Businessmodel of SignalFx

Customer Segments

SignalFx has a niche market business model, with a specialized customer segment. The company targets its offering at firms desiring analytics for the applications they are developing.

Value Proposition

SignalFx offers four primary value propositions: accessibility, performance, cost reduction, and brand/status.

The company creates accessibility by offering a wide variety of options. It enables users to create tailored analytics pipelines on metrics data obtained from thousands of sources.

The company offers convenience by making analysis easier. It collects data from various sources, including databases, servers, applications, and tools, to establish a unified view of applications in the Cloud. It also allows customers to conduct analyses within seconds of obtaining the data.

The company has demonstrated strong performance through tangible results for clients. High-profile examples of positive results for customers include the following:

• Clever used SignalFx’s solution to significantly reduce operational failures and alert noise through real-time analytics, and enable teams to troubleshoot their own services
• Viki used SignalFx’s solution to conduct real-time analysis of trends by instrumenting merics at one-second intervals with numerous dimensions
• Sunrun used SignalFx’s solution to extend product class alerting and monitoring to its entire infrastructure, improve core app performance, and increase customer satisfaction
• Tapjoy used SignalFx’s solution to enable its entire team to create metrics for their own services and to correlate business KPIs with infrastructure and service metrics
• Symphony used SignalFx’s solution to combine business, infrastructure, and applications metrics and build a real-time view of its whole business The company reduces costs through its policy for overage fees. It does not charge customers any surge prices, penalties, or other hidden costs for overages.

The company has established a strong brand as a result of its performance. It is used by thousands of customers, including prominent firms such as Cisco, HubSpot, Yelp, and Zenefits.

Channels

SignalFx’s main channel is its direct sales team. The company promotes its offering through its website, social media pages, webinars, and participation in conferences.

Customer Relationships

SignalFx’s customer relationship is primarily of a self-service, automated nature. Customers utilize the service through the main platform while having limited interaction with employees.

The company’s website features a “Resource Library” that includes self-help resources such as eBooks, solution briefs, case studies, webinars, videos, and integrations.

Key Activities

SignalFx’s business model entails maintaining a robust software platform for its customers.

Key Partners

SignalFx belongs to two partnership programs:

• Ecosystem Technology Partner (ETP) Program – This program, founded by Docker, consists of companies that have integrated Docker products into their offerings. SignalFx customers can use its solution to monitor Dockerized apps at any scale.
• Confluent Partner Program – This program aims to promote greater usage of Apache Kafka, an open-source messaging system. SignalFx integrates the product into its offering and alerts customers with metrics from the Confluent platform, enabling monitoring of Kafka metrics. ### Key Resources

SignalFx’s main resource is its proprietary software platform, which serves thousands of customers.

It also depends on its human resources in the form of engineering staff to maintain and update the platform and sales/marketing staff to promote it.  Its technology employees come from respected companies such as Google, Facebook, and Yahoo!

Lastly, as a relatively new startup it has relied heavily on funding from outside parties, raising $28.5 million from two investors as of January 2015.

Cost Structure

SignalFx has a cost-driven structure, aiming to minimize expenses through significant automation and low-price value propositions.

Its biggest cost driver is likely sales/marketing, a fixed expense. Other major drivers are in the areas of customer support/operations and administration, both fixed costs.

Revenue Streams

SignalFx has one revenue stream: revenues generated from the subscription fees it charges for access to its SaaS platform.

The company utilizes a usage-based pricing model based on a client’s data ingest rate. It recommends a baseline payment of $15 per server per month, which assumes a usage rate of about 1,000 data points per minute. That said, it offers volume discounts. Customers can choose to be billed monthly or annually.