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  • TechStrong TV: Sumo Logic Goes the IPO Route

    TechStrong TV: Sumo Logic Goes the IPO Route

    Sumo Logic has come a long way, becoming a public company with its IPO of 14.8 million shares at $22 per share. In this  TechStrong TV interview Christian Beedgen, CTO and co-founder at Sumo Logic, joins Alan Shimel to discuss all the hard work that lead to this major accomplishment.

    Transcript

    Alan Shimel: Okay. Big special event today here on TechStrong TV devopsy.kinsta.cloud. I’m Alan Shimel. Thanks for joining us. Our guest is Christian Beedgen. Christian, for those who don’t know, is the CTO/co-founder of Sumo Logic and it’s certainly a big day for Sumo Logic and all of their people and customers as well as the DevOps world. Hey, Christian. First of all, congratulations.

    Christian Beedgen: Thank you very much. Thanks for having me, sir.

    Shimel: Thank you. So Christian, you know, today is a – no matter how you slice and dice it, this is a major milestone, a major day for the Sumo team. Of course, everyone, you know, they see an IPO and they say, “Oh, another one of these dot com tech startups,” but what they don’t – you know, they don’t realize the blood, sweat and tears that gets us – that gets one to today. Why don’t we start off by – give us – you’re a cofounder – give us the history of Sumo.

    Beedgen: Yeah. So look, we started in 2010. Our hypothesis was that – your machine data analytics in the widest sense was sort of right for disruption and sort of a thing that we felt we could bring to the table was this insight that this type of product had to be taken away from sort of the classic enterprise software delivery model where a bunch of developers write code and then throw it over the wall and customers are sort of stuck with installing and running it and basically turn it into software-as-a-service. So Sumo Logic is a machine data analytics software-as-a-service offering. We got there from our own experience, like doing security analytics and security information and event management at ArcSight

    I ended up being an early employee there – so was my cofounder – and we kind of went through growing up with that company and did basically SIEM for nine years. It became very successful itself, and towards the end it became clear that we ended up just spending way too much time talking to our customers back then about how to kind of – you know, how to sort of take care of the system rather than actually using it, right? And then so the system servers were supposed to be there to monitor for various things. Same with Splunk at the time, right? You know, monitor the uptime reliability and security and becoming these giant systems that somehow needed to be maintained, and then you could actually – you had a hard time monitoring themselves, right?

    And so I think we turned all our security people into vendor storage admins and all that, but like that was just not cool, right? We felt that by turning it into software-as-a-service that was going to be a much better story because we don’t just end up building the product; we’re also running it, which we feel we’re probably better equipped than 2,100 customers are right now or whatever number of customers we will have in the future.

    Shimel: Yeah.

    Beedgen: So that was sort of the basic idea, right? And so it started with us putting together a scalable org management backend. So folks could _____ their logs. We initially focused on application monitoring, et cetera, use cases, so more sort of on the operational analytics side. But right away folks started using that part of the product for security stuff as well just because it really solved the problem pretty elegantly and they could just put in the data and get insight out of it, and we kind of kept adding to it and over the last 10 years, fast forward through various trials and tribulations we managed to establish that SaaS was a valid delivery model for machine data, that it was a valid delivery model for this type of analytical platform, that folks that need to keep their systems reliable and secure can easily rely on a SaaS solution and that it is in fact a better solution, right?

    And that kind of what brings us to today. We ended up going back into security bigtime over the years as we matured and felt that – you know, the thing is in a startup is you’ve got to have some amount of focus in the beginning, but we always knew the security stuff was very interesting. It was always part of the plan. We were lucky to grow the company and get to the level of maturity where we could then double down in that we made two acquisitions to speed that up. We have a cloud sim in the market today and so that’s kind of how we got there, right? And I think maybe sort of the biggest hurdle that we jumped over there was going back to the initial days, sort of the doubters, the people who thought it couldn’t be done, which if you don’t have those then your idea’s probably not good enough, right

    Shimel: Absolutely.

