Thank you for posting. This is my impression as well. There used to be a few players: Dynatrace, New Relic, Sumo Logic etc that were in the APM space as of two years ago. As far as I can tell, today Datadog has become the de factor APM for all three major clouds AWS, Azure, GCP for starting a new cloud stack or migrating from on-prem. Their APM product is simply a lot better than the others. Case in point: our company used to be on New Relic monitoring AWS containers. Switched to Datadog three years ago and never looked back.
In the meantime they are still expanding into the log aggregation space and eating market share from Splunk, Sumo Logic etc.
(P.S. APM = capture the events
Log aggregation = summarize what’s happening with those events)
I believe the current revenue growth in Datadog is mostly from the on-prem to cloud migration in the last few years. Every new container created today is likely equipped with Datadog. In other words, their growth is driven by the total number of cloud containers (number of virtual computers) in the world. So whenever you see AWS or Azure posting 40%+ growth, you can be pretty sure Datadog won’t have less than that, since every new container created is new revenue for Datadog. And they are still eating market share from log aggregation players.
I have been asking myself when will I sell Datadog? Probably whenever the big three cloud growth slows down. Datadog does not have exciting product outside of APM or log aggregation. If they want to go into network security, they will face competition from Cloudflare, which I believe is a lot stronger than Datadog here and is as almost as universal as Datadog in a company’s cloud stack. I don’t know where else they can expand. But I feel the end of runway for APM and logging won’t be coming anytime soon. There’s still a crazy shortage of cloud engineers that indicates high demand in migrating to cloud right now.