

New Relic And Hortonworks See Strong Public Debuts - ynotgiant
http://techcrunch.com/2014/12/12/new-relics-ipo-spikes-31-in-initial-trading/

======
trjordan
There's always mixed feelings when a competitor goes public.

I work for AppNeta, and while we directly compete against New Relic, I love
what they've done for the market. Their competitors were these clunky, on-
premise, hard-to-use, didn't support Ruby / Python / PHP / node.js apps, and
they've built a beautiful service that's legitimately easy to use. A lot of
the data is available from CA or Dynatrace, but it's so much harder to set up
and use.

Monitoring so commonly focuses on server metrics, or outside-in uptime, or
logs, and I really do think that monitoring transactions end-to-end is an
important part of the picture. Day to day, New Relic is absolutely the
competition, but in the big picture, there's a lot of big companies using
technology that's 15 years old because somebody like New Relic or AppNeta
hadn't come along yet.

Glad to see that the market likes them as well. There's awesome stuff
happening in Application Performance Monitoring (APM), and if you're not
already using something like this, I strongly recommend you look at AppNeta,
New Relic, ... and not really anybody else, because the rest haven't really
figured it out yet.

~~~
tomdale
_and not really anybody else, because the rest haven 't really figured it out
yet._

I beg to differ there. ;) I work on Skylight
([https://www.skylight.io](https://www.skylight.io)) which is definitely doing
some interesting stuff in the APM space.

By focusing on just Rails, we are able to provide features that other services
that try to be a jack-of-all-trades frequently miss. For example, we just
rolled out a feature that helps you monitor memory usage in production with
extremely low overhead[1], which I don't think is something any of our
competitors offer.

But yeah, definitely agree that New Relic has been a market leader here.
They've validated that people are willing to spend real money on improving
performance, something that wasn't obvious just a few years ago.

1: [http://blog.skylight.io/announcing-memory-
traces/](http://blog.skylight.io/announcing-memory-traces/)

~~~
GrinningFool
Conversely by focusing on just rails, you effectively eliminate large swaths
of the enterprise market. There's a huge opportunity there for someone who can
integrate across platforms and technologies, particularly if you can ship a
behind-the-firewall solution.

~~~
wycats
Another Skylight founder here.

Focusing on Rails lets us build a really awesome end-to-end solution that
works out of the box. Building an intuitive, explorable interface means
constantly considering the application's context, and I can attest to the fact
that every time we do UI, nitty-gritty details about how our customers build
their applications can often become the dominant consideration. When I use
general-purpose solutions that are designed for "all languages and platforms",
I am often very frustrated by the resulting lowest-common-denominator APIs and
UIs.

We may eventually build versions of Skylight for other platforms, but if we
do, we will apply the same level of care and design for other platforms as we
have done for Rails. Among other things, that will mean having team members
who have written large applications in those platforms, and letting those team
members drive the APIs and design for those platforms.

~~~
GrinningFool
Sounds like a promising future, and the only sane way to approach that level
of integration.

------
rdegges
I just wanted to say that I'm a huge NewRelic fan, and really happy for
everyone I know who works there.

I've met Lew Cirne before (their CEO), and he's not only an incredibly nice,
down-to-earth guy, but an awesome programmer as well.

It was really inspirational (and fun!) to go to the NewRelic Futurestack
conference last year -- everyone I bumped into was super awesome, friendly,
and really loved their jobs.

For the past 4-years (ish), I've been using NewRelic in 100% of my personal
and professional projects, and couldn't be happier. Really love everything
they're doing -- it's a solid product, and a solid team.

------
relaxatorium
Thinking about New Relic vis a vis a potential startup bubble makes me think
about the old saw about the gold rush where most of the people who got rich
were the ones selling pickaxes rather than gold miners.

