New Relic aims to be your dashboard of the future

Promises to keep private and public and cloud software in synch

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Can you talk some more about your New Relic Infrastructure product? What are the problems that's intended to solve?

It comes out of an acquisition that we made last November with a great company called Opsmatic who had done incredible work around understanding and solving the new problems of managing infrastructure in today's modern, dynamic environment. First of all, our customers don't think of their infrastructure as a one-server-at-a-time thing anymore. They think of them as groups of EC2 instances or Azure instances that may come and go based on the needs of the application or what's going on in the customer's environment. It's super important for our new Infrastructure products to be able to automatically and dynamically report on the aggregate activity of groups of servers and be able to alert on them -- or groups of virtual instances -- I should say, and alert on them in a smart way.

One customer using our Infrastructure product has 20% of their EC2 instances turn over every day. With traditional monitoring products, you'd have to set off new alerts for the instances that come in and you'd have to not alert on the instances that went away. When instances come in with EC2 tags or these other attributes that are already designated as the server type, you want to monitor them in a consistent way. It's that dynamicity that's unique.

The second part of what’s special about New Relic Infrastructure is monitoring in real time the state of what's really configured on that machine. There are tools our customers use to try to ensure that all these servers are consistently configured -- but then there's reality. Reality is that over time some servers drift in their configuration. You might have an old version of a library that might have a security patch like the Heartbleed bug. With our infrastructure product, if you have 10,000 servers, you can see which of them have a weird version of a library that could be a security hole. We will also be able to show what changed, who logged into the server when, what did they change, what configuration file did they change and correlate that to an application problem.

The number one cause of application problems and outages is configuration issues. Somebody changed something. They had good intent but it had negative impact. Now we can see all of the changes going on across all the instances that are running in a cloud environment and correlate it to the application performance and the user experience.

As customers embrace containers or microservices and move more of the workloads into public infrastructure as a service, I'm sure there is a lot from all the data you collect that would help them optimize operations.

That's right. We feel like there's a lot of opportunity there in doing more with the data we collect. All of the data is going into one cloud database we call NRDB, incredibly powerful. I talked a bit about how it does the aggregation just-in-time when you run a query -- and we're putting more and more types of data into that very same database. That database is showing browser performance information. It's going to have application performance information. Now it's going to have server health and config information, all in the same database, Synthetics information. Over time, we imagine getting smarter and smarter with the data we collect so that the customer has more and more incentive to put more stuff into NRDB because it has the complete picture of everything and that there will be more smarts operating on it.

Having grown up working at Network World, I've talked to lots of management companies and they love to talk about providing analytics that are used by the business side when in reality they're used by the 3.5 people that you mentioned earlier. Are you really focusing on broadening the usefulness of your tools so that line-of-business-folks would actually use these? Do you envision some kind of business dashboard that people could use?

We're seeing it today. I'm the business leader of New Relic. I use New Relic Insights to answer business questions 10 times a day. I've already done it nearly 10 times today. I just came out of a meeting with a Fortune 10 company where they sent a bunch of their execs down to learn more about New Relic. Before I walked in the meeting I said -- How many people use our products? What products are they using? Where are they based? Is their usage increasing? How familiar are they with the breadth of our product offering? I came into that meeting fully informed about my customer. It was all based on New Relic Insights.

We have customers doing that. The trick, though, is we can't push our customer into that vision on day one. We need to start with the basics, making sure you have a good, solid, stable application that delivers great service levels. Then you move to the next stage, which is to get a handle on your customer experience in mobile, application performance and health, and the browser application and health -- and then you get to answering business questions. That's our ultimate opportunity and it will take a while to get there. Why do we think we have a chance of doing it? We think more like a consumer tech company in certain ways. We're an enterprise software company but we care about monthly active users. We care about stickiness and retention and other metrics that companies like Facebook talk about all the time. We believe that if more people use our software it will be more valuable to them. The more people who use our software more times per week, the easier it will be for us to have a great business relationship with them.

I want to stick on this business theme for a minute. You talk a lot about digital transformation. What do you think businesses and business leaders are missing the boat on today when it comes to digital transformation?

The biggest challenge is the cultural change going from [the notion that] software is this defensive, cost-cutting thing that sits in the back office to the idea that software is the new front door of the company. There needs to be a more agile approach to how things are built. It's also requiring, again, this team sport of having multiple stakeholders involved. It's hard for a lot of enterprises to change their culture to be okay with deploying multiple times a week in a large system that has a lot of business criticality. Our tools help there because we watch every deployment like a hawk and we can understand how things differ once you've deployed and whether or not it's a bad deploy. You combat fear and conservatism with data. If that data is in real time, it's getting all the stakeholders onboard with a common point of view, then that really fosters an environment where that cultural change can happen.

One of the other things we've seen over the years is that when companies start off in a particular slice of the management area -- whether it's network management, security management, application management -- that the growth challenge is expanding beyond a single focus or a single niche. What is your growth strategy? What are the problems you envision helping customers address down the road?

I think we've overcome one of the most important hurdles by becoming a multi-product company. Something like 30% to 40% of our customers are multi-product customers and we've shared some good metrics to show that we have gone far beyond APM in our business. That's one thing. We're in the early innings of our growth strategy. We've got good news and good news about having 40% of the Fortune 100 as customers. The good news is it's 40 of the Fortune 100 and the better news is we've got another 60 to go. The average enterprise customer spends about $60,000 a year with New Relic, although we have well more than 15 customers that pay us more than a million a year. We certainly have demonstrated our capability to deliver seven-plus digits of value to customers over time. They typically start with us departmentally or on one project and then as that project grows and as they consume more products, they increase their investment in New Relic.

Given that the average spend in that segment is only $60,000 a year, we feel like there's immense upside just in our customer base alone and we keep adding so many customers. Then there are so many product adjacencies we can be pursuing. This data can be very valuable for security use cases and, in fact, at New Relic our security team uses Insights to detect when somebody is not doing normal things in our software, like a certain user that typically logs in from the U.S. [and] all of a sudden that user ID is logging in from China. We have an opportunity to look at security. We're about to announce that Infrastructure will double our total addressable market by going after the infrastructure management space. We're not constrained by market opportunity or our adjacencies. We're really constrained about our ability to just capture the demand for this incredible market that we're in.

Talk about New Relic's most important partnerships. Who do you consider to be the absolute key partners that are helping you bring this product and the vision to life?

I feel like it's our cloud platform providers, our essential partners and cloud providers like Amazon and Microsoft and, to an extent, IBM. They see New Relic as a very important partner because we can de-risk the move from an on-premise environment to a cloud environment. We can see the application's behavior in a traditional host environment and we can see that very same application's behavior in a cloud environment, and we can give the customer confidence to put more stuff into their clouds. We love being the leader in monitoring workloads that run in these cloud environments.

Copyright © 2016 IDG Communications, Inc.

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