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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."

Does Elon Musk make Tesla tech?

Between the massive valuation and the self-driving software, Tesla isn't hard to sell as a tech company. But does that mean that, in 10 years, every car will be tech?

You know what's not tech and is a car company? Volkswagen.

Image: Tesla/Protocol

From disagreements about what "Autopilot" should mean and SolarCity lawsuits to space colonization and Boring Company tunnels, extremely online Tesla CEO Elon Musk and his company stay firmly in the news, giving us all plenty of opportunities to consider whether the company that made electric cars cool counts as tech.

The massive valuation definitely screams tech, as does the company's investment in self-driving software and battery development. But at the end of the day, this might not be enough to convince skeptics that Tesla is anything other than a car company that uses tech. It also raises questions about the role that timeliness plays in calling something tech. In a potential future where EVs are the norm and many run on Tesla's own software — which is well within the realm of possibility — will Tesla lose its claim to a tech pedigree?

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Becca Evans
Becca Evans is a copy editor and producer at Protocol. Previously she edited Carrie Ann Conversations, a wellness and lifestyle publication founded by Carrie Ann Inaba. She's also written for STYLECASTER. Becca lives in Los Angeles.

As President of Alibaba Group, I am often asked, "What is Alibaba doing in the U.S.?"

In fact, most people are not aware we have a business in the U.S. because we are not a U.S. consumer-facing service that people use every day – nor do we want to be. Our consumers – nearly 900 million of them – are located in China.

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J. Michael Evans
Michael Evans leads and executes Alibaba Group's international strategy for globalizing the company and expanding its businesses outside of China.
Protocol | Workplace

Apple isn’t the only tech company spooked by the delta variant

Spooked by rising cases of COVID-19, many tech companies delay their office reopening.

Apple and at least two other Silicon Valley companies have decided to delay their reopenings in response to rising COVID-19 case counts.

Photo: Luis Alvarez via Getty

Apple grabbed headlines this week when it told employees it would delay its office reopening until October or later. But the iPhone maker wasn't alone: At least two other Silicon Valley companies decided to delay their reopenings last week in response to rising COVID-19 case counts.

Both ServiceNow and Pure Storage opted to push back their September return-to-office dates last week, telling employees they can work remotely until at least the end of the year. Other companies may decide to exercise more caution given the current trends.

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Allison Levitsky
Allison Levitsky is a reporter at Protocol covering workplace issues in tech. She previously covered big tech companies and the tech workforce for the Silicon Valley Business Journal. Allison grew up in the Bay Area and graduated from UC Berkeley.
Protocol | Workplace

Half of working parents have felt discriminated against during COVID

A new survey found that working parents at the VP level are more likely to say they've faced discrimination at work than their lower-level counterparts.

A new survey looks at discrimination faced by working parents during the pandemic.

Photo: d3sign/Getty Images

The toll COVID-19 has taken on working parents — particularly working moms — is, by now, well-documented. The impact for parents in low-wage jobs has been particularly devastating.

But a new survey, shared exclusively with Protocol, finds that among parents who kept their jobs through the pandemic, people who hold more senior positions are actually more likely to say they faced discrimination at work than their lower-level colleagues.

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Issie Lapowsky

Issie Lapowsky ( @issielapowsky) is Protocol's chief correspondent, covering the intersection of technology, politics, and national affairs. She also oversees Protocol's fellowship program. Previously, she was a senior writer at Wired, where she covered the 2016 election and the Facebook beat in its aftermath. Prior to that, Issie worked as a staff writer for Inc. magazine, writing about small business and entrepreneurship. She has also worked as an on-air contributor for CBS News and taught a graduate-level course at New York University's Center for Publishing on how tech giants have affected publishing.

Protocol | Enterprise

Alphabet goes deep into industrial robotic software with Intrinsic

If it succeeds, the gambit could help support Google Cloud's lofty ambitions in the manufacturing sector.

Alphabet is aiming to make advanced robotic technology affordable to customers.

Photo: Getty Images

Alphabet launched a new division Friday called Intrinsic, which will focus on building software for industrial robots, per a blog post. The move plunges the tech giant deeper into a sector that's in the midst of a major wave of digitization.

The goal of Intrinsic is to "give industrial robots the ability to sense, learn, and automatically make adjustments as they're completing tasks, so they work in a wider range of settings and applications," CEO Wendy Tan-White wrote in the post.

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Joe Williams

Joe Williams is a senior reporter at Protocol covering enterprise software, including industry giants like Salesforce, Microsoft, IBM and Oracle. He previously covered emerging technology for Business Insider. Joe can be reached at JWilliams@Protocol.com. To share information confidentially, he can also be contacted on a non-work device via Signal (+1-309-265-6120) or JPW53189@protonmail.com.

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