On the other hand, in the current startup economy the pickaxe bubble is almost
as big as the gold mining bubble, but I think it still probably applies more
than it doesn't.

~~~
bcantrill
I take it you weren't around for the Dot Com Bubble? I can't tell you how many
times I heard this repeated -- and used to justify lofty valuations for
infrastructure companies. CSCO, JNPR, ORCL, INTC, EMC, NTAP were all "selling
pickaxes" \-- none of those valuations ever recovered. And those are the
companies that _survived_ ; many companies "selling pickaxes" perished through
either bankruptcy or (more frequently) fire sale acquisition. There is
emphatically a valuation bubble; it will burst; when it bursts, essentially
all will suffer -- and life will go on.

Disclaimer: I worked for SUNW "selling pickaxes" before, during and after the
Dot Com Bubble, I told myself this lie -- and vowed to never tell it to myself
again.

~~~
relaxatorium
I was not, and for that matter, am not really participating in this one either
except as an observer.

I wonder if there's a difference based on how many of those companies were
selling mostly actual hardware infrastructure, which has just gotten cheaper
and more commoditized over time, versus those which had actual differentiated
software.

Both still got hit hard of course, a bubble's a bubble, but I wonder who did
substantially worse?

~~~
infinite8s
This time around the software is getting commoditized (with open source).

~~~
firebones
There were some open source software players back then [1].

VA Linux (now Geeknet) was near a $10 billion market cap [2] in trading
immediately following its IPO. After several pivots and renames, it's market
cap now is just $50 million.

RedHat went public at about a $1 billion valuation (raising $100 million), hit
about $3 billion in trading after the IPO open, and has steadily grown to
about a $10 billion cap over the last 15 years.

Meanwhile, today Hortonworks ends the day with a cap over $1 billion, and a
couple of competitors in the wings that may also be doing IPOs at some point.

It's not that Hadoop and Linux are even comparable, but it's really hard to
see from a 2014 vantage point that the Hadoop market will be as disruptive
over the next 15 years as it would have been to see Linux disrupting in 1999.
So Hortonworks and its ilk fall more in the space of advanced enterprise
software--a more comparable relative temporary winner from that era was BEA
Systems (which also had a spectacular rise and dramatic fall--amplified
because they were a company that was disrupted by free software, and suffered
due to unsustainable expectations). [3]

[1] [http://www.cnet.com/news/10-years-gone-the-va-linux-
systems-...](http://www.cnet.com/news/10-years-gone-the-va-linux-systems-ipo/)

[2]
[http://www.theregister.co.uk/1999/12/10/ipo_makes_va_linux_i...](http://www.theregister.co.uk/1999/12/10/ipo_makes_va_linux_instant/)

[3]
[http://online.barrons.com/articles/SB998410322172345858?tesl...](http://online.barrons.com/articles/SB998410322172345858?tesla=y)

------
toolz
Can someone explain how deeply unprofitable companies can go public and
somehow do well? I understand that companies are able to pull Mitt Romney's
and do terrible things to make money with companies that were losing money
every year, but how does it happen that people want to buy stock of a company
that is losing so much money? Do I even want to know?

~~~
briandear
With New a Relic revenue growth rates are greater than the increase in loss
rates. I bought a few hundred shares of New Relic because the financials are
actually very strong. There's a lot more going on than simple profit/loss
statements, it has to do with rates as opposed to simple hard numbers. As
successful as Amazon is, they STILL aren't profitable, yet I bet everyone here
wishes they had Amazon IPO shares.

The Mitt Romney comment is rather ignorant. There are many, many major
companies that were rescued by Bain. A simple minded view of that industry is
to do a discredit to the companies that thrived because of Bain. Staples,
Guitar Center, Dominoes Pizza, the list goes on. If it weren't for Mitt
Romney, there's be dozens of companies that would have simply gone bankrupt.
Business isn't around to be a public service, it's sole purpose is to make a
profit; with those profits, they are able to provide people with jobs. If
Apple didn't make a profit and closed down, imagine how many people in our
community would be out of a job. Profit provides an incentive to operate. I
don't make a living writing computer code for charity; our livihoods depend on
profit, like it or not.

------
leesalminen
Congrats to the folks at New Relic. I use their service daily, and find it to
be invaluable.

