Sumo Logic is the latest in a string of enterprise tech firms to go public and its CEO shares the 'three dimensions' for growth that it's constantly balancingSeptember 18, 2020
- The data analytics company Sumo Logic went public on Thursday a day after the software companies Snowflake and JFrog.
- The company's stock price saw a modest 22% pop, closing at $26.88 per share.
- Sumo Logic's top goal right now is to tackle its total addressable market, with plans to scale its team, invest in building its product, and adding more customers.
- Visit Business Insider's homepage for more stories.
Data analytics company Sumo Logic was the latest in a line of enterprise tech companies to go public, debuting Thursday, a day after the software companies Snowflake and JFrog.
The company's stock price saw a modest 22% pop, closing at $26.88 per share.
The company decided to enter the public markets amid the coronavirus pandemic because "the market opportunity is large," president and CEO Ramin Sayar told Business Insider.
"If you have the resilient business model and clear differentiation in value, you can still go out during these challenging times and use it as an opportunity to increase your growth," Sayar said. "That's what we felt was really important for us."
There are some things the company can and can't control, Sayar says. For example, Sumo Logic can control the products and services it builds, but it can't control when pandemics happen or financial markets change.
When the pandemic hit, Sayar says Sumo Logic paused to make sure its employees were healthy and safe, and then worked to make sure its customers could still use Sumo Logic's platform. Many customers in tech, media, retail, and education needed to quickly move to the cloud during the pandemic, Sayar says, and the firm helped customers that were facing financial and security challenges because of remote work.
Now that it's a public company, Sumo Logic will focus on scaling its team, making its product stand out, and growing its customers by building out its sales efforts.
"You're only as strong as your team and your people," Sayar said. "The focus continues to be on our teams and our personnel. We're going to continue to invest in that."
Talent is one of the three dimensions that Sumo Logic is constantly trying to balance as it tries to grow.
"Second is, how do I grow the business, the routes to market, and the different segments in the market? How quickly can I do that?" said Sayar. "Third, how do I innovate? We constantly look at those three dimensions and have to make tradeoffs."
One of Sumo Logic's top priorities right now will be to tackle its total addressable market, he said.
Sumo Logic gives customers a platform that works on the cloud, supports all types of data formats, and allows customers to easily build, manage, and secure their applications. Right now, Sayar said, many companies try to build their own in-house analytics software or try to cobble together various open-source or traditional products that need to be run on private data centers. All of those companies can be Sumo Logic customers, in Sayar's eyes.
Sumo Logic is not yet profitable. It generated over $155 million in revenue for the year ending on Jan. 31, 2020, up 50% from the year before, and its net loss was $92 million in the year ending on Jan. 31, 2020, up from $47.8 million the previous year, according to its S-1.
Read more: JFrog's shares popped on its first day of trading and its CEO hopes the firm's big debut paves the way for other DevOps startups to go public
Over time, it will work on breaking even and reaching profitability, but it's not Sumo Logic's near-term focus.
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