Splunk: The Run Up May Have Hit a Glass Ceiling
March 1, 2014
I read “Splunk’s Q4 Expenses Run Hot as It Adds Salespeople.” I think of a Splunk as a search and data access system that helps make sense of log files. I know that Splunk does more, but once I get an idea in my head, it is sometimes overly persistent.
The write up presented some interesting information.
- Splunk is running up its expenses
- Some of the expenses are related to hiring sales people to make sales (obviously)
- Other costs were related to marketing a “hot” company’s wares.
Splunk is confident that the losses are anomalous.
I am not sure I agree. The simple reason is that Splunk’s success has given developers the idea that open source software can do what Splunk does better, faster, and cheaper. Usually, one has to pick two of these attributes.
But—and this is a big “but”—the thorn in Splunk’s side is Elasticsearch. The open source search system works wonders on some of the data that Splunk embraced. The Elasticsearch outfit is flush with cash from its recent round of funding. Even the azure chip “real journalist” operation at InfoWorld called Elasticsearch “hip.”
Other, probably less “hip” competitors like Lucid Works (formerly Lucid Imagination) want in on the Splunk game. Lucid wants to partner; Elasticseaerch wants to let its legions of developer fanatics take the company wherever the Elasticsearch technology makes sense.
In my opinion, Splunk has a developer perception problem. I am not sure hiring sales people and pumping money into marketing is going to blunt the short and mid term impact of the Elasticsearch juggernaut.
Stephen E Arnold, March 1, 2014
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