Sumo Logic bets on cloud for Big Data crunching

Reuters News
Posted: Apr 17, 2013 12:49 PM
Sumo Logic bets on cloud for Big Data crunching

By Sayantani Ghosh

(Reuters) - Sumo Logic, which makes cloud-based tools to crunch data on a massive scale, expects a sevenfold increase in the number of its customers this year as "Big Data" gains in popularity, its chief executive said.

The privately owned startup is among a handful of companies to have caught the eye of investors in search of the next Splunk <SPLK.O>, the Big Data trailblazer that has more than doubled in value since going public a year ago.

Big Data firms analyze vast troves of information that can be culled from social media, Web searches, financial records and other mountains of digital facts and figures. They can operate more simply and cheaply than expensive data warehouses.

With no short-term need for financing, Sumo Logic has no immediate plans to follow Splunk to the stock market, Chief Executive Vance Loiselle told Reuters in an interview. What sets Sumo Logic apart, he says, is its use of cloud platforms.

"Sure, on-premise solutions had their day, but so did the triceratops, if you catch my drift," he said.

The Big Data industry is expected to drive $54.59 billion in IT spending by 2016, compared with about $27 billion in 2011, according to data from market research firm Gartner.

Shares of Splunk, the first Big Data company to go public in April 2012, closed at $42.14 on the Nasdaq on Tuesday, compared with an initial public offering price of $17.

Tableau Software Inc is preparing to conduct the next IPO in the sector, having filed with U.S. regulators this month for a listing to raise up to $150 million.

Data analytics companies say they are attracting more customers. Splunk, which expects to break even on an adjusted basis this year, plans to add 2,000 customers.

Loiselle said he expected Sumo Logic to end the year with about 600 customers. It currently has around 85 or 90, he said, including Netflix Inc <NFLX.O>, Progress Software Corp <PRGS.O> and LimeLight Networks Inc <LLNW.O>.

It also plans to double employee numbers from about 80 this year, he said.


Mountain View, California-based Sumo Logic has raised $50.5 million in three rounds of funding, most recently in November, and counts Accel Partners, Greylock Partners and Sutter Hill Ventures among its investors.

The company was launched in early 2010 by Kumar Saurabh and Christian Beedgen, former employees of security software maker ArcSight, which was acquired by Hewlett-Packard Co <HPQ.N> in 2010.

"The objective behind Sumo Logic was: 'How do we give customers the ability to do real-time analytics?'," said Loiselle, who has been chief executive since May 2012.

"Instead of having customers figure out what they are looking for, let's give them an engine that can ... detect problems in the data, so that they can quickly understand threat patterns, outages, changes in business behavior without having to know what you are looking for," he said.

Before joining Sumo Logic, Loiselle co-founded data center automation company BladeLogic and later joined BMC Software Inc <BMC.O> when BMC bought BladeLogic.

(Editing by Robin Paxton)