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New Relic CEO on APAC growth and future of observability

New Relic CEO Ashan Willy talks up growth trajectory in APAC, the company’s long-term vision, and how going private has enabled it to make strategic investments

As organisations across Asia-Pacific (APAC) increasingly migrate their workloads to the cloud while maintaining on-premise systems, having a pulse on what’s happening across their IT estate is critical to ensure seamless digital experiences.

Key to that is the use of observability platforms, which analyse data like logs and traces generated by systems to help organisations understand how an application or infrastructure is performing and identify issues early.

In an interview with Computer Weekly, Ashan Willy, CEO of New Relic, a supplier of observability tools, shed light on the opportunities in the diverse APAC market and the importance of observability amid cloud cost concerns and the growing adoption of artificial intelligence (AI).

In 2023, New Relic was taken private by investment firms Francisco Partners and TPG in a $6.5bn deal. Willy, the former CEO of Proofpoint, also discussed how going private has empowered the company to make strategic investments in key areas such as AI and cyber security.

Can you talk about the opportunities you’re seeing in the APAC region and how New Relic is helping customers gain better visibility across their increasingly complex IT estates?

Ashan Willy: New Relic has been around since 2008, starting as a cloud-native company just as cloud adoption was accelerating. As more workloads and applications migrate to the cloud, we are positioning ourselves as a company that prevents any interruptions to digital experiences.

APAC is a diverse region, with each country presenting unique challenges and opportunities from an observability standpoint. For example, Australia’s market is similar to that of the US, with many traditional brick-and-mortar companies moving to the cloud and leveraging cloud-based observability.

In contrast, India, with its robust startup culture, has a large number of digital-native businesses that use us from the start. Additionally, India has a significant number of traditional banking and manufacturing customers that are now moving into the digital space. Cloud spending in APAC has surged as companies increasingly adopt platforms like Microsoft Azure, Amazon Web Services (AWS), and Google Cloud, which is driving substantial growth for us.

Some companies still have the majority of their workloads on-premise, even as they move to the cloud. How is New Relic helping them navigate this transition from an observability perspective?

Willy: Often, we become the glue that holds everything together during this transition. While many companies have a strategic direction to move to the cloud, this migration can take years or even decades. However, they cannot afford to lose consistent observability and monitoring across their environments during this process. Our instrumentation supports cloud-native, on-premises, or hybrid environments, ensuring seamless observability regardless of where the workloads reside.

The core of observability is understanding what normal behaviour looks like and identifying anomalies. If we can detect unusual behaviour, we can feed that information into the security tools our customers are using, providing invaluable insights for stopping attacks in progress
Ashan Willy, New Relic

Interestingly, there is also a trend of some companies migrating workloads back on-premises due to concerns over cloud costs and AI.

AI introduces two challenges: it’s extremely costly, and it involves placing valuable intellectual property, like data, in the cloud. We’re seeing larger corporations bringing some of that back into their own datacentres. Nvidia’s next trillion-dollar valuation is expected to come when enterprises begin moving GPUs to the edge. While the general trend has been moving workloads to the cloud, we must also support the microtrend of bringing them back on-premises, as it’s becoming a hybrid environment.

How does observability drive this move to the cloud?

Willy: The applications our customers are writing are becoming increasingly critical. For example, in the US, I’m used to next-day delivery, but in India, digital-native businesses are pushing for delivery in under 10 minutes. This shift requires a completely different mindset, and observability becomes crucial because nothing can go wrong. You need to be predictive and provide appropriate business insights, and observability helps facilitate these types of business models.

We’ve just announced that we’re the first company to support Nvidia NIM, which enables companies to bring large language models from the cloud back on-premises. We support, manage, monitor, and observe AI within large applications. When most people write an application – whether it’s for e-commerce or streaming – only certain portions may use AI due to cost and complexity. We can monitor the entire application, including the AI components, ensuring comprehensive observability regardless of where the workloads are.

New Relic supports a range of observability use cases. What are the most common among your customers in APAC?

Willy: It varies by industry and country, but observability is one of the most ubiquitous horizontal applications across businesses, touching customers at every level. The only other application that comes close is perhaps call centre software, but observability is far more widespread.

