Datadog is the monitor and analytics platform for developers, IT ops and business users.
Product
Cloud monitoring SaaS platform
- Infrastructure agent: $23/host/month
- Log management
- $0.10 per GB scanned / month
- 15 day retention: $1.70 / 1 mm log events / month
- APM
- $31/host/month
- DB monitoring
- $70/db host /month
- API/browser test
- $5/10k runs/month
- Incident managmenet
- $20/user/month
- Real time user monitoring
- Browser $0.45 / 1000 sessions/month
- Session replay: $1.8/ 1000 sessions /month
- Mobile: $0.045 / 1000 sessions / month
- CI visiblity
- CI pipeline: $20/user/month
- Testing pipeline visiblity: $20/user/month
- Serverless
- $5/1million invocations
- Network monitoring
- $5/host/month
- Security monitoring (logs)
- $0.02 / gb / month
- cloud security posture
- $7.50/host/month
- cloud workload seucirty (hosts/containers)
- $15/h/month
Business model
- Subscription based (monthly or annual), prepay expected usage and pay more for incremental usage
- Pay per usage
- # of hosts or volume of data indexed
- Logs product: pay per log event indexed and events ingested
- land-and-expand business model
- low implementation costs, self service model
- Short time to value
- Revenue
- sale of subscription to customer on cloud products
- paid per usage and revenue recognized when used
- Cost of revenue
- 3rd party cloud infra
- Personnel for ops and global support
Core Metrics
- Revenue F21: $940M expected (+55% YoY)
- Q3 Total Revenue: $270M (+66% YoY)
- Q2 Cost of Revenue: $63M (+103% YoY)
- Gross profit: $176M (+58% YoY)
- Gross margin: 75% (80% last year)
- Customers:
- Customer >$100k: 1,800 (+59% YoY)
- 82% of ARR
- ACV: $467k
- Customer > $1M: not reported
- Customer >$100k: 1,800 (+59% YoY)
- Net dollar retention: 130%
- 75% of customers using more than 1 product (68% last year)
Analysis
I haven’t used the product yet but can see how it can be useful to have out of the box managed system to introspect logs for all containers/hosts. There are currently lots of out of the box free open source solutions but they are tricky to setup and manage.
Datadog is currently expensive at 60x revenue, estimate ~2.7B revenue in 3 years at $50-80B valuation (1.5-2x upside)