How Can AppDynamics Lead the APM Market in 2020?

AppDynamics goes to show that nothing is over until it’s over. The Application Performance Management and IT operations analytics company helps organizations oversee their massive cloud structures.

The amount of oversight that cloud structures and applications require can be confusing and disjointed. AppDynamics puts all of the information in one convenient solution so that leadership can understand the data and use it to make informed decisions.

The information also alerts businesses of any potential problems in their system. Once a problem appears, it can be a headache to sort out and fix. However, AppDynamics catches the issue before they become a full-blown problem so that fixes are simple.

From the very beginning, AppDynamics sported impressive growth despite competition from other large public companies, such as New Relic. They raised a total of $314.5 million in funding and reached mythical unicorn status with a $1.9 billion valuation in 2017.

That same year, AppDynamics was close to going public. However, within a week, Cisco swooped in with a deal and acquired the company for $3.7 billion.

The sudden move from Cisco was a part of their intentional plan to expand their resources. That year, Cisco announced it would lay off 7% of its workforce due to hurting numbers. They hoped that acquiring the company would help them offer a wide range of tools for potential clients.

It was a risky move for the enterprise given AppDynamics’ steep competition, but they seemed willing to put themselves out there.

Since then, other acquisitions from Cisco enabled AppDynamics to widen its approach as well. Cisco bought Perspica, a machine learning website, and folded it directly into Appdynamics. The marriage of AppDynamics and Perspica opened up doors, unlike their entire competition. 

The result was Cognitive Engine. In the past, AppDynamics would point out the potential problem for businesses to deal with on their own. Cognitive Engine allows them to find the root cause of the problem and initiate remediation at an unprecedented rate. Clients could now have automatic fixes to their issues. 

They also introduced new monitoring capabilities, most notably with AWS Lambda. These new capabilities seek to resolve the issue that has plagued many monitoring tools: the inability to monitor different infrastructures. Because the application doesn't sit on a defined virtual machine, it can trace various transactions of all types.

Now that these changes have been implemented, can Cisco’s gamble to expand with AppDynamics pay off? Is there a market for this continued expansion in the cloud? Also, with the increasing competitiveness of the APM markets, does AppDynamics have a chance to stand out?

This report will take a look at the data to find out. 

Prognosis

Now that AppDynamics integrates with AWS Lambda, they have a chance to grow their customer base into new markets and company sizes. In addition, there is a wide range of growth for the US market.

With a better understanding of the market and its targets, AppDynamics' new venture could be a success. It would enable them to break into markets that they have traditionally failed to reach.

However, sales could fall flat if they don't branch out from their original buyer personas and expand to anticipate the challenges and aspirations of their new market. Their success depends on how well they can understand new markets and adjust accordingly. 

Intricately Analysis

Intricately can help provide this necessary insight to facilitate better marketing and sales practices to accelerate growth.

Intricately’s Global Sensor Network collected the data provided in this report. Our network gathers data on digital product usage, applications, and traffic. As a result, Intricately offers in-depth insights on more than seven million organizations worldwide and the product usage intelligence on over 21,000 cloud products. 

We are not in-line (from a traffic perspective), nor do our customers provide us with any usage data. Instead, we collect all of this data from the public internet and monitor publicly available products and infrastructure. Our sensors can also track the increasingly public components of many on-prem and behind-firewall products.

We analyzed AppDynamics customer base to identify the key trends and competitive insights that would facilitate a better future growth strategy. 

Customer Analysis

Currently, AppDynamics' most extensive customer base by company size is start-ups, which make up over 48% of their customers. Next is small-to-medium businesses, which make up almost 22%.

Typically, application monitoring software does not do as well with larger enterprises because they can develop their own with their IT department. However, AppDynamics is well-known for its large customers, including Salesforce, DreamWorks, and Wells Fargo. As a result, it does have an impressive number of enterprise clients, which make up a little over 16% of its customers.

Geographically, AppDynamics’ largest customer base is the European-Middle Eastern- African market, which makes up about 39% of its customers. They are followed closely by North America, which makes a little over 38% of its customers.

Being that AppDynamics' typical customer is a start-up, it also makes sense that their average cloud spend is low. Most spend under $1000 a month on their cloud technology, followed next by $1-10K a month.

Potential for Growth

With AppDynamics' recent moves, though, these statistics could change. Their integration with AWS Lambda is reaching a different customer base. Start-ups make up the smallest number of AWS Lambda customers. The largest customer base is small-to-medium businesses (almost 29%) followed closely by mid-market companies (28%).

For the cloud market in general, AppDynamics has a large potential market in North America. Over 2 million companies use 0-10 apps, which means they could use their capabilities. However, over 200,000 organizations use 10-50 applications, which is an ideal market for them. In addition, over 28,000 companies use 50+ apps and could use its product to help organize all the information.

Summary 

To keep up with growing competition and harness all of the capabilities of their Cisco merger, AppDynamics should look to expand their market. By developing past its typical start-up base client, it will open up more potential with its cloud capabilities.

Right now, AppDynamics suffers with mid-market businesses, but it has a great amount of potential. By honing their marketing strategy to reach them, AppDynamics could experience more significant growth. It also could expand its North American market, as well. There are hundreds of thousands of businesses that need to organize their applications.

With the right reach and marketing strategy, there are untapped markets for the organization. By increasingly understanding the needs of Mid-Market businesses, as well as North American companies, it has potential. However, if the company continues to concentrate solely on start-ups, it may hit a ceiling with AWS Lambda customers.

Where We Sourced This Data

Here at Intricately, we monitor the usage, adoption, and spend on over 21,000 distinct cloud products and analyze the usage of more than seven million companies worldwide. Through our proprietary Global Sensor Network, we deploy more than 150 points of presence (PoPs) to get a comprehensive view of how companies deploy, utilize, and invest in their digital products and applications. Click here to see a list of all of the products we monitor. 

We hope you enjoyed reading this report. With our Enterprise Platform, leaders from all across cloud marketing and sales organizations can forecast, prioritize, and close opportunities faster than ever. Let our team give you a demo of our product today. In the meantime, use our free web app to see some of our data.

Note: Intricately’s proprietary Global Sensor Network provided the data in this report. Seven million companies were evaluated, along with over 21,000 unique cloud products.


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