This is technology M&A deal number 268 that ChannelE2E has covered so far in 2021. See all technology M&A deals for 2021 and 2020 listed here.
The big question: Will ServiceNow leverage Lightstep to potentially compete against such application performance monitoring (APM) platforms as Cisco AppDynamics, Datadog, Dynatrace, ManageEngine, New Relic, SolarWinds and more.
Frankly it's too soon to say. But here's the clue: When Lightstep raised $41 million in Series C funding, the company in 2018 described itself as an APM software provider.
ServiceNow Acquires Lightstep: Potential ITSM and APM Synergies Explained
Fast forward to present day. Lightstep's software provides application monitoring and observability capabilities to DevOps teams, the company says. Key Lightstep customers include GitHub, Spotify, and Twilio, the seller adds.
Lightstep, founded in 2015 and based San Francisco, is led by CEO Ben Sigelman, COO Ben Cronin, and Chief Architect Daniel Spoonhower. Lightstep team members include Google veterans who co-created both the OpenTracing and OpenTelemetry open-source projects, the seller says.
The ServiceNow-Lightstep deal will allow customers to "more easily monitor and respond to critical signals and indicators of software health using Lightstep’s capabilities with ServiceNow’s IT workflow solutions," the buyer says.
ServiceNow Acquires Lightstep: Executive Perspectives
In a prepared statement about the deal, Pablo Stern, SVP, IT Workflow Products at ServiceNow, said:
“Companies are betting on going digital in order to thrive in the 21st century, but the transition is often challenging to navigate. With Lightstep, ServiceNow will transform how software solutions are delivered to customers. This will ultimately make it easier for customers to innovate quickly. Now they'll be able to build and operate their software faster than ever before and take the new era of work head on with confidence.”
Added Ben Sigelman, CEO and co-founder at Lightstep:
“Today, observability primarily benefits the DevOps teams that build and operate mission-critical apps. We've always believed that the value of observability should extend across the entire enterprise, providing greater clarity and confidence to every team involved in these modern, digital businesses. By joining ServiceNow, together we will realize that vision for our customers and help transform the world of work in the process – and we couldn't be more excited about it.”
ServiceNow expects to complete the acquisition in Q2 2021.
ServiceNow: From ITSM to APM and RPM
ServiceNow has expanded aggressively beyond ITSM through organic R&D plus acquisitions. In addition to the Lightstep APM deal, ServiceNow acquired Intellibot in March 2021 for robotic process automation (RPA). That move set the stage for potential competition Automation Anywhere, Blue Prism, UiPath and Microsoft Power Automate, among others.
MSPs, meanwhile, have been adopting ServiceNow to offer co-managed services to midmarket and enterprise customers. Amid surging ServiceNow deployments, M&A activity among ServiceNow partners has been strong.