Observe Exits Stealth; Targets Splunk, Datadog For Observability: CEO Jeremy Burton

What's the pricing model for Observe?

I talked a lot about data being siloed and fragmented, and how hard it is to relate things. The other thing in this space is that the pricing models are insane. ... The big problem that these companies have is they’ve created businesses by charging customers for the volume of data ingested. So whether you actually use the data or not, whether you query it or not, you’re going to pay. And everyone’s like, ’Oh, but we’ve got a subscription model.’ Well, yeah, but a little bit like ESPN. If you don’t watch ESPN, you still pay the subscription. It’s the same with these guys. You pay the money whether you actually use the data or not. And so the shocking thing from my perspective is, more data is a good thing because the more data you have, the better you are able to figure out what’s going on. But these companies, by the nature of their pricing models, are actually discouraging people from ingesting data.

What’s different about Observe?

With Observe, we thought, we’re going to have one cost for ingesting data, and that’s going to be almost the same cost as Amazon S3. Whatever it is, $20 a terabyte, rough and tough. Whatever Amazon charges, it’ll be a little bit more for Observe because we do some processing of data on the way in. But for all intents and purposes, think of it as Amazon S3. So it’s going to be very cheap to ingest data.

And then we’re going down this path of usage-based pricing, so you would buy some Observe credits, and then as you use Observe you burn down the credits. And when you’re out of credits, you buy some more. So it’s a very simple, usage-based model. When you use the product, then you pay, and when you don’t use it, you don’t pay.

That model has been pioneered by Snowflake, and customers seem to like it. So we’re really piggy-backing on a lot of their positive experiences with pricing.