tldr: No. At least not yet….
Sumo Logic is presenting its IPO this week. Yes, the world may be plagued by a pandemic, forest fires, chaotic weather with temperatures of 100 degrees and snow (same day yes), but let’s take a break to consider the future market battle between Sumo logic and Swollen. Vesuvius may explode and spread fire in our face, but as we go into our extinction, we must very much check our log data, stocks, and IRR growth.
So we go.
We have now agreed that we are all data boars collecting and saving every bit and byte, logs, streams and streams. (Here is my last post about Snowflake and its meteoric growth). We are addicts and hoarders in one. Both Sumo Logic and Splunk do the same thing – they collect all the data and allow it to be more or less analyzed.
But all of Sumo Logic is SaaS, and Splunk is still moving to SaaS. So can the new IPO child in Sumo Logic be a strong competitor to Splunk? Given that both play a total of $ 50 billion in the targeted market, according to Sumo Logic’s S1, I am sure there is room for more than one player.
Splunk started early, but was an on-prem product. “It was almost eight years ago when I first saw the Splunk product – I was overwhelmed,” said the company’s $ 4 billion vice president of engineering. “It was a well-designed product, and we loved it.”
Those of you who are old enough may remember that Splunk began as data that swallowed a dinosaur that later turned into a dexterous bird flying in these hybrid clouds. I had a laugh when I dug it S1 proposal from 2012 month of January. Splunk has identified SaaS as a risk, saying that if customers require software that provides operational intelligence using the Software-as-a-Service business model, it could negatively impact the company’s business. I am convinced that the founders of Sumo saw such an opportunity and jumped in time. However, Splunk has become the first cloud company without compromising its growth rate. It now stands at $ 1.93 billion. USD ARR (Q2 2021). Its the most last earnings call 2020 September. Doug Merritt, CEO, shared that annual recurring revenue (ARR) from SaaS subscriptions is growing by about 50%, and 53% of all his orders are now subscriptions. This increase is not a trivial feat. Making this shift while maintaining growth is like replacing an airplane engine at 30,000 feet.
Splunk now raises $ 1 billion from cybersecurity USD ARR
Nearly 50% of Splunk’s revenue comes from cyber security offerings. (The rest comes from tracking other business areas and applications in its IT areas). Sumo Logic’s security business has potential, but it’s too early to say how it will play with its cards. First, the company acquired JASK (in which I was an investor) and, together with it, acquired a modern stand-alone SOC platform and several well-established security leaders from Arcsight, Anomali and Netflix.
Splunk, meanwhile, is getting ready, and the latest offering is Mission Control, a unified SaaS platform released in 2020. In the second quarter. “Mission Control” can help with advanced detection and investigation and simplify cloud security operations processes. Much remains to be done as the complexity of safety data sources continues to increase. Dhiraj Sharan, founder of Query.ai (in which I am an investor), said: “Splunk has clearly demonstrated its kits in the security market, but security data remains fragmented across products and platforms.”
A Panaseer has conducted a survey of more than 200 security leaders shows that enterprise security teams spend an average of 36% of their time manually preparing reports, but 89% of these organizations are concerned about the lack of visibility and insight into reliable data. Grunt’s work involves extracting, transferring, cleaning, and merging data, as well as performing, formatting, and presenting calculations. Security leaders are concerned that their team’s productivity is being negatively impacted by the time spent reporting, the survey shows.
COVID winds and price wars
COVID has accelerated the growth of most cloud and technology companies, and I’m not a genius at saying that Splunk and Sumo will be beneficial in the medium term. As a SaaS offering, Sumo has an integrated advantage, and Splunk is catching up fast. Splunk’s Merritt company said in a recent profit call that the company would reach its 60% revenue target for the cloud package two years ahead of schedule.
In anticipation of price wars, Splunk switched to a new pricing model. Data volume pricing has caused a lot of heartburn for customers, and it is now moving to pricing based on instances. As a strategy, the company played its hand very well as the first step folded the cream. Now that others are entering the arena and customers are tired of running out of costs, Splunk is moving towards exemplary prices. This will help retain customers in the short term. Splunk also has a significant advantage over Sumo with integrations and well over a thousand applications, firmly embedded in the ecosystem. Rapid production innovation (it can offer machine learning across the platform) and the customization of open source offerings give it an advantage in the long run.
But in the meantime, the growth in the amount of data, the complexity of data types and sources, and the different security measures in the market will create many opportunities. This benefits all players in the sector.
Mahendra Ramsinghani is Safe octane, investing in cyber security and cloud infrastructure companies such as Query.aiCyberGRXand Accurics He is the author of two books Venture capital business and Launch boards (co – author with Bradas Fieldas).