As traffic over the Internet increases, the demand for traffic analysis arises by the organization that enables them in decision making and planning. Web analytics software resolves most of the traffic analysis requirement for an individual or organizations. Splunk (SPLK) is one such company that provides operation intelligence software solution that comprises of analytics and security solutions at an enterprise level. Splunk’s operational intelligence is a multi-tiered, clustering architecture that provides insight by interrelating various complex event, streams data, historical and unstructured data in a real time environment.
The operational intelligence market is growing since the big data and business intelligence market are on a roll. Operation intelligence now seems to be the next generation business intelligence which is combined with business analytics. In 2012, global business analytics software market grew 8.7% to reach $34.9 billion. The market is now forecast to grow at a 9.7% compound annual growth rate (CAGR) through 2017. As per Merrill Lynch research, the global market for Business intelligence would be $20 billion by 2014. This market size and CAGR, has enable companies like Splunk to attain new heights.
The growth of the company is exemplified as its customer base is increasing every quarter. Currently, it records over 7,000 customers globally with the recent addition of 500 new customers.
Various apps that are regularly released by Splunk are catalytic to the growth of the company resulting in a positive impact on top and bottom lines of the company. In fourth quarter 2014, it released Enterprise security 3.0, which enabled the company to acquire leading hospitals in its customer list.
Acquisitions to Speed Up Growth
As a part of its expansion plans, the company is allocating budget for new acquisitions to strengthen it product portfolio. It recently completed 2two major acquisitions of BugSense in third quarter 2014 and Cloudmeter in fourth quarter 2014. These are now integrated with Splunk to provide add-on value-added service to its customer base and also more feature rich Splunk with competitive advantage among its competitors. This will help the company by retaining old customer and also new customers in future. Retention of old customers always helps the company's top and bottom line be healthy since the applications are provided as a SaaS business model with a recurring license fees.
The most interesting thing about the company is providing SaaS-based applications with licensing fees. SaaS applications always lead to uniform growth of the company with proper support and feature enhancements. Splunk is the only company that provides operation intelligence solutions to customers, and it can be deployed on site or private cloud with an option of SaaS or MSP. A free trial option always makes a customer satisfied with the try and buy option and the customers switching from free to paid version.
In quarter four, 70% of license bookings came from existing customers, while the company added a record 500 plus new customers. For the complete fiscal year, it added around 1,800 new customers to end the year crossing 7,000 in total.
Dynamic expansion plans of the company enable it to strengthen its product portfolio from single to multiproduct company. Splunk Enterprise version 6 was recently launched and provides higher probability for expansion of customer base. Although Splunk enterprise is still in its beta phase it still can scale terabytes of transfer without ruling out a strong customer base for low volume transfer.
The company is recording uniform growth in the top and bottom lines with each quarter. The market growth for operational intelligence software has huge potential in the future. The innovation and the software enhancement plan of the company should help it have a secure future.