Lew Cirne admits he’s a little odd for a Canadian. The CEO of New Relic sports an exuberance that he admits is utterly unlike his compatriots to the north.
As he describes the new direction of the company he’s taken from zero to 90,000 customers in six years, his words practically bounce around the glass walls of his office that offer a floor-to-ceiling view of San Francisco’s Bay Bridge and Treasure Island.
An Ontario native, born to English ex-pats, Cirne is 44. His office is decorated with the trappings you’d expect of a computer nerd of a certain vintage. On a shelf under two large wall-mounted monitors sit a pair of artifacts that date the onset of Cirne’s software coding interests to the early 1980s: A beat-up Commodore VIC-20 from about 1981, and an Apple Macintosh IIcx, circa 1989, which he used in college.
Software has been his life. And New Relic — an anagram of his name — is on a roll. Wednesday it announced the general availability of the product it had called Rubicon. In an age where software can so often create the competitive edge that allows one company to out-maneuver another, Rubicon has morphed into a new product called Insights.
Born on a coding binge he undertook during a “vacation” to the beaches of Mexico’s Cabo San Lucas last summer, Insights is a cloud-based service that pivots out from New Relic’s original Application Performance Management business — basically watching software run and looking out for problems — and into the wider world of analytics.
Analytics is one of those hot business terms that when combined with the another buzz-phrase du jour — “big data” — basically boils down like so: If you can gather enough information about how your business is running, you can analyze that data to find patterns you would have otherwise missed, and learn from them. You might find an opportunity you didn’t know existed, or you might find something that has been holding you back.
This “data driven” philosophy of business is a fashionable one and has long been a strategic tent-stake of large IT giants like IBM, SAP, Oracle and Informatica. Yet New Relic’s approach has opened the coffers of Silicon Valley venture capitalists and private equity firms like Insight Venture Partners, T. Rowe Price and Benchmark to the tune of $175 million over six years. (An IPO is considered likely sometime in 2015.)
The practical problem with analyzing big data is that it’s hard. People have trouble figuring out how to do anything with it, let alone draw meaningful conclusions about how to change the operations of a business for the better. The questions are never obvious because the data is so dense.
Cirne is quick to demonstrate that it can be easy. Sitting at a conference table he gestures to one of those big screens on the wall. It’s displaying, in real time, the number of New Relic users who are signed on to the service at that moment. Some are free, and some are paid or “pro” users.
He types a few characters. “This is the combined number of users on our site since five minutes ago,” he says. “Let’s see how many pro users read a page on our site in the last five minutes.” Instantly the number shrinks down. A few more characters changes the query to the number of pro users who signed on in the last week. Then the last month.
Last year, New Relic customers used the service to track a few billion software events a day. Now it’s more like tens of billions a day, adding up to more than a trillion events every month.
And by “events,” Cirne means anything that can happen in software. It could be a purchase on a commerce site, or a simple click from one Web page to another. It’s like a heart monitor for any business that uses software or the Web to get anything done.
The queries are crafted in a language Cirne calls NRQL, or New Relic Query Language, which he hopes will “become the lingua franca of big data and analytics.”
If it sounds like he’s aiming high, he is. At its core, New Relic hails from the dull-sounding world of Application Performance Management, or APM. Basically, it’s monitoring software as it runs for performance problems, bugs and other data to help make sure it keeps running smoothly.
Cirne’s first company, Wily, was an APM company. And in 2006 he sold it to CA for $375 million. It’s essentially, Cirne says, a business about controlling costs and finding efficiencies. Not very exciting.
What’s exciting? Growing a company’s sales. It’s a thoughtful pivot, and one that you wouldn’t necessarily expect, until you consider that most companies are, in some way, software companies. Nearly every function of a business — its sales, supply chain arrangements, payments, marketing, advertising and so on — is increasingly controlled by software. Tracking not only how that software runs, but how people use it is fundamentally important to the operation of any business.
And New Relic’s customers are getting it. Cirne cites the view of his new chief revenue officer — Hilarie Koplow-McAdams, recently lured away from Salesforce.com: “Her assessment is that we are awash in opportunity, and we are under-invested in covering it. So we’re hitting the gas in order to grow.”
And the opportunities are getting consistently bigger. One big software company with several hundred thousand employees — he wouldn’t name it — tapped New Relic to create a clear view of all the software companies it had acquired over the years. “It’s a company that has made several acquisitions, and they want a simple way to have visibility into them all.”
More opportunities came after New Relic’s role in helping detect and fix the errors in the troubled Healthcare.gov was documented in a government report. Cirne can’t say anything about it, but its role was well covered last December when the company was name-checked in the report. Once the people behind the beleaguered site started using New Relic, the problems started to get sorted out.
The way Cirne sees it, APM is a smaller portion of the global market for IT management tools, a market Gartner pegged as being worth about $18 billion last year. “I have respect for that market, but it’s really about reducing cost and automating tasks and improving efficiency.”
Once you start monitoring your Web applications, you can start asking questions about your customers. The more you know about your customers — where they click, what they buy, what they don’t, when they visit, what country they’re in, how much they spend — the more you understand them. The more you understand them, the better your chance of keeping them happily buying. “We’ll help you find your best 10,000 customers and help you sell specially to them,” he says. “We can help you find the customers at risk of leaving and create something special to hold on to them.”
That gets New Relic out of the office of the CIO and into the office of the CEO. Rather than shrinking costs, it becomes about growing sales. It’s exactly what IBM promises, he says. “Except when IBM does it, they do it with an army of consultants,” Cirne said. “What we do is easy.”
But don’t expect New Relic to advertise against Big Blue just yet. “We have to be more subtle than that,” Cirne said. Rather than go toe to toe with IBM or SAP and Informatica, he wants New Relic’s Insights to sneak in through the back office where the programmers and IT staff are using it. From there, his hope is that it spreads throughout a company to anyone who needs access to any real-time data. “Over time we’ll be drawn into more and more use cases and more people will be using it.”
Cirne grins. “I want to sneak in quietly. I want to be more Canadian about it. Under-promise and over-deliver.”