New Relic reinvents its products to bring observability to the mainstream

APM pioneer New Relic relaunches its flagship offerings today as a single product with a new user interface and pricing model. Following on from its open-sourcing last week of several foundation technologies, today's announcement sees existing modular offerings replaced by the full-stack New Relic One observability platform, priced per user rather than per server, and with a free-of-charge entry-level tier. It's a radical reimagining, says Chief Product Officer Bill Staples:

As the company who created APM, we're going to be the ones to end it. We're declaring that all of our existing products and pricing are now deprecated. They're gone. We're introducing radical simplicity to the observability space.

Existing customers need not be alarmed. Their New Relic instances will continue to work as before, but whereas a customer might previously have licensed just the APM or infrastructure component, from today they will have visibility across the full stack. Staples explains:

The change of experience is ... pretty dramatic because, as say, an APM customer, when you land in the new experience, it's fresh, it's modern, it's new. It's updated visually, and it now includes access to the full stack visibility .... you can see that full spectrum of the digital stack, and work together with your other engineers and engineering teams to understand and quickly pinpoint when things go wrong.

Although it's a big change, the company has taken care to make sure existing workflows aren't disrupted, he says, adding that customers have responded positively during extensive pre-launch testing.

We know that our users are using our software in really critical moments. They usually jump into it when something's going wrong, and they need to quickly troubleshoot and address problems. And so we've taken extreme care to not disrupt the current workflows, and help customers migrate smoothly.

So all of their existing URLs continue to work, all of their existing workflows continue to work, [with] no migration on their part, no updates or deployments or configurations.

When they land in the experience, all the existing muscle memory they have of where to click has been preserved.

New pricing encourages wider instrumentation

The new pricing model will also bring no unwelcome shocks, he claims, with costs working out roughly the same for most customers. The per-user pricing will typically account for 80% of the total in the new model, the company expects, with the remainder based on the volume of telemetry data. Since customers typically know how many engineers they'll have during the year, the company believes this will provide more predictability while allowing customers to add in systems they may have missed out in the past. Consumption costs in the new model are "an order of magnitude or more lower cost than any other observability vendor," says Staples, which will encourage customers to instrument all of their systems:

By lowering that barrier to collecting the data, there's a lot of incentive for customers to instrument more, because it's just incremental costs — pennies per gigabyte, literally — so they can eliminate those blind spots.

And then, with the full stack observability licensed per user, we're giving them more software, They don't have to purchase APM separate from infrastructure, separate from mobile or browser monitoring, they get it all at once. That will drive more usage because now, instead of using a competitor commercial product, or an open source product that they have to self-host or manage, they just get access to everything. They can increase their usage over time, and consolidate tools.

So why has New Relic decided to push aside its 12-year-old APM product in favor of an observability platform? It's all to do with the "explosion of complexity" that businesses have had to deal with, Staples explains, as they've become more dependent on digital technologies. This has led to a proliferation of tools in addition to APM, including infrastructure monitoring, logging and digital experience monitoring, which New Relic is now consolidating into a single stack.

The solution that we introduced 12 years ago, while it is and has been world-class, it's now one among many different, fragmented solutions to run a modern business. And so we're taking the lead once again, to declare that it's a new chapter in observability. We're giving giving every enterprise now that full stack visibility they need for one predictable price, rather than having to have their engineers jump through hoops and manage lots of different tools and data.

While observability has been trending as a term in the software engineering field, many vendors have treated it as a simple rebranding of monitoring, says Staples. New Relic's definition comprises three fundamental components he explains — visibility across the entire software stack, the use of artificial intelligence to help detect, understand, and resolve incidents, all running at scale on a high-performance distributed data platform:

If you can't bring all of the different types of telemetry into one place, then you're not solving the customer problem, which is the fragmentation of tools and data. We believe we're the only company that has that kind of at-scale, high-performance telemetry data platform.

My take

This seems like a bold move by New Relic, effectively telling its customers that the APM product they grew up with and for which the company is best known is no longer adequate for their needs. Of course it's still there, but now as just one of many components in an expanded platform. The calculation New Relic has taken is that it's better to disrupt its own product line and market, than let someone else come in and do it.

There's also a sense in which New Relic is going back to its roots by making this platform free for single-user accounts, up to a generous 100GB of telemetry. New Relic first got established by making its APM product free for entry-level accounts. Can it repeat the same trick in the observability era?

Over the past two years there have been times when New Relic has seemed on the back foot compared to fresher, younger names. But it has been using that time to build out its capabilities by a mixture of in-house development and acquisition. Today's news even provides extra context for the departure of nearly 20 engineers last month, when New Relic merged its site engineering team with its core technology platform team. The company has been preparing to bounce back with new vigor, and the hiring, among others, of Staples after several decades running engineering teams at Adobe and Microsoft is a sign of that optimism.

This could be exactly the right time to pitch an observability platform. Go back a few years and observability was something that only digital native leaders such as Netflix were building in-house. Roll forward to today, and while it's not hit the mainstream yet, observability is no longer solely the preserve of bleeding edge technologists. It's emerging as something that's regarded as an essential part of the digital engineering toolbox, which suggests the time is right to package it up as a platform for broader adoption. New Relic has spotted the opportunity to establish itself in that role. A bold move indeed, but one that could prove very astute.