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IT Operations Analytics are hot – Splunk IPO

by Jonah Kowall  |  April 21, 2012  |  9 Comments

With all of the buzz created in the past few weeks from the investment community around the IPO of Splunk and the pricing this week there is a renewed interest in these tools. Finishing the week up 108% and with a market cap of $3.35b compared to the initial pricing of $8-10 revised to $11-13 and moved to $17, this bidding war caused it to open at $31 to the general public. The reason this IPO is very hot is not only due to the fact that they do solve some complex problems, but the technology is salable and very easy to use. There are multiple use cases for them, some of which warrant the high license prices. The main buyers use case is for IT troubleshooting, which often is difficult to justify given the expense of the solution at scale. There are higher value business use cases which do warrant the high prices paid for the software. While splunk creates a very open platform for building views, analysis, and overall usability of unstructured IT data they do not help you locate and extra that high value data. There are other solutions on the market, but none have the stickiness or usability that Splunk has for the IT Operations market.

With competitors that have something unique and innovative that Splunk doesn’t they are all built and only run as Software as a Service (SaaS) in the cloud these include both Loggly and Sumo Logic. Loggly has a direct use case for development and the target is being embedded into Platform as a Service(PaaS) deployed applications. Sumo Logic on the other hand does target Splunk directly, but with some unique capabilities which Splunk cannot do being data center bound and restricted to a single company. These differentiated features include the tuning of parsing and analytics based on customer usage both across the entire data set they host as well as between users in a single company data set. This allows them to provide a constantly tuned product based on analysis of the usage of the product itself. This opens the door for some innovative technology, which I look forward to seeing evolve. Splunk has been working on a cloud version, with the beta being launched in August. There have been incremental improvements over the past several months, but it offers a subset of Splunk functionality without any real innovations beyond what the enterprise product can currently do. I expect more focus on this product from Splunk, and hopefully we have better competition in the cloud than what we have seen the market produce for on premise or enterprise solutions.

Category: analytics  

Jonah Kowall
Research Vice President
3.5 years with Gartner
20 years IT industry

Jonah Kowall is a research Vice President in Gartner's IT Operations Research group. He focuses on application performance monitoring (APM), Unified Monitoring, Network Performance Monitoring and Diagnostics (NPMD), Infrastructure Performance Monitoring (IPM), IT Operations Analytics (ITOA), and general application and infrastructure availability and performance monitoring technologies. Read Full Bio

Thoughts on IT Operations Analytics are hot – Splunk IPO

  1. […] We also happened to have met with Jonah Kowall from Gartner last week. His thoughts can be found here. Both articles touch on our firmly held belief that evolution cannot and will not stop, and that in […]

  2. Very timely post Jonah. Couple of questions:

    1) Where do you think expectations will go – unrealistically – in terms of the value and impact of IT Operations analytics tools like this go as the media and investor community get overhyped about this?

    2) Where do you think a vendor could go – as a “next thing after Splunk” to take this space to the next level, both in terms of sizzle and practical use?

    Perhaps you alluded to that with metrics beyond IT operations (to the business), but I wonder about other use cases for mining large data sets of unstructured data that would make for a sizeable (vs niche) market.

  3. Julian C says:

    Hey, this is Julian from **********. If you are looking for an easy-to-use service for centralizing, managing and analyzing your log data, check out our free account at http://**********.com. We have built the service for the cloud so that you can get to the important data you need, in seconds, at a very cost-effective price. Let us know your feedback or technical questions.

  4. […] comes from San Francisco-based Splunk SPLK , who went public in 2012. Technology analysts frequently compare the two companies when talking about the log-management space and its […]

  5. […] comes from San Francisco-based Splunk SPLK , who went public in 2012. Technology analysts frequently compare the two companies when talking about the log-management space and its […]

  6. […] comes from San Francisco-based Splunk SPLK , who went public in 2012. Technology analysts frequently compare a dual companies when articulate about a log-management space and a […]

  7. we have seen the market produce for on premise or enterprise solutions.

  8. the market produce for on premise or enterprise

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