New Relic CEO Bill Staples sees more opportunities for the IT monitoring software company to work with MSPs (managed IT services providers). And in the cloud services provider market, it sounds like New Relic will strive to extend beyond Amazon Web Services to more closely engage Microsoft Azure and Google Cloud Platform opportunities.
No doubt, New Relic's business is in transition. The company pitches IT monitoring, cloud performance management and observability software to DevOps, IT professionals and MSPs. New Relic typically competes vs. Cisco AppDynamics, Datadog, Dynatrace and SolarWinds, among other rivals.
New Relic's software is widely deployed by enterprises and leveraged by some MSPs. But fast-growth upstarts such as Datadog have leapfrogged New Relic (in terms of growth rates) with simple consumption models that support cloud infrastructure, application and other types of monitoring.
Additional rivals continue to evolve their businesses as well. Among the moves to watch: Cisco acquired Epsagon for application monitoring capabilities on August 13, 2021.
Amid the shifting competitive market, New Relic unveiled a simplified business model in April 2021, vowed to fix some weaknesses with MSP partner engagements in May 2021, and shifted the CEO post from Lew Cirne to Staples in July 2021.
New Relic: Three Business Priorities
Fast forward to an August 2021 earnings call, and Staples reinforced three priorities for New Relic. They include:
- Return revenue to market growth rates.
- Complete the company's migration to a new business model.
- Grow the number of paying customers through self-service engagements as well as partnerships.
Digging a little deeper on that third point, Staples described how New Relic wants to increasingly engage cloud service providers (CSPs), MSPs and channel partners. Among his statements:
"When we think about a go-to-market channel for us, we think broadly across the set of partners that we have today as well as new partners that we want to nurture and grow. Starting with cloud providers, we obviously have a strategic partnership with AWS, but increasingly, our customers run in many clouds and want to see New Relic available and partner with the other major cloud providers as well."
Translation: Watch for New Relic to potentially engage Microsoft Azure and Google Cloud Platform.
New Relic: MSP Partner Opportunities, Business Growth
From there, Staples shifted the conversation to MSPs:
"We see MSPs as an existing partner channel as well that works for us today, and we increasingly want to invest in to nurture more business going forward. And we did some business through other reseller channels and ISVs through technology partnerships. We have a team looking at that as well. And so when I think about partners, it's a third leg of the stool that I expect will continue to contribute to New Relic's growth in the quarters ahead."
Amid the partner push, New Relic's overall business is showing signs of progress. For instance, the company's revenue was $180 million in Q1 of fiscal year 2022, up 11 percent from Q1 of fiscal year 2021, according to an August 3, 2021, financial statement. Also, the company as of June 2021 had 964 customers that spend at least $100,000 annually with New Relic, up from 882 customers at or above that spending level at this time in June 2020.
