With New Funding, AppDynamics Aims To Grow APM

AppDynamics, a provider of cloud-based application performance management (APM) software, last week received an infusion of $20 million from Kleiner Perkins Caufield & Byers (KPCB). The C-Series funding adds KPCB as its latest investor, joining Greylock Partners and Lightspeed Venture Partners.

AppDynamics' namesake software helps IT manage distributed Web applications running on premises and in the cloud, and is targeted at both operations and development teams.

Jyoti Bansal, AppDynamics' founder and CEO, said in an interview that the company sees a significant market for managing mission-critical business applications on distributed cloud servers. Bansal, a one-time lead software architected for Wily Technology (now part of CA Technologies), founded San Francisco-based AppDynamics nearly four years ago. Large cloud-services users such as Netflix, Priceline and Tivo run AppDynamics app management software.

As companies move business applications to cloud architectures from large monolithic servers, operations and development teams are challenged with managing the apps and ensuring reliable performance, a satisfactory user experience and consistent availability. "AppDynamics technology is about providing a management platform for people to effectively manage applications as they move into the cloud," Bansal said.

AppDynamics competes with numerous software vendors that offer APM wares including CA, Compuware (which last year acquired dynaTrace), ExtraHop, Hewlett-Packard, Precise Software and Quest Software, among others. "The market for managing mission-critical Web applications is huge," Bansal said.

Last year AppDynamics' business grew more than five times, according to Bansal, though he declined to disclose revenues. Its software runs on Web servers on premises and in the cloud and works with applications written in both Java and Microsoft's .NET. AppDynamics also has a partnership with Amazon Web Services and has developed an Amazon Machine Image (AMI) to run AppDynamics' instrumentation on potentially thousands of servers, according to Bansal.

That instrumentation allows customers to determine the source of bottlenecks and slowdowns and perform remediations. "You can reduce time to resolution of problems by many orders of magnitude from around eight to 10 hours to 10 to 15 minutes," he said. One major customer uses AppDynamics to manage apps distributed among 5,000 Amazon cloud servers.

In addition to its relationship with Amazon, AppDynamics works on Microsoft's Windows Azure and cloud services offered by Rackspace. AppDynamics also has partnerships with some smaller cloud providers as well as RightScale, a popular cloud infrastructure management provider, and has a co-selling pact with BMC Software.

With its new round of funding, Bansal said AppDynamics plans to expand its international business (it now represents 30 percent of its current revenue) and extend its product line with more management functions that, among other things, help deploy distributed agile applications in the cloud and help scale, monitor, manage and analyze those applications.

The software runs on Linux and Windows servers, with pricing starting at $4,000 per agent running on a single server or operating system instance.

Posted by Jeffrey Schwartz on January 24, 2012