Businessmodel of New Relic

Customer Segments

New Relic provides its analytics products and services to business clients, primarily comprising software and application developers, online retailers, websites and technology companies. On its website the Company names a number of customers, including websites The Chive, Crackle, Answers and Kickstarter, online businesses Airbnb and Bloom That, software developers Electronic Arts and Zendesk, and applications Strava, Runkeeper and Groupon as customers.

Value Propositions

New Relic is an attractive option for websites and app developers as it provides real-time detailed analytics in an accessible and easy-to-use format.

The Company’s products, which are reasonably priced in comparison to its competitors and are all available for free trial periods, cover a range of services and can be accessed either via the cloud or through software installed on-site.

The cloud delivery of the software enables users to begin monitoring and storing data quickly and autonomously without the need for technical assistance. If, however, assistance is required, the Company provides ongoing customer support.

Channels

New Relic’s products can be acquired via its website at www.newrelic.com, and later accessed through its cloud-based platform, through software installed directly on-site, or through a hybrid model comprising local software and cloud-services.

Software demonstrations and support services are provided through direct interaction with members of the Company’s sales and marketing team.

Customer Relationships

New Relic’s products are primarily self-service. It is possible to register for, pay for and download products from the Company’s website with no direct interaction with New Relic representatives needed. Software demonstrations are also available on request.

New Relic provides its customers with a range of resources via its website, including tutorials, white papers, case studies, ebooks, video and webinars.

It also hosts a community forum where users can interact with one another and collaborate on problems, as well as contact the Company directly. Other support services are available via New Relic’s sales and marketing team.

Key Activities

New Relic is a provider of enterprise software that enables users to compile and analyse complex sets of data from applications and websites.

New Relic offers a range of cloud-based analytics products and services. Its core products include New Relic APM, for application performance management; New Relic Mobile, for mobile application performance management; New Relic Browser, for performance monitoring; and New Relic Synthetics, for software testing.

The Company also provides server monitoring, big data analytics and plugin functionality services to business customers, and manages a network of integration, sales and marketing partners.

Key Partners

Under its Partner Program New Relic collaborates with numerous companies from a variety of sectors, including software companies, software vendors, application developers, digital agencies, cloud service providers and government bodies.

The Company divides its partners into three categories: Service, Integrate and Sell. The first, and largest, of these relates to system integrators that help to optimise the performance and experience of using the New Relic platform for customers, digital agencies that use the platform to manage digital initiatives and projects, and federal bodies that use the platform to collect data on public sector migration. The second concerns companies that develop integration capabilities with other services and tools, while the third comprises software vendors and resellers that help to market and sell New Relic products. The Company’s recent partners include Major League Baseball, cloud services provider CloudSigma and e-commerce software company Magento.

Key Resources

New Relic’s most obvious key resources are its analytics software products. While the Company provides a range of proprietary products, it does not have any patent applications registered in its name with the US Patent and Trademark Office.

In addition to its software offerings, New Relic’s key resources are its IT infrastructure and its personnel. The Company’s software development and engineering team and after-sale support team play particularly important roles in New Relic’s operation.

Cost Structure

New Relic incurs costs through the development and maintenance of its software products, the retention of its personnel and the maintenance of its IT infrastructure, including payment of server rental and data centre operations.

The Company also operates offices in San Francisco, Portland, Dublin and Barcelona, all of which individually accrue fixed costs relating to utilities and the rental of office space.

Revenue Streams

New Relic generates revenue through the sale of various products in the form of software-as-a-service. All of its products are priced on a pay-monthly basis.

The Company’s application performance monitoring service comes in a basic Essentials package and a more advanced Pro package, costing $0.10 per hour and $0.20 per hour respectively. This is paid on a monthly basis at the rate of $75 or $149 per month.

New Relic’s mobile, browser and synthetics monitoring services are also priced on a monthly basis but are not divided into basic and advanced offerings. The Company’s mobile analytics service is priced at $999 per month, per app, its browser analytics service is priced at $149 per month, and its synthetic analytics service is priced at $69 per month.

New Relic’s revenue model appears to be successful. In 2015 the Company recorded an annual revenue of $110.4 million in its annual report and was named by Deloitte as one of the fastest-growing technology companies in the US.