Businessmodel of AppDynamics

Customer Segments

AppDynamics provides products and services that are useful for businesses across multiple sectors, with customers spanning the education, financial services, retail, technology, logistics, healthcare, telecoms and gaming industries, among others.

Its customers are not limited geographically, serving clients across North America, Asia Pacific, Europe, the Middle East and Africa.

On its website AppDynamics lists a number of household names among its customers, including Hallmark, Expedia, eHarmony, Cisco, Macmillan Publishing and NASDAQ, as well as high-profile educational institutions such as Cornell University, Washington University and Missouri State University.

Value Propositions

AppDynamics’ greatest value is in the efficiency, usability and capability of its analytics software, which purports to enable users to identify potential performance issues well in advance and from one unified platform.

The Company provides real-time and continuous data monitoring, management and analytics services for public or private cloud-based applications.

Its prices are negotiable depending on the individual needs of its clients, with all products available as a free trial. AppDynamics offers flexible service options, providing cloud-based, on-site and hybrid platform delivery. AppDynamics also claims to provide enterprise-level security services and robust architecture for every one of its customers.

Channels

AppDynamics’ products can be accessed directly from its website at www.appdynamics.com through desktop or mobile browsers. The Company’s products are delivered either on a software-as-a-service basis, with AppDynamics hosting the platform software with users accessing it via the cloud, or through on-premises installation, where users deploy and host the product themselves.

Users may also access AppDynamics products via a hybrid service, comprising some on-site installation and cloud-based services. Products hosted by the Company can be accessed via the AppDynamics mobile apps for iOS and Android.

Customer Relationships

AppDynamics sells its products and services through online subscriptions. Users are able to set up an account and register for a free trial of any AppDynamics products on a self-service basis. Paid-for Pro subscriptions, however, must be routed through the AppDynamics sales team, which provides custom quotes depending on the individual requirements of each customer. Both free and paying users receive ongoing technical support, with Pro customers receiving access to round-the-clock assistance.

In addition to providing its users with webinars, FAQs and tutorials via its website, AppDynamics hosts a community forum where users can access discussions and special content – including access to user groups and training events – and the AppDynamics University, where users can take part in instructor-led training and interactive self-paced courses.

Key Activities

AppDynamics provides application intelligence and real-time business insights and analysis into application performance and user experience, primarily to corporate customers and website operators.

Its software allows businesses to monitor, manage, and optimise complex software platforms and applications with a view to identifying potential performance issues before they are realised.

The company’s software provides mobile, browser, synthetic and database solutions, as well as cloud migration and scaling, cloud monitoring, continuous delivery and troubleshooting services.

Key Partners

AppDynamics’ activities are supported by a network of partners, primarily companies operating in the technology space.

The Company maintains its Partner Ecosystem, with partners divided into three categories: Technology Partners, Service and Cloud Providers, and Solution Providers. Its Technology Partner category principally comprises software engineering and development companies that provide technical assistance to AppDynamics in serving customers with accurate, real-time business insights and analysis of application performance. AppDynamics’ Service and Cloud Providers primarily provide marketing and reselling services, while the Company’s solutions partners – mostly software and analytics companies – help to provide AppDynamics customers with tailored data monitoring and management solutions.

AppDynamics’ recent partners include IT and business consulting company Cognizant Technology Solutions, cloud solutions provider Trace3 and open source software company Red Hat.

Key Resources

Among AppDynamics’ key resources are its analytics platform, IT infrastructure and personnel. The Company, and its founder Bansal, have several applications filed with the US Patent and Trademark Office, including applications titled ‘Time series metric data modelling and prediction’ and ‘Automatic capture of detailed analysis information for web application outliers with very low overhead’.

AppDynamics employs an expert development and support team to ensure the efficiency and reliability of its platform and a sales team that is key to the Company’s customer management.

The Company also requires reliable IT infrastructure, notably server space, to host its platform.

Cost Structure

AppDynamics accrues costs through the development of its analytics platform, the retention of its personnel and maintenance of its IT infrastructure.

The Company must pay for the rental of server space and operational costs relating to its data centres, as well as other fixed costs concerning the management of its network of offices across the US, Europe, Asia and Australia.

AppDynamics also incurs costs relating to employee salaries and benefits, with recent reports stating that it employs more around 900 staff members across 12 countries.

Revenue Streams

AppDynamics operates on a freemium basis, providing a basic analytics and monitoring service free of charge, alongside more advanced offerings than come with greater functionality and support. AppDynamics offers a free Lite Plan and paid-for Pro Plans, which scale to support unlimited application deployments across an entire business. Pro Plans are quoted individually and are priced according to the number of apps covered by each product and on a per-unit basis, a unit being the metric that governs each product module. A unit could correspond to a set number of page views, a set number of monthly active users or a set number of CPU cores, depending on the service provided.

AppDynamics reportedly ended 2014 with $150 million in revenue under contract. The Company is reported to have grown further over the course of 2015 and is expected to post greater revenue figures going forward.