Lew Cirne knows his place. Or rather the CEO of New Relic knows his company’s place:
Being application-centric places us at the most strategic layer of the digital stack, the closest to the customer experience.
And that’s a great place to be, he argues:
Visibility into this complex layer is paramount for our customers, looking to drive top line growth for the digital investments. We do this better at scale than anyone in the market. Now what’s really interesting today is that our target customers are rapidly adopting modern technologies at the infrastructure layer. Micro-services, serverless computing, containers and cloud computing - all of these technologies in service are running their application code. It’s critical that they have complete visibility all the way from the mobile application or browser through the application running in the cloud and down to the underlying infrastructure.
New Relic yesterday turned in some Wall Street pleasing numbers - Quarterly revenue was $114.9 million, up 36% year-on-year, while non-GAAP operating income was $9.7 million. Customers paying more than $100,000 per year now number 786 accounts, up 34% year-on-year.
Those customers tend to have three common challenges, says Cirne:
The first, cloud adoption to enable teams to have more autonomy in scaling their infrastructure; second, DevOps to offer teams greater agility to deliver great products to market; and third, delivering a flawless digital customer experience to build their digital brand and impact their bottom line.
With the US mid-term elections taking place yesterday, Cirne points to USA Today Network as a prime example of the type of enterprise customers New Relic is working with, in this case to ensure that it can meet peak traffic demand moments as election results come in:
Inside the USA Today Network war room, New Relic dashboards help their team monitor the customers’ experience on mobile, browser and video on-demand. On election night and everyday, USA Today Network is deeply focused on the integration of technology and business performance metrics. They have turned to New Relic’s rich data to provide insight throughout their business, monitoring everything from modern technologies like Kubernetes, beginning visibility into their advertisers’ performance on over 100 media properties. USA Today Network differentiates itself by delivering superior content and a modern digital experience, and New Relic underpins the technology innovation at the core of this strategic effort.
Enterprise customers now account for over half of the run rate (56%), says Cirne:
As that increases, enterprises have much more demand and we’re just such in the early innings of our enterprise journey within these customers that there’s just much more upside in those accounts, and so that helps immensely. What we’re also seeing as a secular trend in our market is a desire to standardize on a single platform to see everything. So our enterprise customers are frustrated with having to switch between multiple tools to have a comprehensive view of what’s going on in the digital environment. They want to standardize on a single platform and they love that our platform is application-centric.
He adds that it’s still early days when it comes to penetrating the enterprise market, which means there’s a lot of opportunity ahead:
The demand is there. The demand is rich. Enterprises recognize that in order to be relevant and to win in their various areas of business, they have to succeed with digital. It’s not an option and it’s an increasing of their brand.
Another strong quarter and every reason to assume that this will continue to be the case. Cirne has a very clear idea of the target market for New Relic and the firm is focused on addressing that and doing it well. It’s a pragmatic approach that’s succeeding.