Open source Datadog rival SigNoz lands on the cloud with $6.5M investment

Every company is now a software company, as the cliché goes, which means every company needs to understand what’s going on inside their apps and infrastructure.

Even the slightest lag can be the difference between onboarding a new customer and, well, not.

This is where the concept of “observability” enters the fray, a software-monitoring approach that involves measuring the internal state of a system by studying the raw outputs through telemetry data that includes metrics, logs and traces. Observability is all about finding problems in the production stage, where software is already in the wild and where bugs and glitches have their most pronounced impact.

Observability is big business, with the likes of Datadog now a $28 billion publicly held company, while younger upstarts such as Chronosphere continue to attract significant investor capital at lofty billion-dollar valuations. Put simply, the world is hungry for app performance monitoring (APM), but companies will often need something a little less centralized and more flexible, something that fledgling startup SigNoz is setting out to address.

SigNoz is built on OpenTelemetry (OTEL), an open source standards-based framework constituting myriad APIs (application programming interfaces) and SDKs (software development kits) that make it easier to collect telemetry data. So by leaning on OTEL’s SDK, developers can send data to SigNoz — including metrics, logs and traces — from their applications and associated infrastructure.

Using SigNoz, an e-commerce company, for example, can better understand why their product-listing page is taking so long to load by measuring the latency their customers are experiencing, and then look at specific APIs which serve these pages to identify a culprit, such as an iffy database call.

“Because we have metrics, logs and traces in a single app, users can go from metrics to traces and traces to related logs very seamlessly in just a few clicks,” SigNoz co-founder and CEO Pranay Prateek explained to TechCrunch. “This helps users solve issues much faster. ”


Image Credits: SigNoz

Besides the big-name proprietary incumbents such as Datadog, New Relic and Chronosphere, a bunch of players have inhabited the open source observability space in recent years. These include Grafana, which has different modules for metrics, traces and logs that require switching to access the different signals. And then there’s Opstrace, acquired by GitLab back in 2021, which has since been integrated into GitLab and thus ceases to exist as a standalone open source project.

SigNoz, for its part, is based on ClickHouse, an open source columnar database management system designed for high-performance analytics and data warehousing. This helps with efficiency and cost-effectiveness compared to more traditional relational databases, because storing data in columns aids with compression and optimizes disk I/O (input/output) operations. In short, it reduced both storage and query processing times.

“Developers are struggling with steep prices, slow data ingestion and missing functionality from older APM vendors,” Prateek added.

Show me the money

SigNoz today announced it has raised a fresh $5.4 million in a round of funding led by SignalFire, with participation from Uncorrelated Ventures, Alumni Ventures and a slew of angels including GitHub co-founder Tom Preston-Werner. Additionally, SigNoz revealed that it had raised another $1.1 million in previously undisclosed funding following its participation in Y Combinator (YC) back in 2021, with backers including SignalFire and several angel investors.

The news is also accompanied by the launch of its new cloud service, for companies looking to alleviate some of the heavy lifting of deploying SigNoz.

“We saw lots of users interested in using SigNoz, but [who] didn’t want to host it themselves — so offering a SigNoz cloud service was a natural choice,” Prateek said.

And so SigNoz’s business model is much the same as countless other commercial open source companies out there, vis-à-vis a hosted SaaS model for teams replete with log management, infrastructure monitoring, SSO and all the rest; and an enterprise tier that offers additional service level agreements and features such as custom integrations, as well as the option for on-premises deployment for businesses with strict data privacy requirements.

SigNoz said that it plans to use its fresh cash injection to “mature the product,” usher in more OpenTelemetry-native features to the observability sphere, and build on its existing premium tooling. “We will be investing in scaling our cloud and enterprise offerings,” Prateek said.

Looking to the future, Prateek said that they plan to push SigNoz deeper into developer workflows, too, bringing observability further up stream.

“Rather than only thinking about observability and performance after an application is ready to be deployed, can developers start thinking about performance and observability from day one?,” Prateek said. “Also, since SigNoz already captures data around communication between different services through our distributed tracing and logs product, providing security analysis on top of it is one area where we can easily expand into.”

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