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Sumo Logic joins the enterprise software IPO parade, raising $326M to watch over the cloud

Modern cloud infrastructure is extremely complicated, and keeping track of all the moving pieces requires tools like Sumo Logic's that monitor cloud application performance and security.

Sumo Logic CEO and President Ramin Sayar

After listing at $22 a share Wednesday evening, shares of Sumo Logic opened at $26.64 Thursday during its initial public offering on the Nasdaq.

Photo: Sumo Logic

It's almost impossible to understate the complexity of managing a modern cloud infrastructure deployment, even at huge companies with hundreds of expert engineers. Sumo Logic wants to be the alarm system for the cloud, and just raised $326 million to further its monitoring efforts.

After listing at $22 a share Wednesday evening, shares of Sumo Logic opened at $26.64 Thursday during its initial public offering on the Nasdaq. The shares closed at $26.88, valuing the 10-year-old company around $2.6 billion.

"There's a huge tailwind for the general way that we're thinking about things," said Christian Beedgen, co-founder and CTO, in an interview with Protocol on Thursday. As we saw Wednesday with Snowflake and JFrog's well-received IPOs, investors are very attracted to companies attacking modern tech infrastructure problems with software services.

The numbers vary across industries, but according to a report released by Okta earlier this year, customers of its access management service have an average of 88 software applications running various parts of their businesses. The top 10% of its customers are running more than 200 applications across their network, and that is a lot of data and activity to track, measure, and evaluate.

Sumo Logic's services help companies monitor application performance as well as security incidents, and like many other vendors working with vast amounts of data, it uses machine-learning algorithms to tease out insights from that data. The hope is to prevent outages or breaches before they happen, and to give customers a better picture of how their applications are actually working across cloud platforms.

Monitoring, and its newer companion category, observability, are "a means to an end," Beedgen said. "The end is reliability, the end is for your apps to be reliable so your business can run on top of them."

Companies like Splunk rose to prominence providing similar services for on-premises data centers, but almost everyone in the monitoring business has shifted their efforts to the cloud. Last year, Datadog, which provides similar cloud-monitoring services to Sumo Logic, raised $648 million in an IPO, and its stock price has doubled over the last 12 months.

Sumo Logic provides its services across multiple clouds as well as hybrid cloud setups that involve some degree of self-managed servers, but it runs its own operation entirely on AWS. That might seem like a bit of a head-scratcher, especially given AWS' intent to provide similar monitoring services to its clients as part of large package deals designed to woo cloud newbies onto its platform.

But in reality, the relationship is more complicated, Beedgen said. Sumo Logic competes with AWS to some extent, but the two companies are also partners, and as Sumo Logic's customer base grows, that actually generates more revenue for AWS as well.

"Every innovator needs to live in fear of being disrupted," Beedgen said. "If they manage to build a better product than us, then that's on us."

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Beeper built the universal messaging app the world needed

It's an app for all your social apps. And part of an entirely new way to think about chat.

Beeper is an app for all your messaging apps, including the hard-to-access ones.

Image: Beeper

Eric Migicovsky likes to tinker. And the former CEO of Pebble — he's now a partner at Y Combinator — knows a thing or two about messaging. "You remember on the Pebble," he asked me, "how we had this microphone, and on Android you could reply to all kinds of messages?" Migicovsky liked that feature, and he especially liked that it didn't care which app you used. Android-using Pebble wearers could speak their replies to texts, Messenger chats, almost any notification that popped up.

That kind of universal, non-siloed approach to messaging appealed to Migicovsky, and it didn't really exist anywhere else. "Remember Trillian from back in the day?" he asked, somewhat wistfully. "Or Adium?" They were the gold-standard of universal messaging apps; users could log in to their AIM, MSN, GChat and Yahoo accounts, and chat with everyone in one place.

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David Pierce

David Pierce ( @pierce) is Protocol's editor at large. Prior to joining Protocol, he was a columnist at The Wall Street Journal, a senior writer with Wired, and deputy editor at The Verge. He owns all the phones.

About Protocol | Enterprise

‘It’s not OK’: Elastic takes aim at AWS, at the risk of major collateral damage

Elastic's long-running dispute with AWS entered a new chapter last week with big changes to two of its open-source projects. AWS now plans to take those projects under its wing.

"I don't know why this is surprising to people," Elastic CEO Shay Banon said in an interview with Protocol.

