As companies’ server infrastructure grows, they often run into challenges keeping tabs on the health of their various assets, like cloud instances and local data centers. Monitoring tools, also known as observability tools, can help — but lots of tools quickly becomes overwhelming. According to one survey, seven in 10 organizations believe that monitoring is made at least somewhat more challenging by “tool sprawl.”
To combat said tool sprawl, Jie Song and Steve Francis founded LogicMonitor, which sells software-as-a-service tools to monitor on-premises and cloud environments.
Owned by private equity firm Vista Equity Partners since 2018, LogicMonitor on Wednesday announced that it raised $800 million from investors including PSG and Golub Capital. The funding round, which values LogicMonitor at $2.4 billion inclusive of debt, brings the company’s total raised to around $942 million.
Bloomberg earlier reported the deal.
“In short, AI needs data centers and data centers need LogicMonitor,” Christina Kosmowski, LogicMonitor’s CEO, said in a statement. “We are the connective tissue between AI and data center performance as we have the muscle, pedigree, and, most importantly, the data insights to advance the most important and life-altering AI initiatives.”
To Kosmowski’s point, the demand for AI has been a tailwind for observability vendors. In a recent New Relic survey, 41% of companies cited both AI adoption, as well as increased focus on security and compliance, as key trends driving observability investments.
The market for observability tools and platforms could be worth $4.1 billion by 2028, according to analytics firm Markets and Markets.
Founded 16 years ago, Santa Barbara, California-based LogicMonitor sells products to manage and optimize data center infrastructure. The company’s platform, which is in part powered by AI, aims to provide operational visibility across data centers — and the apps that run on them — to reduce the need for troubleshooting.
There’s some evidence that observability tools can reduce downtime. Per New Relic’s data, companies with full-stack observability are 79% less likely to experience downtime, saving $42 million a year. Forty-eight percent lower their hourly outage costs compared to those without observability tooling.
Vista Equity Partners acquired LogicMonitor six years ago for $415 million — and recently began working with financial advisors to explore options for the company.
The investment appears to have done well for Vista, which is remaining a contro …