ServiceNow leaps into applications performance monitoring with Lightstep acquisition

[NelsonG]

This morning ServiceNow announced that it was acquiring Lightstep, an applications performance monitoring startup that has raised over $70 million, according to Crunchbase data. The companies did not share the acquisition price.

ServiceNow wants to take advantage of Lightstep’s capabilities to enhance its IT operations offerings. With Lightstep, the company should be able to provide customers with a way to monitor the performance of applications with the goal of detecting problems before the grow into major issues that take down a website or application.

“With Lightstep, ServiceNow will transform how software solutions are delivered to customers. This will ultimately make it easier for customers to innovate quickly. Now they’ll be able to build and operate their software faster than ever before and take the new era of work head on with confidence,” Pablo Stern, SVP & GM for IT Workflow Products at ServiceNow said in a statement.

Ben Sigelman, founder and CEO at Lightstep sees the larger organization being a good landing spot for his company. “We’ve always believed that the value of observability should extend across the entire enterprise, providing greater clarity and confidence to every team involved in these modern, digital businesses. By joining ServiceNow, together we will realize that vision for our customers and help transform the world of work in the process […], Sigelman said in a statement.

Lightstep is part of the application performance monitoring market with companies like DataDog, New Relic and AppDynamics, which Cisco acquired in 2017 the week before it was scheduled to IPO for $3.7 billion. It seems to be an area that is catching the interest of larger enterprise vendors, who are picking off smaller startups in the space.

Last November, IBM bought Instana, an APM startup and then bought Turbonomic for $2 billion at the end of last month as a complementary technology. Being able to monitor apps and keep them up and running is crucial, not only from a business continuity perspective, but also from a brand loyalty one. Even if the app isn’t completely down, but is running slowly or generally malfunctioning in some way, it’s likely to annoy users and could ultimately cause users to jump to a competitor. This type of software gives customers the ability to observe and detect problems before they have an impact on large numbers of users.

Lightstep, which is based in San Jose California, was founded in 2015. It raised $70 million from investors like Altimeter Capital, Sequoia, Redpoint and Harrison Metal. Customers include GitHub, Spotify and Twilio. The deal is expected to close this quarter.

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