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Datadog's $65M/year customer mystery solved

blog.pragmaticengineer.com

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Re: Datadog's $65M/year customer mystery solved

#31

Post by SOLAR_FIELDS »

willejs wrote: post #30

I have run ELK, Grafana + Prom, Grafana + Thanos/Coretex, New relic and all of the more traditional products for monitoring/observability. More recently in the last few years, I have been running full observability stacks via either The Grafana LGTM stack or datadog at a reasonable scale and complexities. Ultimately you want one tool that can alert you off a metric, present you some traces, and drill down into logs,…

My experience mirrors yours wrt Datadog. It's incredible value at low scale, you get a full robust system with great devex for pennies. Once you hit that tipping point though, you are locked in pretty hardcore. Datadog snakes its way far into your codebase, with all the custom tracing and stuff like that. Migrating off of it is a very expensive endeavor, which is probably one of the reasons why they are such a money printing operation.

Re: Datadog's $65M/year customer mystery solved

#32

Post by vjvjvjvjghv »

decimalenough wrote: post #14

> Assume that Datadog cuts the number of outages by half, by preventing them with early monitoring. That would mean that without Datadog, we’d look at 24 hours’ worth of downtime, not 12. Let’s also assume that using Datadog results in mitigating outages 50% faster than without - thanks to being able to connect health metrics with logs, debug faster, pinpoint the root cause and mitigate faster. In that case, without…

I bet they would get much better results if they spent a fraction of the money to better understand their systems and designing them better than spending millions on Datadog

Re: Datadog's $65M/year customer mystery solved

#33

Post by willejs »

SOLAR_FIELDS wrote: post #31
willejs wrote: post #30

I have run ELK, Grafana + Prom, Grafana + Thanos/Coretex, New relic and all of the more traditional products for monitoring/observability. More recently in the last few years, I have been running full observability stacks via either The Grafana LGTM stack or datadog at a reasonable scale and complexities. Ultimately you want one tool that can alert you off a metric, present you some traces, and drill down into logs,…

My experience mirrors yours wrt Datadog. It's incredible value at low scale, you get a full robust system with great devex for pennies. Once you hit that tipping point though, you are locked in pretty hardcore. Datadog snakes its way far into your codebase, with all the custom tracing and stuff like that. Migrating off of it is a very expensive endeavor, which is probably one of the reasons why they are such a money…

Yeah, the secret sauce of the dd libs was/is addictive for sure! I think its perhaps better now you can just use oTel for custom traces and oTel contrib libs for auto instrumentation and send that to the dd agent? I have not yet tried it because i suspected labels and other things might be named differently than the DD auto instrumentation/contrib packages, but i don't think the gap is as big now?

Re: Datadog's $65M/year customer mystery solved

#34

Post by arccy »

aeyes wrote: post #21

> we really work with customers to restructure their contracts Does anyone have such an experience with Datadog? A few million wasn't enough to get them to talk about anything, always paid list price and there was no negotiating either when they restructured their pricing.

you've got bad negotiators... getting at least 10% off list price should be the baseline, even on less than $1m/year

Re: Datadog's $65M/year customer mystery solved

#35

Post by wenbin »

Earlier this year, we at Listen Notes switched to Better Stack [0], replacing both Datadog and PagerDuty, and we couldn’t be happier :) Datadog offers a rich set of features, and as a public company, it makes sense for them to keep expanding their product and pushing larger contracts. But as a small team, we don't have a strong demand for constant new features. By switching to Better Stack, we were able to cut our monitoring and alerting costs by 90%, with basically the same things that we used from Datadog previously.

[0] https://www.listennotes.com/blog/use-betterstack-to-replace-...

Re: Datadog's $65M/year customer mystery solved

#36

Post by mbesto »

SOLAR_FIELDS wrote: post #31
willejs wrote: post #30

I have run ELK, Grafana + Prom, Grafana + Thanos/Coretex, New relic and all of the more traditional products for monitoring/observability. More recently in the last few years, I have been running full observability stacks via either The Grafana LGTM stack or datadog at a reasonable scale and complexities. Ultimately you want one tool that can alert you off a metric, present you some traces, and drill down into logs,…

My experience mirrors yours wrt Datadog. It's incredible value at low scale, you get a full robust system with great devex for pennies. Once you hit that tipping point though, you are locked in pretty hardcore. Datadog snakes its way far into your codebase, with all the custom tracing and stuff like that. Migrating off of it is a very expensive endeavor, which is probably one of the reasons why they are such a money…

I think "medium scale" is probably more appropriate. For a $3M~$5M revenue SaaS you're still paying $50k+/year. That's not nothing for a small owner or PE backed SaaS company that is focused on profits/EBITDA.

Re: Datadog's $65M/year customer mystery solved

#37

Post by 9283409232 »

closeparen wrote: post #29
9283409232 wrote: post #12

Earlier quoted context omitted.

People say this but I wonder about this from time to time. I don't think anyone is asking to rebuild datadog from scratch for your company but surely it's worth it to migrate to something not as expensive even if it takes a bit of elbow grease.

Assuming there's nothing else you could do with that elbow grease that would create more value than the SaaS bill costs.

Value is not a hard science. I've seen people shelve tech debt in favor of work on a feature that no one ends up using.

Re: Datadog's $65M/year customer mystery solved

#38

Post by nemothekid »

9283409232 wrote: post #37
closeparen wrote: post #29

Earlier quoted context omitted.

Assuming there's nothing else you could do with that elbow grease that would create more value than the SaaS bill costs.

Value is not a hard science. I've seen people shelve tech debt in favor of work on a feature that no one ends up using.

1. Leadership doesn’t want to burn engineer cycles on undifferentiated features.

2. Management doesn’t get recognized for working on undifferentiated features.

3. Engineers working on undifferentiated features aren’t recognized when looking for new jobs.

Saving money “makes” sense but getting people to actually prioritize it is hard.

Re: Datadog's $65M/year customer mystery solved

#39

Post by QuinnyPig »

swyx wrote: post #10
ljm wrote: post #6

I wonder how much that no-expense-spared, money-is-no-object attitude to buying SaaS impacts an engineers ability to make sensible decisions around infra and architecture. Coinbase might have been fine blowing 65 mil but take that approach to a new startup and you could trivially eat up a significant amount of runway with it. I won’t single out Datadog on this because the exact same thing happens with cloud spend, an…

the visible cost of burning runway on a bill is very often far less than the invisible cost of burning engineer time rebuilding undifferentiated heavy lifting rather than working on product/customer needs

This is very well stated.

Re: Datadog's $65M/year customer mystery solved

#40

Post by evulhotdog »

aeyes wrote: post #21

> we really work with customers to restructure their contracts Does anyone have such an experience with Datadog? A few million wasn't enough to get them to talk about anything, always paid list price and there was no negotiating either when they restructured their pricing.

They were completely unwilling to negotiate with us at all, and it forced our hand to go other open source routes so we don’t get locked in again.
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