This is my fifth company as CEO and I’ve really come to enjoy working in B2B enterprise software – the proverbial “picks and shovels” end of our industry. In particular I enjoy innovating in spaces that may not be immediately obvious and typically overlooked in the mad gold rush of today’s frothy venture capital scene. And what I’m most proud of is when it’s done well, you can create companies that solve important problems, make an industry-wide impact, and have long lasting value – as evidenced by another company I led, Boomi, and its recent sale to Francisco Partners and TPG for $4 billion more than 20 years after its founding.
When I joined Circonus two and half years ago, I saw that same sort of potential: a massive market with lots of complexity and a company with incredible tech and an amazing team. Like application and data integration, monitoring may not seem all that flashy to most but there is enormous potential for innovation and value creation here. And I can sum up that potential in one observation: the amount of data being generated in the world today is growing exponentially – some say it’s doubling every 7-8 months and we estimate that the amount of telemetry data (the metrics, events, logs, and traces being generated by applications and infrastructure) is growing even faster. Data has surpassed oil as the most valuable asset on the planet. The typical enterprise is practically drowning in telemetry data and only tapping a small percentage of its potential value. Imagine if they could tap into all of it…
From the beginning we set out to help enterprises harness the vast potential of telemetry data – to remove all the roadblocks and barriers to the best possible observability and intelligence – and leverage that data to improve operations, deliver high quality digital services, and gain competitive advantage. We call it Monitoring Without Limits™. With today’s announcement of our Series B, we took another major step forward in the realization of that mission and I could not be prouder of the Circonus team and what we’ve accomplished over the past couple years.
When people think of monitoring, they generally think of performance monitoring e.g., is a service up or down and is it performing as expected, and, if something’s broken, it’s about conducting root cause analysis and minimizing downtime. It’s a crowded space with lots of overlapping vendors and solutions and you’d be forgiven for thinking that perhaps it’s a space that’s already been played out. But nothing could be further from the truth.
Why do I say that? Three things:
- Technology will continue to advance at its unrelenting pace. I remember thinking how cool mid-range computers were compared to mainframes. And then I thought how could anything be cooler than client-server architectures. And then mainframes became servers and data centers became the cloud and the network became the computer. And in the last decade alone we’ve seen the advent of virtual machines, containers, microservices architecture, serverless, and edge computing. We’d be foolish to think we’ve reached the bounds of what’s possible in tech. Work is already underway to redesign computer chips, design fundamentally new architectures, introduce 6G networks, and deliver the next generation of the internet itself with Web 3.0.
- The world will continue to automate, digitize, and become ever more interconnected. It’s been estimated that within the next 15 years, there will be a trillion connected computers and devices on the planet. And that was before the coronavirus pandemic dramatically accelerated digital transformation initiatives globally. Digital transformation will continue unabated as enterprises seek to achieve ever greater productivity gains, innovate product offerings, and uncover new sources of competitive advantage. Organizations have moved from needing a “web presence” in the 90’s to being a fully digital and integrated enterprise today. Saying that infrastructure and applications are at the heart of the enterprise is almost to understate it – in many, many cases (think B2B2C) that infrastructure is the business which means system performance equals business performance.
- The barriers between the physical world and the virtual will continue to fall. Perhaps more than we even realize, tech has become an integrated and increasingly indispensable part of our lives. As systems and applications proliferate, the criticality of the functions they perform has also increased dramatically, especially as they begin to spill over from our digital world to our world “in real life.” It’s one thing when that “web presence” website is down, it’s quite another when your supply chain is down. With the evolution of the Internet of Things, edge computing, and 5G networks, the line between what is virtual and what is physical becomes harder to see. When hackers can use computer systems and networks to disrupt gas pipelines on the east coast of the United States (Colonial Pipeline Company incident) or disrupt nearly 1/5 of the world’s beef supply (JBS USA incident), or potentially shut down the entire U.S. power grid, is there any real difference?
All that to say, “monitoring,” broadly defined, is no longer a nice to have. In this new digital economy, the reliability and performance of our digital infrastructure is easily as important as our physical infrastructure (roads, bridges, rail lines etc.) perhaps even more important. Moreover, and perhaps I’ve buried the lede here, the telemetry being generated by that digital infrastructure is an incredibly rich source of real-time business intelligence and insights.
We’ve seen that firsthand at Circonus. In today’s press release, Frank Pellitteri, Vice President of Technology at Xandr, talks about ingesting a quarter billion metrics a minute and using that data to identify potentially fraudulent activity on their advertising platform. We have a customer using telemetry to create tissue paper so fine they call it “digital tissue.” Another customer uses telemetry to monitor electricity usage in apartment buildings. They can detect when a new appliance is added, in which apartment, and even what type of appliance it might be. And one organization we worked with used incredibly high-frequency telemetry to optimize its oil drilling operations.
These are just a few examples. The possibilities of telemetry intelligence, across all industries including media, advertising, healthcare, transportation, utilities, manufacturing, and many others, are boundless. Collectively, the real-time telemetry being generated by nearly every modern business in the world is actually giving rise to “instant economics” as recently described by The Economist: “The world is on the brink of a real-time revolution in economics, as the quality and timeliness of information are transformed.” We have only begun to scratch the surface of what telemetry can tell us – it is an entirely new frontier of business intelligence and Circonus is at the forefront.
Which brings us to today’s announcement of our Series B. Obviously we are thrilled with the investment – the fresh capital will allow us to further expand our industry-leading performance capabilities, drive even greater value for our customers where we already enjoy net revenue retention well north of 100%, and add new talent to our amazing team. But it’s also about the partnerships, networks, and experience we gain as well. I’m excited to partner with Joanna and the team at Baird Capital and looking forward to having Joanna join our board. We are also grateful for the continued enthusiastic participation of all of our existing investors including NewSpring Capital, Osage Venture Partners, and Bull City Venture Partners. Brian, David, and Jason – thank you for your continued trust and counsel.
And as always, thank you to the awesome team at Circonus for all your hard work and dedication and to our amazing customers for your continued support – we could not be here without you. I’m excited to take the next step of the journey together with all of you.