Observability..Crowdstrike?

Crowdstrike and Humio both put out interesting blog pieces around the Humio acquisition. I’ll link them below this paragraph. I’ve spent a little time looking into Humio and I think it is important to understand that this acquisition is a technology and team acquisition. It does not bring any significant revenue or customers to crowdstrike. CRWD paid 400 million dollars, predominately in cash. The scuttlebut on Humio is that they only had 2.5 million dollars in revenue.

https://www.crowdstrike.com/blog/taking-our-falcon-xdr-platf…
https://www.humio.com/humio-crowdstrike

Now the question is why would Crowdstrike acquire a company that has basically no revenue.
The initial big reason is to extend crowdstrike XDR capabilities. XDR is the new buzz word for eXtended Endpoint Detection and Response. Basically it is integrating and analyzing all the data from the different workloads, containers, endpoints, networks, etc etc. All that data is a massive amount of logs. Humio excels in managing massive amounts of logs. Crowdstrike is already doing this, Humio will allow them to keep more data for less money and do it faster. This line from Humio’s blog piece says it better, “We architected Humio’s platform to easily ingest massive amounts of machine and application data in true real time, enabling enterprises to monitor, analyze, investigate and search all of their data at an industry leading TCO”. Better, faster, cheaper. And here is what crowdstrike says, “We conducted a thorough market review of competing solutions and were blown away by Humio’s mature technology architecture and their proven ability to deliver at scale, making it ideal to enhance CrowdStrike’s Security Cloud.”

I think the more interesting part of the acquisition are the following quotes…important parts bolded.

Joining forces with Humio will not only elevate our ability to solve security use-cases, it builds on the momentum we have already achieved with Falcon Spotlight and Falcon Discover, where we continue to grow our ability to address broader use cases outside of security.

CrowdStrike is building a unified data layer to power the next generation of enterprise security and IT platforms. With the ability to ingest and analyze both first- and third-party data, and to answer complex questions at the speed of the cloud, CrowdStrike will continue to innovate and advance its powerful data platform to solve real-world customer problems . I am very excited for what our combined future holds. My comment: Notice they don’t say security problems

By leveraging new ingest pipelines and cloud log management, we will continue to help developers, security analysts, and IT professionals gain complete observability to answer any question, explore threats and vulnerabilities, and gain valuable insights from all computer-generated data in real-time.

With the <correlation-at-scale of Threat Graph, and the smart-filtering and on-sensor protection capabilities of the Falcon agent, our prevention and detection capabilities will find threats faster and enhance how the CrowdStrike platform addresses enterprise IT challenges.

Holy Mother of all Pivots!! Crowdstrike has laid down the gauntlet and notified the world that they are no longer a Sec-Ops company. They are an Ops company…Dev Ops, IT Ops, Sec Ops…anything Ops. Many people are going to ask if DDOG and CRWD are going to compete. They will absolutely start to overlap but I would guess…and this is pure conjecture that CRWD goes where DDOG isn’t. Observability is a huge huge space with plenty of room. DDOG is still a fairly immature platform and they are constantly saying most of their business is greenfield and they have tons of places to expand into. DDOG and CRWD are likely going to approach observibility from different vantage points (pun intended) and fill different market niches.

Stocknovice made a great point, CRWD funded this mostly with cash. They must believe their stock isn’t overvalued. To that same point, CRWD raised money with debt, not a convertible bond…they must not want to give away any part of their company.

I remain very excited about CRWD. This acquisition is even more exciting than Preempt which I liked quite a bit. And wrote about here. https://discussion.fool.com/crowdstrike39s-acquisition-preempt-3…

Ethan

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