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SOA & WOA: Article

AppDynamics Pulls in $50 Million

The new infusion brings AppDynamics’ total funding to a sweet $86.5 million

AppDynamics is a four-year-old start-up that can tick off all the current buzzwords that make a VC get out a pen and write a check - to wit, it manages and accelerates federated web apps in the cloud, tries to make sure they stay up and spots problems with their web sites.

So it's gotten a juicy $50 million D round led by Institutional Venture Partners after the VC discovered that a lot of its portfolio companies were using the stuff.

Other enterprise customers include Cornell University, Orbitz, Expedia, Tivo, Overstock.com, Fox News, Staples, Time Warner Cable, Intuit, Priceline and Netflix. It reportedly has 500 clients.

Existing backers Kleiner Perkins, Greylock and Lightspeed Venture Partner also participated in the handsome round and reportedly valued the company at $500 million.

The new infusion brings AppDynamics' total funding to a sweet $86.5 million.

The start-up wanted the money to scale to demand, which it says has outpaced its most aggressive growth projections and pushed the company past its revenue goals for the last two years. Apparently that growth has been like 300% a year lately and it needs to grow faster to become a multibillion-dollar operation.

It's beginning to expand internationally and is managing 51 billion transactions a day. It means to up its staff from 200 to 300 this year.

The money will go toward engineering, sales and marketing and expanding into Europe and Asia.

The company also reckons that if software is running the world it "wants to make it run better by instrumenting, analyzing and optimizing every single line of code, and giving everyone from developers to CEOs to consumers insight into the software that forms the foundation of the modern world."

It has "many many more applications to help" than it's already had a shot at.

To fulfill this mission, it says it's got an aggressive product roadmap that demands resources both from R&D and the business side of the company.

"We need to invest in order to help us realize this vision of making the software of the world run better." (Gee, I vaguely remember being that young.)

CEO Jyoti Bansal said on the company's blog that when he started the company "my goal was simple: to make applications easier for ops and dev to manage by telling them relevant, actionable information about what's going on at the code level and how that ties back to the business and the end users. My approach with AppDynamics was to build a scalable and intelligent product capable of understanding complex applications and automatically instrumenting, baselining and analyzing them. The intelligence of the product has been met with tremendous success among the owners of large, distributed applications, as our customers will attest - they've given our product a Net Promoter Score (NPS) of 81, which is outstanding for enterprise software (the average NPS for software companies was 41 in 2012)."

AppDynamics competes with HP, Compuware, CA, Quest - now a Dell satellite - Appnomic, Flexera Software and New Relic, supports .NET and Java, and is working toward going public in a few years. This round will be the last before an IPO.

More Stories By Maureen O'Gara

Maureen O'Gara the most read technology reporter for the past 20 years, is the Cloud Computing and Virtualization News Desk editor of SYS-CON Media. She is the publisher of famous "Billygrams" and the editor-in-chief of "Client/Server News" for more than a decade. One of the most respected technology reporters in the business, Maureen can be reached by email at maureen(at)sys-con.com or paperboy(at)g2news.com, and by phone at 516 759-7025. Twitter: @MaureenOGara

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