    Beedgen: Then ArcSight came around the block and Hugh and his folks back then just basically proposed that you could do real-time correlation on security events. People also say I’m crazy; I can’t do that, right? So we kind of learned from that a little bit, and we said, “Hey, you know, that’s – we’ll use that as positive energy.” And the thing to overcome really was the idea that we could do it as a service, this incredibly large scale data processing, which now in the light of cloud-based, cloud-delivered data lakes and so forth it’s now much more commonplace, but 10 years ago it wasn’t and that was not an easy sell necessarily and for people to even take you seriously

    But the other thing also was as a SaaS a customer has to basically jump over that hurdle of realizing that their data is now managed in a software-as-a-service solution and not necessarily on prem anymore. We did a lot of work early on to sort of figure out how to make that work for our customers, right? And I think ultimately a combination of that and the fact that the product is just compelling managed to get us to sort of really put our hook in the market in the first couple of years, and we had the opportunity to sort of grow out from that

    Shimel: Absolutely. Look, ArcSight was a great product in its time. I’m from the security world, right? It was – you know, in the age of sim it was the high water mark. I think certainly though what you were able to kind of capture lightening in a bottle with Sumo was to build that next generation of what you could do with an ArcSight in a cloud, SaaS-based environment, but at the same time it wasn’t all about security

    I think, as you mentioned, Splunk kind of touched on this, some of the others, but you also were able to ride what we call the DevOps, this whole wave of DevOps and now we’re calling observability and monitoring and so forth to capture data, not just pure security feed, but all kinds of data that people are interested in, doing it in an uber scalable way by using the cloud and SaaS which really brought down the cost versus your average ArcSight investment was a couple hundred thousand dollars, right? So you could do this in the cloud much cheaper and it allows you to do more, right? Because now it’s not prohibitive to capture more data, analyze more data. It’s not cost prohibitive. And so Sumo really becomes what we can do with today’s technology and using what people think are important today; and look, kudos to you guys for recognizing it, building it, capitalizing it, and here we are today

    Right? So I’ve got to ask you this. So personally – right, ArcSight never went public. ArcSight, for those who may not know, was acquired by HP for a nice penny back then, right? But it never had – you never did this whole IPO thing. How does it feel

    Beedgen: We did actually  –

    Shimel:  Oh, really? I don’t remember.

    Beedgen: Yeah, we did. No, actually what happened was that the company actually went to – this was actually super interesting. So ArcSight, like leading into 2008, I think kind of passed a sort of revenue bars and those various things and in the end they actually went public. They just about managed to squeeze out in I think it was February 2008, and it was a tough environment even then, and then of course went completely to shit, you know, later in 2008, but even so it was – you know, being there it was quite a rollercoaster. It taught me a lot of things, including not actually refreshing the stock price on a daily basis or even on an hourly or minute basis. I probably just look at it once a month or so, you know, because sometimes you’re not going to like what you’re seeing

    But early in 2009 recovery kicked in, Obama came around and this sort of cybersecurity speech and people started believing in cyber in particular again and people started looking for investments, and they put money into ArcSight. Stock came up to actually I think, you know, quite a nice level, and then what happened was in late 2010 – I was not with the company anymore at that time. I exited in late 2009 to then start focusing on what eventually became Sumo, right? HP actually did pick them up, so yeah, so they were public for about two years.

    Shimel: About a year.

    Beedgen: Yeah.

    Shimel: You know what? It’s long enough ago I forget. But how does it feel today?

    Beedgen: Oh, it’s complicated, right? It feels good, obviously. You kind of like zoom into that a little bit more. It’s a little bit overwhelming. There’s a lot that kind of goes in that there’s this sort of – there is a sense of release when this finally happens, and we always thought that this was a company that had – you know, given the market was pretty well figured out and we always thought that if we managed to execute properly then this was a company that from the beginning would stand a chance to actually go to this level, and so a lot of this kind of like coming through, kind of proving itself today.

