Cloud Monitoring Market: Too Crowded?

You know it, I know it... and everybody in Silicon Valley knows it. The IT monitoring market has seen a major shift. We've gone from merely monitoring PCs and servers... toward monitoring on-premises and cloud applications, using a range of new dashboards. The irony? I wonder if too many cloud monitoring startups are getting funded.

One recent example is SignalFX, which has raised nearly $30 million over the past two years or so -- and emerged from stealth mode earlier this year. The company claims it has built a modern monitoring platform that offers streaming analytics.

SignalFX certainly isn't alone. Appedo announced $1 million in funding for an application performance management in March. Datadog raised $31 million in Series C funding back in January 2015 -- hoping to provide one dashboard for all monitoring. And a lengthy list of additional players -- in touch with After Nines Inc. -- hopes to emerge from stealth mode late this year.

IT management's next wave looks like a crowded ride. New Relic has already gone public; AppDynamics hopes to pursue an IPO; and Boundary raised its latest round of venture funding in 2014 -- though an unexpected CEO change at Boundary surfaced this year. (See our podcast archive for interviews with a range of CEOs in this market.)

FIGHTING FOR AIR IN THE CLOUD

Still, the IT monitoring market -- shifting toward the cloud model -- has gotten very crowded. I sense that a shakeout is coming. Within the next 12 months, I think it will become increasingly difficult for IT monitoring startups to raise money.

As Yogi Berra once said: "Nobody goes there anymore. It's too crowded."