Splunk goes down-market and leverages AWS' market dominance

Splunk is all grown up now and, as such, needs to continuously ramp up revenue. Riding on AWS' coattails is one method.

AWS re:Invent

AWS' 2015 re:Invent conference brought in over 13,000 attendees to Las Vegas.

Credit: Amazon

Anyone who spends any reasonable amount of time perusing technology blogs will be well aware that this week sees Amazon Web Services holding its annual re:Invent event in Las Vegas. The event, which has become a "must attend" for most technology journalists and analysts (not to mention customers, partners and, often, competitors), sees tens of thousands of individuals descend upon Las Vegas to hear the latest and greatest from the cloud computing behemoth. It also sees a bunch of third-party vendors make product announcements -- either to roll out something that leverages a newly announced AWS feature, or simply to ride in the jet stream of the No. 1 public cloud vendor.

And it's not just little startups wanting to bask in the limelight; real grown-up vendors are increasingly seeing AWS generally, and re:Invent in particular, as an important event.

A case in point is Splunk, the publicly listed machine data company. Despite the fact that (albeit only in certain areas, and at a base level) AWS competes with the company, Splunk still realizes that it has no option but to show up and announce something new.

To wit, Splunk has two announcements this week:

Let's brag about the big-name customers

When you're publicly listed, Wall Street likes to hear that other important companies use your product. It's not a perfect measure, but there is a degree of reflected glory that comes from customer announcements. Splunk doesn't disappoint and is rolling out a bevvy of customer names at the show including analyticsMD, Cox Automotive, Eastman Chemical Company, EnerNOC, FamilySearch, Illumina and Travis Perkins.

Luckily, Splunk has managed to convince some of these vendors to provide a sound bite which nicely articulates the value Splunk delivers to them:

"Using AWS and Splunk solutions together gives Cox Automotive an advantage by helping us use data to fuel the business," said Steven Hatch, technology manager at Cox Automotive. "We generate massive amounts of data per day across all of the Cox Automotive infrastructure, including brands like Autotrader and Kelley Blue Book. We rely upon the integration of the Splunk App for AWS and Splunk Cloud with AWS to understand the health of production systems and to give our engineering and development teams insight into new software releases. It raised our efficiency and visibility to new levels, helping to protect our current revenue sources and opening our eyes to new revenue streams."

And if that wasn't gushy enough, there's even more:

"The Splunk App for AWS has been essential to Eastman Chemical's journey to becoming a cloud-first company," said Matthew Campbell, senior systems analyst, Eastman Chemical Company. "We collect and analyze virtually every AWS data source using the Splunk platform. Together, Splunk Enterprise and AWS Cloud help us be more proactive against security threats such as phishing, offer better availability to improve the customer experience, and analyze historical data to develop forward thinking security practices. Using the Splunk App for AWS, we are more proactive with real-time monitoring to understand who created an environment, when an instance was stopped or started, and if any specific activity triggered a security alert."

But gushy customer quotes are one thing; real hard product news is another.

Splunk announces a cut-price offering for small IT environments

Usually when a company grows, it moves up the food chain to ever-larger customers. Splunk is bucking that trend somewhat with Splunk Light, a lightweight version of its platform designed for smaller IT environments.

The idea of Splunk Light is that smaller IT teams, and even developers themselves, can gain access to Splunk for only $3 per day. Of course, the big unsaid part is that Splunk hopes and assumes that this low-level usage will see many of these customers sign up for higher priced plans.

Alongside Splunk Light, the company is also announcing a new version of its SplunkApp for AWS. The app offers a prebuilt set of dashboards and reports that compare different operational, security and billing insights.

MyPOV

In terms of the product announcement, this feels more like a case of Splunk having to deliver something for AWS, rather than anything particularly earth-shattering. That said, a new announcement, no matter how minor, is an excuse to generate some buzz and re-engage with people at the show.

In terms of the customer wins, I take the customer quotes with a grain of salt. Still, there is no arguing that top-shelf customers such as these will impress both investors and prospective customers and should help generate some more sales to (hopefully) keep Wall Street quiet.

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