Grafana Labs Raises $270M: What Does It Mean for State of ITOps?

Grafana Labs, the company behind the popular Grafana open source dashboard and visualization platform, has announced a series of significant achievements and a new funding round, solidifying its position as a leader in the observability industry.

The New York-based company has completed a $270 million primary and secondary transaction, surpassed $250 million in annual recurring revenue (ARR), and expanded its customer base to more than 5,000 paying clients. The latest funding round, an extension of Grafana Labs' Series D financing, values the company at over $6 billion.

The new funding speaks volumes about the current state of the IT observability market and, to some extent, how IT operations professionals are spending their dollars.

"Grafana Labs has been aggressively expanding their capabilities over the past few years, and their improvement in support for application observability as well as the expansion into new ITOM areas like incident response management have really rounded out their product line," Gregg Siegfried, a Gartner analyst, told ITPro Today.

In Seigfried's view, the main challenge has been ensuring that the overloaded use of the term "Grafana" does not trip up people when talking about them. The name "Grafana" could refer to the company, the visualization tool, the commercial products, as well as the various cloud service provider partnership solutions that carry that moniker.

Related:Observability vs. Monitoring: Who Needs Which When?

What's Powering Grafana's Growth?

Looking at Grafana Labs overall, there are several initiatives that are helping the company to grow.

"Grafana's growth is a function of a few things," Grafana Labs CEO Raj Dutt, told ITPro Today. "From a user perspective, our massively adopted namesake has become another word for dashboard, and credit goes to our vibrant community and user base that has applied it to everything from landing on the moon and tracking beehives to enterprise observability."

Beyond the core Grafana dashboard, the company also is very active in the overall observability market.

"Simply said, to stay competitive, companies have to keep investing in technology and, of course, they have to make sure the technology operates efficiently and as expected," Dutt said. "This is where monitoring comes in, but observability is helping companies not just know that the lights are on, but understand and connect them all the way up to impact on the company's bottom line."

Dutt noted that observability is where Grafana Labs has exploded in terms of both revenue and product offerings. Grafana Labs has also benefited from the explosion of cloud computing and the adoption of open source technologies such as Kubernetes, OpenTelemetry, and Prometheus.

"Many folks are using Grafana as a starting point to stitch those technologies together in a single pane of glass and then turning to Grafana Cloud's back ends to monitor Kubernetes and be a first choice for Prometheus and OpenTelemetry," Dutt said.

How Grafana Is Making a Difference for TeleTracking

Grafana is widely used by all manner of organizations around the world. Among the company's users is integrated healthcare operations vendor TeleTracking.

TeleTracking uses Grafana Labs company-wide as a central dashboarding tool to monitor metrics and logs as well as to monitor external systems such as SQL Server, Jira, and Snowflake. Additionally, the company uses Grafana Labs for front-end monitoring and incident response management.

"My team has tried to self-host Prometheus, Alert Manager, Thanos, and Grafana only to find that we spent an excessive amount of development effort running systems rather than building value-added software," Oren Lion, director of software engineering and productivity engineering at TeleTracking, told ITPro Today.

Lion added that TeleTracking has services that run in Amazon Web Services (AWS) and Microsoft Azure, and to simplify and speed up debugging efforts, the company needed to centralize logging and metrics across the two cloud providers.

"I evaluated competitors, e.g., Elasticsearch and AWS CloudWatch. However, neither solution is able to consolidate our needs to monitor logs, metrics, front-end monitoring, and IRM, which is why we ultimately selected Grafana Cloud," he said.

What's Next for Grafana?

With new funding in place and a growing roster of customers, what's next for Grafana?

Grafana Labs' recent Observability Survey cited cost as the big concern in observability and it's an area that Dutt said the company is actively working on.

"In addition to our open source projects like Grafana, Loki, Tempo, Mimir, etc., we offer a very generous, feature-complete free tier of Grafana Cloud. We call it an 'actually useful' free tier," Dutt said. "And, we help customers more easily optimize cost without sacrificing performance with Adaptive Metrics — a feature in Grafana Cloud that automatically eliminates unused metrics, which lowers bills."

Grafana Labs' goal is to keep simplifying processes for users and organizations, whether they are starting from scratch or migrating their infrastructure and application observability, he noted.

Among Grafana Labs' big investments are:

"Companies cannot ignore innovation, and with innovation comes new technologies and more investment," Dutt said.