New Relic moves into real user monitoring (Q&A)

New Relic is one of those unusual companies where an entrepreneur who helped create an entire product category--application performance management (APM), a billion-dollar industry--comes back for a do-over that aims to put his first company, Wily, out of business.

New Relic CEO and founder Lew Cirne (the company name "New Relic" is an anagram of his name), spawned the first SaaS-based APM start-up in 2008 as an entrepreneur in residence at Benchmark Capital. Today, New Relic is announcing what it says is the first Real User Monitoring solution from a SaaS vendor.

Cirne compares real user monitoring with Google Analytics for Web application performance. In this video, New Relic beta customers 37 Signals, Acquia, IGN Entertainment, and Zendesk talk about how they use the technology.

New Relic got off to a fast start and has already surpassed more than 10,000 active (roughly half of whom pay) accounts in less than three years, almost 300 times as many customers as Wily had before it was bought by CA in 2006. Many are high-flying start-ups, but there are quite a few large established companies among its customers, including AOL, AT&T, Comcast, GroupOn, Huffington Post, and Zynga, among others.

I e-mailed with Cirne to get an update on his company and his plans to disrupt the APM market with New Relic.

Q: First, what is real user monitoring?
Cirne: We define real user monitoring as measuring actual Web browser times to completely load a page. Contrast this to the synthetic end user experience other vendors simulate with pre-set application 'pingers' or to just monitoring at the network layer to see how long it takes for a page to land at a browser. We measure the actual user experience from the browser.

We're bundling real user monitoring into our core APM product at no extra charge. We have 10,000 customers that already use us to see what happens on the server, in the application code, to identify problems and remediate them. We give very good diagnostic information. To extend that from the appserver to the end user in a single product with one user interface and one install is a very cool thing.

What is a typical APM problem you help solve?
Cirne: One type of problem could be a network slowdown in a specific geography. You may want to optimize your application to reduce some of that network time. You may also have specific pages in your application that are particularly slow because they have slow java script in them--so we report on how much time is being spent running javascript in the Web page. So you can see this problem in real time, click through for a deeper dive and find where the slow down is in a particular operation. If you fix that line of code, the savings could be huge.

So clearly the browser type will be a factor. If you're using IE7 instead of IE8 or IE9, what differences can that make?
Cirne: Yes, browser versions are critical in the quality of the user experience. In fact, we break out information by browser and more. We've done 130 million page loads per week, just in private beta. We expect that to grow 100 times by the end of the first month in full release.

Just the other day, we did a quick comparison of page load times across three different browsers. We saw an average page load time of 5.2 second for the application in IE7, and a page load time in IE8 of 3.7 seconds. With Mac Chrome 11 it only 1.8 seconds. These are amazing stats for any app owner to have.

This all is from a cloud service?
Cirne: Yep. All users who update to the latest version of our SaaS solution will get real user monitoring for free. They just update the agent that sits in their application and they are good to go. No change to pricing or additional costs.

In the SaaS market, customers can walk away at any time. We really take this to heart and focus on delivering the best, most easy to use product. We subscribe to Apple's iPad philosophy. Keep adding more features that delight your customers and don't raise prices.

Do you cover all Web applications?
Cirne: We started with Ruby on Rails apps and have a deep history with that language and framework. We decided to go heterogeneous and got into Java, .NET and PHP. We're about to announce beta support for Python. Some APM vendors just do .NET and Java.

What is your average deal size?
Cirne: Roughly $5,000 to $10,000 per year in subscription, with half of our clients converting from the freemium model to paying customers. Customers subscribe based on the number of servers in their application environment. Most of our deals start with a developer who has a serious need.

We had one major e-commerce customer that found us, and within a week was deployed across more than 300 servers. Without our help. Over a quarter million dollar deal that closed in three weeks.

Where does this go next?
New Relic set out to provide a single, SaaS solution that provides end-to-end application visibility. There are hundreds of millions of Web applications right now and the vast majority of them aren't fast enough. People aren't fully benefiting from them. Only the top 1 percent are monitored but at an average cost of $50,000 to $100,000 a month. That's way too much money for today's nimble, Web-based businesses.