New Relic Garners $80 Million To Expand APM

7 Dumb Cloud Computing Myths

Cloud computing increases companies' need to keep tabs on how their websites or remotely hosted applications are running. Startup service New Relic provides key metrics, namely page load response times and browser transaction times, to companies operating in the cloud.

In the fourth quarter of 2012, New Relic signed up a thousand paying customers from among 35,000 active accounts using its free application monitoring service. For the year as a whole, it doubled both paying customers and revenues. It now has about 5,000 paying customers, Cook said.

It counts significant deployments at ESPN, Nike, Sony, Comcast, E-Trade, eHarmony, Github, Groupon, Mashable and MercadoLibre. That proven ability to address major firms' application performance concerns is one reason why eight venture capital firms have just invested $80 million in New Relic.

Insight Venture Partners led the financing round, which will be New Relic's mezzanine, or last injection of venture capital before it goes out for an initial public offering. No IPO notice has been filed, so few observers expect that event to happen in 2013. But president and COO Chris Cook left no doubt it was coming. "We want money to expand. We want financing to bridge between where we are now and our IPO," he said in an interview.

[ Did you know New Relic played a role in the Obama re-election campaign? Learn how: Obama's Developer Brain Trust: Inside The Big Battle. ]

Additional mezzanine round participants were Dragoneer Investment Group, Passport Ventures and T. Rowe Price. Previous investors Benchmark Capital, Trinity Ventures, Tenaya Capital and Allen & Co. also participated.

New Relic can watch page-load times as a measure of application performance, and measure the amount of time it takes for an application to react to a user event in the browser, such as a clicking on a check box requesting certain information. Both measures are critical to knowing not merely whether the application is running, but how well it's running from the user's perspective.

New Relic grew out of the experience of the founders of Wily Technology, a firm that produced software for use on premises to monitor Java applications' operation. Wily was sold to CA Technologies in 2006 for $375 million. New Relic founder and CEO Lew Cirne and other members of the Wily team then started an online service that could monitor the performance of PHP, Ruby, Python, .Net or Java applications running on the Web and in remote cloud servers.

"Node.js (JavaScript to be run on servers) is in the works. We have a philosophy that we want to support where the new applications will be written," said Cook.

New Relic just announced that its application monitoring service may now be accessed through iOS devices, such as the iPad and iPhone, so that system managers away from the data center may still get information and alerts on how their applications are running. It's still one step away from being able to monitor applications that run on mobile devices, but Cook said that was one point of the new financing.

"We're not too interested in Angry Birds or Sudoku," he said, but many enterprises now want to know if the applications they've geared for mobile users are performing as expected. "We're going to go into mobile in a lot of significant ways," he said.

In addition to mobile apps, New Relic needs funds to expand its service into Europe.

"We're the first ones to be doing what we're doing," claimed Cook. "We'll add 140 employees by the end of the year to the 200 people we have to drive sales and marketing," he said.