Datadog, Inc. (NASDAQ: DDOG), the monitoring and security platform for cloud applications, today announced a new strategic partnership with Microsoft Azure. As part of this launch, Datadog will now be available in the Azure console as a first class service. This means that Azure customers will be able to implement Datadog as a monitoring solution for their cloud workloads through new streamlined workflows that cover everything from procurement to configuration. The improved onboarding experience makes Datadog setup automatic, so new users can start monitoring the health and performance of their applications with Datadog quickly, whether they are based entirely in Azure or spread across hybrid or multi-cloud environments. With the deepest integration and the easiest configuration, Datadog is now clearly positioned as the premier monitoring solution for Azure.
“Observability is a key capability for any successful cloud migration. Through our new partnership with Microsoft Azure, customers will now have access to the Datadog platform directly in the Azure console, enabling them to migrate, optimize and secure new and migrated workloads”
That’s a huge net win for DDOG in a few ways. Did they already have such a relationship with Amazon/AWS? (MS PR says they’re the first cloud to enable this but that may be splitting hairs / prspeak).
This is a big deal for DDOG. Essentially, the Microsoft salesforce now gets compensated and incentivised to sell DDOG to their customers. DDOG give up a small amount of margin but have expanded their sellers worldwide multiple times the numbers they currently have of their own.
I’d expect to see some good revenue tailwind from this not this earnings report coming but certainly the next few quarters after.
And if they’ve done it with Microsoft, they’ll most likely be working on similar deals with Google and Amazon. Other companies that have gone this route (NetApp for example) have deals with all the hyperscale cloud providers.
The hyperscale market is one of the fastest growing markets in the entire segment, (even before COVID) and has been been further accelerated by the COVID “work from home”, “learn from home”, “shop from home”, (etc.)dynamic, and Azure has been one of the main beneficiaries of that dynamic. Microsoft recently stated that the COVID shut down has resulted in 2 years of digital transformation in 2 months (referring to mid March to mid May of this year). The Azure announcement today is undoubtedly strategic for DDOG, but makes me think DDOG becomes much more attractive as an acquisition candidate, potentially by MSFT, if there is strong uptake in the DDOG package. (And there was already rumors of DDOG getting acquired by CRM, which is OT. Will DDOG CEO Olivier Pomel and their board be able to resist the (significant) deep pockets of an acquiring company like MSFT, unlike Glen Tullman, founder of Livongo. (BTW, LVGO is now within ~2% of their ATH close).
That’s great news for DDOG!
Normally the giants like AWS GCP and Azure they tend to watch and learn/copy then compete with their clients such like MangoDB etc…
So now this corporation we might think that’s a big victory for DDOG just like Amazon take TTD on fire TV as the program ADs.