    But, you know, the reality is it had actually been proven out year over year already, right? And so I feel that, as I’ve said in the past, it’s kind of a marathon but the marathon metaphor sort of implies that there’s a end, but if you kind of build and continue to build a successful company it’s actually an infinite race, right? But even so there are lapses and there are markers and milestones and all of that, and for everybody – of course I don’t want to downplay it, you know, being – becoming a publicly-traded company is a huge milestone, right? It’s beneficial it gives us a chance to sort of raise more money and use that money to continue to kind of do what we do more and better, and it does also provide – you know, it creates wealth on some level for hundreds and hundreds of people that have been working their butts off to get the company to where it is, and I think – let’s not forget that that’s also sort of – you know, that’s really your _____

    Shimel: That’s what it is, it’s value to the shareholders and the employees are some of the shareholders there. Christian, I know it’s got to be a busy day for you. You’re all the way in Germany and it’s probably been a busy, busy morning and day there. I want to first of all congratulate you and the whole Sumo team, right? I mean it’s – this is – no company goes public on one man’s back, right

    Beedgen: Oh, it’s true. [Laughs]

    Shimel: As you mentioned, right? It’s – and it is a lot of hard work. These are not overnight successes. We wish you the best of luck. We also – look – you know what, Christian? This is a beacon for other companies in the space, in the DevOps space, in the security space, to see that, you know what, it can be done

    And the team at Sumo, you know, took their lessons from ArcSight, built a better mousetrap, a better solution, a solution for today, and you’re being rewarded for it and rightfully so. So congratulations to you and all of the Sumo team on your IPO. We’ll be – we’re not going to watch the stock price every hour either, [laughs] but –

    Beedgen: It’ll be fine. It’ll all be fine.

    Shimel: Yeah, you guys do what you do and everything else will take care of itself, right?

    Beedgen: That’s kind of how – that’s what got us there and we’re not gonna change that. [Laughs

    Shimel: Absolutely not. Hey, congratulations.

    Beedgen: Thank you very much.

    Shimel: Come back and join us soon. Hopefully we’ll be able to see each other in person soon one day.

    Beedgen: That would be great. That would be great. Anytime.

    Shimel: We’re tired of being in the house. Alright. Christian, Beedgen, CTO/cofounder of Sumo Logic on their IPO today. This is Alan Shimel for TechStrong TV Digital Anarchist. Thanks, everyone.

  • DevOps Deeper Dive: IPO Frenzy Heralds Consolidation

    DevOps Deeper Dive: IPO Frenzy Heralds Consolidation

    A spate of initial public offering (IPOs) has resulted in billions of investment dollars being poured into JFrog, Snowflake and Sumo Logic and is likely to fuel of wave of merger and acquisition activity in the months ahead.

    While each of these software companies addresses fundamentally different IT requirements, they are all tapping into a massive amount of liquidity now available, as investors dump the stocks of companies in other sectors that have been adversely impacted by the economic downturn brought on by the COVID-19 pandemic.

    In fact, the reason all these IPOs appear to be occurring all at once now is the plans to go public that many software companies had earlier this year were delayed by the onset of the pandemic. The backlog for potential IPOs is already staggering. Currently there are more than 400 private startup companies with valuations in excess of $1 billion, which according to the financial research firm CB Insights officially makes them “unicorns.” Familiar names of software companies on that list include GitLab, Docker Inc., HashiCorp, Snyk, Postman, OutSystems, Digital Ocean, Auth0, Redis Labs, Databricks, Collabra, Cohesity, Tanium, Rubrik, SentinelOne, Illumio, Netskope and Kaseya.

    The reasons IT organizations should pay attention to these IPOs are twofold. The first is that it signals the company now has ready access to a stream of investment dollars required to fund ongoing innovation, said Scott Bickley, principal research director at Info-Tech Research Group.

    The second, he noted, is that many enterprise IT organizations tend to limit their amount of reliance on a startup company. Venture capitalists that fund these companies often sell them to other companies to recoup their investment as an alternative to launching an IPO. Most enterprise IT organizations don’t want to wake up one morning to discover a key vendor has been acquired by a vendor they would prefer to not do business with, said Bickley.

