Businessmodel of Sumo Logic

Customer Segments

Sumo Logic has a niche market business model, with a specialized customer segment. It targets its offerings at companies seeking log management and analytics services.

Value Proposition

Sumo Logic offers three primary value propositions: convenience, performance, and brand/status.

The company offers convenience to its customers. It is cloud-based, meaning that little is required in terms of set up and maintenance and users can easily receive updates. Its solution has an analytics engine cluster that patterns together, enabling users to quickly identify problematic trends.

The company has demonstrated strong performance for its clients. Its service analyzes over 100 petabytes of data and conducts more than 20 million searches daily, delivering tens of millions of insights each day. This makes it one of the most powerful machine data analytics solutions.

The company has established a strong brand as a result of its success. It serves over 1,000 customers, including many members of the Fortune 500 such as Microsoft, Adobe, Kaiser Permanente, Mattel, and Scholastic. It has also won many honors, including recognition as a “Cool Vendor” in the Application Performance Monitoring (APM) and IT Operations Analytics (ITOA) categories by Gartner (2014), the Judge’s Choice and the Audience Choice Awards for Performance Monitoring at the Under the Radar Conference (2012), and placement in the Red Herring Amerias Top 100 (2012).

Channels

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

Customer Relationships

Sumo Logic’s customer relationship is primarily of a personal assistance nature. It provides phone and e-mail support for users. It also maintains a training program that provides instructor-led courses at public sites and instructor-led, customized courses at client sites. Despite this orientation, there is a self-service component.

The company’s website provides training modules that customers can complete at their own pace. The site also offers several self-help resources, including articles, case studies, white papers, research reports, data sheets, infographics, videos, webinars, and answers to frequently asked questions. Lastly, there is a community element in the form of a peer forum.

Key Activities

Sumo Logic’s business model entails maintaining and updating its platform for customers.

Key Partners

Sumo Logic maintains the following types of partnerships to make its solutions easily accessible to customers:

• Technology Partners – Specific partners are Aqua, Observable Networks, Docker, Chef, Palo Alto Networks, Extrahop, Box, and ServiceNow.
• Solution Partners - Specific partners are Chuanhow, Segura, The Efiia Group, OCG Systems, Cloud Comrade, GM Security Technologies, Cloudifie, Trace 3, Nordcloud, Global Dots, SHI, The Herjavec Group, Column Technologies, Cloudnexa, Alliance Technologies, Critical Start, Comm Solutions, Milestone, Itway, RXP Services, Rubix, Exceda, Zion Security, Trinibus, and AIM Consulting.
• Strategic Alliance Partners – Specific partners are Hitachi, Microsoft, Amazon Web Services, and Akamai. ### Key Resources

Sumo Logic’s main resource is its proprietary software platform, which serves more than 1,000 customers.

It depends on its engineering staff to maintain the platform, its sales staff to promote it, and its training staff to provide instruction on its use.

Lastly, as a relatively new startup it has relied heavily on funding from outside parties, raising $155 million from nine investors as of June 2015.

Cost Structure

Sumo Logic has a value-driven cost structure, aiming to provide a premium proposition through significant personal service and frequent product improvements.

Its biggest cost driver is likely marketing and sales expenses, a fixed expense. Other major drivers are in the areas of research and development, both fixed costs.

Revenue Streams

Sumo Logic has two revenue streams:

• Subscription Revenues – Revenues generated from fees charged for monthly access to its platform. The charge for a set of 3 to 20 users is $90 per month; for 20+ users the charge is determined based on a customized plan.
• Training Revenues – Revenues generated from fees charged for public and private training courses.