Enterprise systems management software is hard.
“OpenTracing doesn’t solve the interoperability problem, so what does the “open standard” attempting to solve? Well, for one thing, is that it allows those making gateways, proxies, and frameworks the ability to write instrumentation. That should, in theory, make it easier to get traces connected, but once again the requirement to change implementation details for each tool is a problem.”
Original source: Misunderstanding “Open Tracing” for the Enterprise
“Microsoft’s vision is to deliver tools that can offer a holistic view of services to application architects looking to optimize their software; performance information and debugging capabilities for DevOps and ops pros; insight into KPIs for executives; and information about customer usage to product owners. Microsoft doesn’t yet have a cohesive offering for all of the above, but it has the pieces to enable it and has begun delivering on some integrations across products.”
Original source: Microsoft gets serious about monitoring
Based on the S-1 filings from the business, a $3.7B price implies a 17.3x enterprise value/trailing twelve month revenue multiple, which is 41% higher than the next nearest acquisition, Salesforce/Demandware. There’s no comparable pricing event in the M&A market in the last 10 years.
And, from Simon at The Register:
The Borg’s plucked the company mere days before it was expected to float on the stock market, an event expected to raise around US$1.4bn for a portion of the company.
While AppDynamics could point to over 2,000 customers and nine-figure revenues, it also had rather a lot of red ink to deal with. That’s Cisco’s problem now, as it will make AppDynamics a software business unit in its internet of things and applications business.
Source: The Biggest M&A Multiple in Software History
From Nancy Gohring:
In 2015, Dynatrace recorded $466.6m in revenue, including $30m from services and $60m from SIGOS, the mobile network-testing company that Keynote acquired in 2006. Dynatrace’s APM revenue was $376.6m, representing 15% growth over the previous year, and making it twice as large by revenue as two of its primary competitors – New Relic and AppDynamics.
She writes fine reports.
Source: Dynatrace tackles integration of Keynote and Ruxit
“In 2015, the worldwide application performance management software market grew an estimated 12.1% over that in 2014, in large part because of increased demand for a new generation of solutions designed to support DevOps and multicloud infrastructure initiatives,” explains Mary Johnston Turner, research vice president, Enterprise System Management Software. “This new generation of APM solutions is easier to implement, supports more sophisticated analytics, and is less expensive than earlier offerings. As a result, APM is providing value to a much wider range of developers and IT operations teams that need constant, current visibility into end-to-end application performance and end-user experience.”
The previous y/y was 12.7%, so things are going well in that market I’d say. As I recall, this includes mainframe and other “not normal” revenue. If you look at just the subset market of x86 and web apps, it’s even higher around 17%. That “distributed” APM TAM was estimated at $2.2bn in 2014.
I don’t have access to the full APM report, but the size is around several billion. One Gartner estimate put it around $2.6bn in 2014.
See also this vendor share commentary based on Gartner’s analysis of the APM market.
Source: Worldwide Application Performance Management Software Forecast, 2016–2020