    That issue can be especially problematic when cloud service providers such as Amazon, which has operations that reach well beyond IT, are involved, he added.

    In fact, one of the reasons many organizations prefer to rely on IT vendors that are public companies is they have a lot more visibility into the overall viability of the vendor, said Bickley.

    “Assessing risk is part of the due diligence process,” he said. “With public companies, there’s a lot more data available.”

    Of course, public companies do get acquired. The fact that they are public companies usually makes the effort a comparatively expensive proposition, depending on the stock price and the number of shares outstanding.

    However, one of the first things many companies do once they go public is to look to acquire other companies that enable them to expand their overall portfolio, said Mitch Ashley, CEO and managing analyst at Accelerated Strategies Group, a market research firm.

    The DevOps sector in particular has seen a wave of acquisitions of late that have been funded in part by IPOs, noted Ashley.

    “We’re in a bit of a roll-up period right now,” he said.

    Many enterprise IT organizations tend to welcome those acquisitions because it allows them to deal with fewer vendors, Ashley noted, adding support also tends to improve because the larger vendor typically has more resources.

    On the downside, he said, large vendors tend to raise prices after acquiring smaller vendors in part to help cover the cost of the acquisition.

    Like it or not, however, mergers and acquisitions are now a fact of IT life that organizations just need to accept, Ashley said.

    Based on the amount of capital available at the moment, IT leaders should also assume the pace of merger and acquisition activity is about to accelerate, even more as more fuel in the form of capital is added to the fire.

  • JFrog Sets Future Course Post-IPO

    JFrog Sets Future Course Post-IPO

    Another milestone in the march toward mainstream adoption of best DevOps practices was reached this week, with JFrog becoming a public company.

    JFrog CTO Yoav Landman said the funding that the provider of a continuous integration/continuous development (CI/CD) platform is receiving from investors is a clear vote of confidence in DevOps. The next major DevOps challenge will be finding ways to further automate the distribution of software across what is rapidly becoming a much more extended enterprise now that IT organizations are embracing various types of edge computing platforms, he said.

    JFrog CTO Yoav Landman

    The injection of funding will be used in part to enable JFrog to address that challenge through a combination of internal product development and inorganic acquisitions, said Landman. The last few years have witnessed a wave of consolidation as providers of DevOps platforms expand their reach into adjacent categories.

    At the same time, Landman said IT teams should expect to see JFrog investing more in various forms of artificial intelligence (AI) to further accelerate software development and deployment.

    JFrog, as a leading proponent of DevOps, has been making a case for focusing specifically on application binaries rather than just source code. The building and deployment of application binaries is at the root of any digital business transformation initiative, noted Landman. As such, any organization that now views itself as some type of software company needs to master DevOps processes to succeed.

    That requirement is also accelerating the rate at which CI and CD processes need to converge, he added. Most organizations that have embraced DevOps tend to master CI. CD has proven more challenging because each platform on which software is deployed is unique. JFrog addressed the challenges associated with CD first via its JFrog Artifactory platform before adding on the CI tools required to automate DevOps processes on an end-to-end basis.

    In general, Landman noted there is now more focus on software supply chains as more organizations come to appreciate how dependent they are on applications to differentiate themselves from competitors. That issue is one of the main reasons the senior leadership of more companies are becoming more aware of the processes required to build and deploy quality applications consistently across an expanding number of platforms. In fact, it’s conceivable there might one day be more software running on edge computing platforms than in either local data centers or public clouds.

    JFrog reportedly has more than 5,800 customers currently. It’s not clear to what degree organizations that have already embraced DevOps might be willing to replace their CI/CD platform or, in some cases, consolidate the multiple CI/CD platforms they already employ. However, as the number of organizations that are embracing best DevOps practices continues to grow there appears to be plenty of opportunity for providers of CI/CD platforms to grow as well.

