Starter positions in $ESTC and $DDOG.

Let’s go!
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Wolf of Harcourt Street's avatar
Long $DDOG since $84
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Miquel's avatar
@miquel_nietoOctober 11
Author
@wolfofharcourt Lucky you!! Didn’t find the right time to enter, so I said “TODAY”. 😂
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Wolf of Harcourt Street's avatar
@miquel_nieto it’s been on my “to add” list with a while for the same reasons, I need to add more!
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Damien's avatar
@dctannerOctober 11
Datadog's product cadence and ease of onboarding few new customers is up there with Cloudflare. Elastic lacks in these areas, but it doesn't have the open source foundation up its sleeve.
One reason I've kept onto Elastic is their unique ability to acquire startups that have been built on top of Elasticsearch.
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Miquel's avatar
@miquel_nietoOctober 11
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@dctanner Cloudflare is next on my list. I didn’t start in this recent dip and I don’t know if we will get another one soon…
Do you mean that being open source is positive or negative business wise? I love OS, and it is in fact one of the reasons I like $ESTC!
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Nathan Worden's avatar
Lots of 'Investors I know' in Datadog. What is your main reason for starting a position, @miquel?

Wondering if everyone's thesis' are similar @ryanm, @askates, @bwright83

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Miquel's avatar
@miquel_nietoOctober 11
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And you among them! ;)
Datadog is the clear leader in application and cloud monitoring. It is a real SaaS business, with top-class net retention, low S&M spend and high margins (God bless Jamin Ball). It is also founder-led (CEO and CTO are co-founders). It is not cheap, though.

The play with Elastic is a bit different: their tech stack is top, but they are not yet that well-known, so I think they will surprise the market in the next quarters. And I have friends working there, so I'm "playing" with them ;)

Both positions come with a 7% aprox stop-loss. I don't want a fight with Mr Market, he's acting strange lately!
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Doug Helton's avatar
God bless Jamin Ball 🏀😄
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Miquel's avatar
@miquel_nietoOctober 11
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@doughelton He is a must follow if you are into SaaS!
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Nathan Worden's avatar
Great overview, thanks @miquel! Datadog is definitley in the 'pay for quality' bucket. I like your play on Elastic not being as well understood 😀
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Miquel's avatar
@miquel_nietoOctober 11
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@nathanworden We’ll see if Mr Market agrees with me ;)
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Ryan Mahony's avatar
Applications are becoming the backbone of our everyday life and they are extremely important to companies, their brand and reputation with consumers. $DDOG is essential to them. I watched a long insightful interview with Olivier Pomel where he provided a history and explained the product and value added very well.
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Vinoth @ The Equity Force's avatar
$DDOG is riding on the secular tailwind - Shift from on-premise software to Cloud-first, cloud-only softwares.

Their recent product updates were also very good. As someone who works in Technology, I particularly liked this one "beta launch of CI Visibility, a way to bring production level visibility earlier into the development process by shifting left and bringing observability throughout the CI/CD pipeline".

I'm long $DDOG since $70.

I like $ESTC (long since $89) and $NEWR (no position, on my watchlist). I hear from developers that $NEWR is a better product but need to dig deeper into why market is not liking $NEWR.
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Miquel's avatar
@miquel_nietoOctober 12
Author
@theequityforce Going back to Jamin Ball, I don’t see any exciting number from $NEWR , starting with a very low NTM revenue growth (9%). If I knew something the market doesn’t maybe I would consider buying, otherwise I prefer filtering first for high growth even if that implies a higher multiple.
I know people at NR (they acquired a startup from Barcelona and have quite a big office here), and this is what I like the most about them! :)
Do you see any catalyst for NR to get a growth boost?
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Damien's avatar
@dctannerOctober 19
@theequityforce $NEWR is kinda legacy now and it's key features are included with Datadog and Elastic.
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Miquel's avatar
@miquel_nietoOctober 19
Author
@dctanner Agree!
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Vinoth @ The Equity Force's avatar
@miquel_nieto I need to read up on $DDOG new features. Based on my earlier research $NEWR platform enabled more detailed monitoring-components and process level information.
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Vinoth @ The Equity Force's avatar
@miquel_nieto I need to read up on $DDOG new features. If it has the same level of information that new relic captures. Based on my earlier research $NEWR platform enabled more detailed monitoring-components and process level information.
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Miquel's avatar
@miquel_nietoOctober 19
Author
@theequityforce $DDOG comes from infra monitoring and moved to APM, while $NEWR went the other way around. Catching up on APM has been “easier” and looks like a more compelling sales pitch than catching up on infra (devops teams don’t like to be the last guy). Maybe that’s why selling Datadog looks easier (less spending on sales&marketing).
It also looks like Datadog moves faster: more features, more products. Build, measure, learn.
In terms of revenue growth there’s an ocean between them.
I’m not an expert so I can’t evaluate the platforms from a technical perspective, but the numbers tell me Datadog is a step ahead. I might very well be wrong, though! 🤷‍♂️
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Vinoth @ The Equity Force's avatar
@miquel_nieto yes that makes sense 👍🏽
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