Executives at $2.15 billion PagerDuty explain how it's keeping its 'love affair' with developers alive, almost six months after IPO
- Now valued at $2.15 billion on the publuc markets, PagerDuty is one of the most visible companies in the DevOps market - helping developers write more code, faster.
- At an event last week, PagerDuty said that it's been investing in technologies like machine learning and analytics, while also undergoing a marketing rebrand as it works to expand its community.
- PagerDuty senior vice president Jonathan Rende told Business Insider that one of the company's top priorities is to continue focusing on its "love affair" with developers, who love the service.
- PagerDuty's stock sank despite beating Wall Street's expectations from last quarter, but analysts are still hopeful.
- PagerDuty went public in April, in a much-watched IPO - but then saw its stock sink after after it announced heavy losses in its most recent quarter. CEO Jennifer Tejada says that she doesn't regret that the IPO happened when it did, saying it helped PagerDuty's brand.
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PagerDuty is just about six months out from its April IPO, but CEO Jennifer Tejada says that not much has changed: the company is still focusing on developers.
The $2.15 billion PagerDuty has its roots in creating products specifically for developers to help them quickly respond to IT incidents like outages. Tejada says that the company's strength is that developers like the product so much, they get the rest of their company to start using it too.
"What we've seen is, incident response has become more cross functionally important to a community," Tejada said at a media event last week. "We actually prefer our user community use PagerDuty and become champions of it inside the organization. Developers don't like to be told what to do."
Next up, PagerDuty has been investing in analytics and machine learning software to help companies understand how their services are performing in real time, with information such as the total cost of outages, amount of downtime, and what it all means. Just Tuesday, PagerDuty released a new product with this capability.
"Whether in dev and IT or other teams, they're much smarter using PagerDuty because the real-time work is made more effective," Jonathan Rende, PagerDuty's senior vice president of products and marketing, told Business Insider. "We're going to continue to build out that central nervous system. That's really where we're putting all of our investment going forward."
The IPO 'was a milestone, but it's not the end point'
When the IT company PagerDuty first went public, it was a hit with investors and soared 56%.
After reporting heavy losses in its most recent earnings report, PagerDuty's stock sank 13% - despite beating Wall Street expectations on earnings and revenue, and despite showing strong sales growth. Still, analysts believe PagerDuty is poised for a comeback.
William Blair partner Bhavan Suri wrote in a note to clients that he expects PagerDuty "to deliver a strong performance during the second half of fiscal 2020 and sustain attractive growth rates for the next few years," and customers that he spoke to are interested in using PagerDuty's new products. He expects this to translate in PagerDuty's stock as well.
Tejada herself now says she feels "really good" about PagerDuty's IPO outcome and its timing. She says that a big reason why PagerDuty went public was to build brand recognition.
"PagerDuty has long been the bastion of the tech community," Tejada said. "That's not often where investors live...For us, it was a milestone, but it's not the end point. It has opened up a lot of opportunities for us as a company in addition to enhancing our balance sheet. It creates a lot more awareness for us as a company."
To seize on those opportunities, PagerDuty has also been focused on rebranding. Rende says that the company is launching new advertising campaigns, in what's largely a first for the company - but still talking to developers to make sure its new image isn't alienating them.
"There's PagerDuty love," Rende said. "It's a real thing. If we rebrand and we don't talk about that and we don't have the right language, if we're inauthentic, developers will sniff that out so fast, it's like you've sold out. What we've really tried to do is amplify the message."
'A love affair with the users'
In the last year and a half, the company has doubled its investment in community, Rende says. PagerDuty co-founder and CTO Alex Solomon oversees community, which includes leading a team of evangelists, tasked with holding events and going to user meetups.
The company has also been publishing its best practices online so developers can look to them as an example for how to respond to incidents. Rende says that every time PagerDuty releases a new product, it makes these best practices available for free online. Since these best practices are available as open source, developers can also contribute to them.
"That's another thing we do to give back to the community and make sure we're not just a corporation that's not in touch with our users," Rende said.
Besides that, Tejada says she's been spending time meeting with customers, and has now met with about 1,000 of them. She adds that her background helps keep her from staying in the Silicon Valley bubble. Outside of her duties as PagerDuty's CEO, she serves on the board of cosmetics company Estée Lauder, where she jokes that she's the "most poorly dressed person there."
"I'm learning a lot too because I'm seeing how when you're in the software industry, you think the whole world revolves around software," Tejada said. "Silicon Valley is still to me a foreign land with foreign customers, and I'm still the purple squirrel wandering around the place."
Read more: The CEO behind the smash-hit PagerDuty IPO says that she looked at 51 other chief exec roles before she chose to lead the $3.9 billion company
At this point, PagerDuty has now been around for 10 years, but Tejada says the DevOps market, or market for software targeted at development and operations, is still "very nascent."
"The vast majority of customers I meet and see barely have their engineers on call or can barely spell DevOps," Tejada said. "It's a very, very early market. There's room for many players."
Rende says that what makes PagerDuty stand out from other competitors is its "connection to the people."
"We always say we have a love affair with the users," Rende said. "Behind all that complexity that's growing are people. We're the folks that engage those folks so they can do the work."
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