  • Q&A: Michael Beckley, CTO/CCO, Appian

    Q&A: Michael Beckley, CTO/CCO, Appian

    Recently I had the chance to speak with Michael Beckley, chief technical officer and chief customer officer at Appian, about his company’s move to go public and the DevOps space in general. For those of you who don’t know Michael, he is a founder of Appian and leads the company’s technology vision and oversees customer initiatives worldwide. He also serves on the Industrial Advisory Board for the University of Virginia’s Computer Science Department and is a member of the University of Maryland Advisory Board in Computing. He has an interesting take on the IT space and DevOps in particular. Read on for our discussion.

    Alan Shimel: Michael, what do you think has been the “special sauce” that has led to Appian’s success to date?

    Michael Beckley: With Appian, companies build unique business applications up to 20x faster and mobile-enable and modernize existing systems. For example, a company like Ryder was able to build a web and native Android tablet application that cut the time it took to rent a truck in half.

    But the “special sauce”? That’s Appian’s culture of innovation. Our engineers think long-term and invest in breakthrough tech like our patented SAIL UI technology for zero code native mobile apps. Thanks to SAIL, the web apps you configure in Appian automatically deploy to iOS and Android as native, full-featured apps or specialized micro apps we call “Sites.” As long as we get the culture right, we expect to continue to deliver enduring value for our clients.

    Shimel: With becoming a publicly traded entity, some companies have found “managing to the street” does not match their own long-term business plans and their customers needs, how does Appian avoid this?

    Beckley: Companies, like people, are an aggregation of their habits. Appian’s habit has always been to hold to our long-term vision of enabling every company to be a software company. We are not your typical Silicon Valley tech company. Our roots are in DC, we largely bootstrapped this business, and learned to be good stewards of capital while helping to support the core missions of federal agencies and some of the world’s largest brands. The proceeds following this IPO will be invested back into our business to benefit our customers.

    Shimel: What do you see post-IPO being the biggest areas for growth as it relates to new products and services?

    Beckley: We  plan to invest in innovating and enhancing our platform. While our platform is industry-agnostic, we have recently made, and plan to continue to make, investments to enhance the expertise of our sales and marketing organization within our key industry verticals of financial services, health care and government. We have made, and will continue to make, investments in research and development to strengthen our platform and expand the number of features available to our customers. As we continue to increase the functionality of our platform and further reduce the amount of developer skill that is required to build robust applications on our platform, we believe that we have the potential to expand the use of our platform.

    Shimel: Digital transformation is a term that is being used a lot these days. How far along the adoption curve are we on digital transformation?

    Beckley: While many speculate that digital transformation is just a tech industry buzz word, in reality, digital transformation is a living, breathing effort. According to a recent survey, digital transformation is a C-level priority and is considered a top focus for almost 50 percent of all companies this year.  From Appian’s perspective, we believe that the utilization of low-code software to drive digital transformation is still relatively new and our customers will be able to succeed in their digital transformation efforts by incorporating low-code development.

    Shimel: Where does the DevOps market intersect with the Appian business model?

    Beckley: Organizations are turning to DevOps to accelerate development and bring an application’s capabilities to a user quicker. The Appian low-code development platform fits into the DevOps model and supports the seven major DevOps categories including code, build, test, package, release, configure and monitor.

    Overall, our business model supports the DevOps market; we’re living in a world where citizen developers are playing such an important role in the enterprise and our platform empowers the citizen developer while alleviating developer resources to focus on the more challenging, business-critical developer work.

     Shimel: What about containerization and microservices? How do these technologies affect Appian?

    Beckley: Appian already uses containers and microservices. Appian’s enterprise customers often require a mix of cloud, hybrid cloud, and on-premise installations. We view containers and microservices as enabling technologies to support the diverse workloads and deployment models required by our enterprise clients.

    Shimel: What about security? What challenges does cybersec pose to Appian’s development of their platform?

    Beckley: Appian works with some of the nation’s most important and highly regulated industries, therefore we have built a comprehensive security and compliance structure that meets several industry standards. We frequently undergo third-party audits to ensure that we are always operating effectively to protect our customer data.

    — Alan Shimel