The Snowflake IPO has sucked up much of the attention for IPOs this week. Yet there are various other deals worth considering.
Take a look at Sumo Logic, which is a pioneer of Continuous Intelligence. The company’s software helps organizations with a myriad of challenges like security, digital transformation, cloud computing and analytics.
As for the IPO, the company issued 14.8 million shares at $22 each, which was above the $17-$21 range. The stock price ended the day up 22% to $26.88.
While the company was started in 2010, the journey has actually been much longer. The co-founder and chief technology officer (CTO), Christian Beedgen, had tried to build a similar platform while at ArcSight. But the technologies were just not mature enough. Keep in mind that there was a need for a true cloud-native platform that could leverage AI (Artificial Intelligence), microservices and agile development.
So then how does the Sumo Logic system work? Well, even though the core technology is extremely complicated and sophisticated, the platform is relatively easy to use. There is no need to hire armies of consultants or to engage in extensive retraining of employees. Consider that the vision of Sumo Logic has been to democratize machine data.
Here are just some of the things you can do with the system: troubleshoot and monitor applications across the cloud and on-premise environments; test and resolve security threats; and track KPIs (key performance indicators). All this can be done by spinning up dashboards.
Now at the core of the Sumo Logic platform is the ability to ingest enormous amounts of data. Currently it scans an average of 873 petabytes per day and 18.6 billion events per second! This is how the technology can provide insights in real-time.
“We address three fundamental things,” said Ramin Sayar, who is the CEO of Sumo Logic. “First of all, we support all data types. Two, we allow for ubiquitous access for those who are technical and non-technical, from the developer who writes code to those from the finance group or the customer success department. Three, we know that customers want an economic model to match the business model of the cloud. In doing so, our innovation in our tech has allowed us to innovate with licensing and pricing, so customers do not have the headache and cost of building and managing software.”
The cloud-native platform has also been essential for the AI strategy. “We deliver AI/ML as a service, so that we can determine and detect patterns in the data to reduce the time it takes to get an answer to a problem” said Sayar.
No doubt, the growth for Sumo Logic has been strong. From fiscal year 2018 to 2020, revenues went from $68 million to $155 million.
And how big is the market opportunity? It’s truly massive. Sumo Logic estimates the size at nearly $50 billion.
Driving this is the megatrend of Digital Transformation, which has been accelerated due to the COVID-19 pandemic. Just about any business needs to be digital—or else wind up being disrupted. This means deploying modern architectures like componentized and distribute workflows, using multi-cloud deployments, having top-notch security, and having access to data-driven intelligence.
“There is a two trillion dollar technology shift that is going from the data center to the cloud,” said Sayar. “But digital transformation is not only about the cloud. It’s also about building modern applications and having organizational processes that allow for change.”
Note: You can check out my Zoom interview with Ramin Sayar here.
Tom (@ttaulli) is an advisor/board member to startups and the author of Artificial Intelligence Basics: A Non-Technical Introduction and The Robotic Process Automation Handbook: A Guide to Implementing RPA Systems. He also has developed various online courses, such as for the COBOL and Python programming languages.