Splunk’s cloud shift is paying off in APAC

Splunk has been doubling down on its investments in the cloud in recent years, pushing more capabilities such as DevOps into its observability platform and going beyond its traditional stronghold of providing data-driven insights for cyber security and IT operations teams.

During its fiscal second quarter of 2022, its annual recurring revenue from cloud was $976m, up 72% year-over-year. The company does not break down its revenues by geography, but its vice-president for Asia-Pacific, Simon Davies, said the region has been “consistently growing faster than the rest of the company”.

“We are seeing more customers adopting Splunk for cyber security, IT resilience, and increasingly, in areas like DevOps,” he said, noting that companies such as Lenovo are using Splunk’s observability and DevOps tools to gain insights into their e-commerce operations during major online shopping events such as Singles’ Day.

Splunk Cloud is currently available in Australia, Japan, Singapore, South Korea and, more recently, India. The platform was recently bolstered with a slew of enhancements, including new data management features to help reduce data storage costs and, more significantly, workload-based pricing.

Davies said that as more companies move to cloud and adopt a microservices-based architecture while still maintaining legacy infrastructure, workload-based pricing will enable them to bring all the data they need to navigate the complexity of their IT environments and implement policies, processes and controls to defend their organisations.

He added that with workload-based pricing, Splunk is moving away from the old metric of charging customers for the amount of data they ingest into Splunk, to the amount of data they process on Splunk.

“That uses a compute model rather than the sheer number of gigabytes or terabytes,” said Davies, adding that workload-based pricing will enable enterprises to drive value from searching, correlating and acting on their data. “We’ve seen customers shift their mindset away from having to think carefully about which data they wanted to put in Splunk because they were concerned about cost. Now, they can index all of their data in Splunk – and if it’s not being used, then it’s obviously not contributing much compute.”

While Splunk’s workload-based pricing will incentivise its customers to move to cloud and enable it to better compete with rivals that offer lower pricing, the company is still working on its image in Southeast Asia, where it is traditionally seen as a security analytics platform.

But in markets like Australia and Japan, Davies said Splunk is doing more in what it calls “business services insights”, which can only be gleaned by looking at all the silos and systems in an organisation that orchestrate digital business processes.

“If you think about the e-commerce experience, you’ve got a content management system, a processing engine, a taxation engine, logistics providers, payment providers and all sorts of third party systems sitting across those systems,” he said. “You need to orchestrate them to gain full visibility, and that’s where observability becomes a really powerful tool.”

In such cases, Davies said the focus is shifting from collecting log data to “metrics, traces, as well as logs”, and the insights gleaned from all that data.

“We’re uniquely positioned to help customers with that because some people will do metrics, some people will do logs, but nobody else is providing that full fidelity and visibility they need, which means you risk missing transactions in high-volume e-commerce or IT environments,” he said.

To that end, Davies said open telemetry will play a key role. “With technology advancing so quickly with observability, you need to rely on the open source community, and so we are looking at open telemetry and making sure we’re building up that community while being compliant within that framework,” he said.

Davies remains buoyant on the region’s growth prospects for 2022, particularly in Japan, where companies are investing heavily in cyber security and building more resilience in their IT systems to address labour shortages, as well as in India, where companies are accelerating their move to cloud.

In the Philippines, Globe Telecom is using Splunk to monitor more than 2,000 servers, while the organisation that runs a Philippine government insurance scheme is using the platform to monitor the cyber security of 20 different systems.