Photo: Michael Nagle/Getty Images

Fed up with what he sees as unfair competition from AWS, Elastic CEO Shay Banon felt he had no choice but to restrict the way third parties can use two important open-source projects developed by his company. Yet much of enterprise tech thinks he just threw the baby out with the bathwater.

Last Thursday, Elastic published a blog post — curiously titled "Doubling down on open, Part II" — announcing that Elasticsearch and Kibana, two widely used open-source projects in enterprise tech, would no longer be available under the permissive Apache 2.0 license. Instead, all subsequent releases to those projects will only be available under either a controversial new license known as the SSPL, or the Elastic License, both of which were designed to make it difficult for cloud companies to sell managed versions of the open-source projects they're applied to.

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Tom Krazit

Tom Krazit ( @tomkrazit) is a senior reporter at Protocol, covering cloud computing and enterprise technology out of the Pacific Northwest. He has written and edited stories about the technology industry for almost two decades for publications such as IDG, CNET, paidContent, and GeekWire. He served as executive editor of Gigaom and Structure, and most recently produced a leading cloud computing newsletter called Mostly Cloudy.

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Everything you need to know about the Roblox direct listing

The company is expected to go public via direct listing on the New York Stock Exchange in February.

Roblox CEO David Baszucki is taking the company public.

Photo: Ian Tuttle/Getty Images

Roblox is a video game platform, though it describes itself alternatively as a "metaverse," "human co-experience platform" and "new category of human interaction." It's expected to go public via direct listing on the New York Stock Exchange in February.

In simpler terms, Roblox enables developers to build games within the Roblox virtual world, which looks like a crossover between Minecraft and Lego. Developers publish and distribute their games through Roblox to an audience of some 31.1 million daily active users.

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Hirsh Chitkara
Hirsh Chitkara (@ChitkaraHirsh) is a researcher at Protocol, based out of New York City. Before joining Protocol, he worked for Business Insider Intelligence, where he wrote about Big Tech, telecoms, workplace privacy, smart cities, and geopolitics. He also worked on the Strategy & Analytics team at the Cleveland Indians.
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Poshmark made ecommerce social. Wall Street is on board.

"When we go social, we're not going back," says co-founder Tracy Sun.

Tracy Sun is Poshmark's co-founder and SVP of new markets.

Photo: Poshmark/Ken Jay

Investors were keen to buy into Poshmark's vision for the future of retail — one that is social, online and secondhand. The company's stock price more than doubled within a few minutes of its Nasdaq debut this morning, rising from $42 to $103.

Poshmark is anything but an overnight success. The California-based company, founded in 2011, has steadily attracted a community of 31.7 million active users to its marketplace for secondhand apparel, accessories, footwear, home and beauty products. In 2019, these users spent an average of 27 minutes per day on the platform, placing it in the same realm as some of the most popular social media services. This is likely why Poshmark points out in its S-1 that it isn't just an ecommerce platform, but a "social marketplace." Users can like, comment, share and follow other buyers and sellers on the platform.

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Hirsh Chitkara
Hirsh Chitkara (@ChitkaraHirsh) is a researcher at Protocol, based out of New York City. Before joining Protocol, he worked for Business Insider Intelligence, where he wrote about Big Tech, telecoms, workplace privacy, smart cities, and geopolitics. He also worked on the Strategy & Analytics team at the Cleveland Indians.
People

Affirm CEO Max Levchin: ‘I see an ocean of opportunities’

The fintech startup's stock soared more than 90% in its IPO debut today.

It was a blockbuster debut for Affirm. The fintech startup's shares soared more than 90% when it went public on Wednesday.

The day itself began quietly for CEO Max Levchin: He kicked it off with a Zoom call with his kids, made a latte for his wife and joined a group chat with some high school friends, one of whom is recovering from COVID-19. "We were very happy to hear that he's doing well," he told Protocol shortly after his startup began trading on the Nasdaq Global Exchange.

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Benjamin Pimentel

Benjamin Pimentel ( @benpimentel) covers fintech from San Francisco. He has reported on many of the biggest tech stories over the past 20 years for the San Francisco Chronicle, Dow Jones MarketWatch and Business Insider, from the dot-com crash, the rise of cloud computing, social networking and AI to the impact of the Great Recession and the COVID crisis on Silicon Valley and beyond. He can be reached at bpimentel@protocol.com or via Signal at (510)731-8429.

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