
• Mobile App
• Online Training & Collaboration
• SaaS (B2B)
• SaaS (Consumer)
• Social Networking
• Streaming Media
• Online Games
Participating customers receive a histogram of metrics such as end user response time and application performance, delivered daily, as measured against their peers. The application is enabled by big data aggregated from more than 25,000 New Relic customers and will be refreshed daily in a dashboard format.
New Relic plans to leverage its Application Speed Index to capitalize on its position as one of the leaders in data repositories about SaaS applications. Meanwhile, the Application Speed Index and its accompanying dashboards promise to inject volumes of data about application performance into the public domain in ways that are virtually guaranteed to affect the design and technical architecture of SaaS applications, in addition to igniting the debate about best practices for measuring application performance.