We support a wide range of use cases. In India, for example, digital-native businesses use us to monitor overall customer experience, tracking everything from customer transactions to their software stack. As companies move to the cloud, they not only want to manage and monitor their applications but also optimise cloud costs. We’ve had customers save up to 30-40% of their cloud costs using observability.

In Japan, where many organisations still rely on on-premises systems, quality is paramount when they transition to digital applications. Our Japanese business has been very successful because we ensure that nothing breaks. In Australia, we serve various sectors, including banks and telecom companies. The telecom industry, in particular, is transitioning from being seen as traditional telcos to becoming ‘techcos’. They want to be viewed more like tech giants such as Amazon rather than outdated telecom providers, and observability plays a key role in this transformation.

How does observability intersect with the security space, given your background in that field?

Willy: In the security industry, there’s been a long-standing focus on ‘shifting left’ – catching issues early in the development process to save time downstream. Observability enables us to shift even further left. Typically, when someone writes code, it’s put into an application, deployed, and then monitored for vulnerabilities. If a vulnerability is exploited by bad actors, it can cause significant damage.

With observability, since we are embedded in the code, we can test for vulnerabilities before the code is released, during testing, or while the code is running. This “shift left of left” approach is why I believe security will be the next major area where observability will play a crucial role.

Our business in the APAC region is growing faster than the rest of the company, outpacing even our cloud growth, which is over 17%. India, in particular, is growing faster than the rest of the region
Ashan Willy, New Relic

The next step for our industry is to leverage the massive amount of data that observability vendors collect and use it to prevent attacks in real-time. For example, in ransomware attacks, the code often behaves differently from its usual patterns. The core of observability is understanding what normal behaviour looks like and identifying anomalies. If we can detect unusual behaviour, we can feed that information into the security tools our customers are using, providing invaluable insights for stopping attacks in progress. However, we won’t achieve this alone – we’ll need to partner with key vendors in the industry.

What sorts of partners are you looking to collaborate with?

Willy: We’re interested in partnering with threat intelligence providers, as they have valuable intellectual property. We’d also consider partnerships with vendors in the XDR [extended detection and response] or Soar [security orchestration, automation, and response] space – basically, anyone we can send real-time data to for incident response. Another natural partnership for us would be with endpoint security vendors with whom we can exchange signals.

How fast is your business growing in APAC?

Willy: Our business in the APAC region is growing faster than the rest of the company, outpacing even cloud growth, which is over 17%. India, in particular, is growing faster than the rest of the region. We’ve made significant investments in India for several reasons.

First, there’s the business potential within India itself. Second, India offers a large pool of talent for our R&D efforts. While the average Silicon Valley company spends about 12% of revenue on R&D, we’re spending close to 22%, and that figure is likely to increase. This industry moves too fast for us to invest less. Additionally, many multinational corporations have significant operations in India, so even though we might be selling to them in Europe or America, many of their practitioners are based in India.

Elsewhere in the region, Australia is a very successful market for us because it tends to adopt technology faster than the rest of the Western world. Japan is also experiencing rapid growth as they catch up with digital transformation, and we’re capitalising on that. In Southeast Asia, we have strong digital-native customers in places like Indonesia.

You mentioned R&D spending. Has going private helped you take a longer-term view of the business?

Willy: Typically, when companies go private, they tend to invest less. However, we are operating under a growth thesis and aren’t being mined for cash by our investors. New Relic is the largest investment our owners, Francisco and TPG, have made, and the thesis is that we need to invest heavily in R&D. We’re taking a patient approach, planning in five-year increments rather than focusing solely on quarterly results. That gives us a longer runway to invest in key areas.

We’re focusing on a few key areas, including AI, security, and open source – particularly OpenTelemetry. Let me explain why. The top five vendors in the observability space only have 35% market share. Compare that to the operating system market, where the top three vendors hold 96% of the market. In security, there are 6,000 vendors, yet the top five control 64% of the market.

The observability market hasn’t consolidated because developers and practitioners often bring their own tools, which they’re very passionate about. However, these tools can be difficult for enterprises to manage. OpenTelemetry has become more prevalent in observability than in other markets, and we’re treating it as a first-class citizen.

Seven of our top 10 customers use a mix of our tools and open-source tools. Asia, in particular, uses a lot of open source, so our ability to treat it as a first-class citizen and bring it under a single umbrella allows our customers to integrate these open-source tools into their organisations effectively.

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