AIM Exclusive: This 2-Year-Old Startup is Drawing Customers Away from Datadog &amp; New Relic
Cloud observability tools prove to be indispensable for cloud-native companies, offering crucial insights into system performance, resource utilisation, application behaviour and even optimising AI stack efficiency. Observability companies such as New Relic and Datadog dominate the global market, with New Relic claiming to have over 12,000 customers in India. However, Middleware, a startup with origins in Ahmedabad, is fast emerging as a challenger. The startup focuses on midsize tech companies with an employee count of 50-500. In fact, its founder and chief executive officer, Laduram Vishnoi, told AIM that many companies that were previously Datadog and New Relic customers are now migrating to its platform. While Vishnoi did not disclose the exact number of customers that have migrated from what the startup considers its major competitors, he indicated that the number is significant, reaching high double digits. Datadog Agent Support Companies may opt for Middleware over other solutions, but the migration process remains complex. To help companies with the migration process, Middleware has developed what they call the ‘Datadog agent’. This allows developers to send logs, metrics and traces from Datadog agents directly to Middleware. “So, if a customer has been using the Datadog agent for the past 5-6 years, they’ve likely done a lot of instrumentation and customization with Datadog. Now, if they want to switch to a new provider, they can simply add a few lines of code to the agent. “Once done, data starts flowing to the new provider. This transition takes just a few minutes, making the switch much simpler and faster,” Vishnoi said. US-based email service provider Puresend is one of the companies that have migrated from Datadog to Middleware. In fact, around 60% of its customers come from competing observability players. One of the primary reasons companies are choosing Middleware is cost. According to Vishoi, Middleware offers its services at one-third of the cost compared to major competitors like Datadog, making it an attractive option for cost-conscious customers. Oftentimes, for small or midsize companies, Datadog and New Relic’s services could prove to be a costly affair. The startup, which is based in San Francisco and has a branch in Ahmedabad, is currently focussed on two markets, the US and India. While Datadog has a big presence in the US market, New Relic is used by many startups in India. When we asked Vishnoi if we could see a similar agent for New Relic, he said, “We are thinking about it.” ( Credit: Middleware) New UI/UX The startup, backed by YC, will also announce a new iteration of its full-stack cloud observability platform with over 300 refreshed screens, 100 customisable dashboards, new alerts on custom metrics, and a unified date picker. The latest version will also offer a complete UI overhaul, new capabilities for monitoring and performance insights, and broader integration support. Middleware is set to introduce auto-instrumentation support for Python, Node.js, Java, .NET, and Golang applications using the OpenTelemetry operator. This feature enables distributed tracing without requiring any code modifications, streamlining the instrumentation process significantly. Additionally, Middleware’s Real User Monitoring (RUM) will monitor core web vitals (FCP, LCP, FID, CLS) and extend its capabilities to native iOS and Android applications. This enhancement will provide valuable insights into performance metrics and user interactions across mobile platforms. Furthermore, Middleware will integrate with AWS to gather logs, metrics, and events from ECS, EC2, S3, RDS, Firehose, Lambda, and EBS, simplifying AWS monitoring with streamlined configurations. It also supports log ingestion from Elastic Logstash, offering an alternative to Elastic Search and Open Search. “Over the past one-and-a-half to two years, we have been continuously refining our solutions. Initially, we adopted a scrappy approach, assembling components quickly based on customer feedback. Through this process, we gained valuable insights into user preferences and pain points. “Now, we are at a stage where we are completely overhauling our solutions to meet the needs of customers better,” Vishnoi said. Integrating Generative AI Datadog and New Relic both have integrated generative AI solutions into their platform. Earlier this year, New Relic announced the general availability of New Relic AI monitoring with a suite of powerful new features to meet the evolving needs of organisations developing AI applications. Datadog, too, introduced Bits AI, a generative AI-powered DevOps copilot that helps investigate and respond to incidents more efficiently across Datadog’s web app, mobile app, and Slack. Vishnoi revealed that even Middleware is working on similar things, however, given this is a new startup, they are slightly behind its two biggest competitors when it comes to generative AI integration. “I personally feel a generative AI chatbot is not that helpful. We did launch a chatbot last year, but the adoption rate remained very low,” he revealed. Nonetheless, the startup is working on AI monitoring features, which it plans to implement in the coming months. “We are working on different solutions like model monitoring, GPU monitoring, and vector database monitoring. We are currently focused on improving our approach to root cause analysis, addressing issues promptly and proactively anticipating them in the future. “This involves leveraging generative AI to enhance our capabilities in understanding when and how issues arise and ensuring we are prepared to handle them effectively going forward,” Vishnoi said. ( Credit: Middleware) Why Ahmedabad? To date, the startup has secured $6.5 million in seed funding led by 8VC. Other participants include Fin Capital, Vercel CEO Guillermo Rauch, Tokyo Black, and a group of notable angel investors and funds such as Decent Capital, Begin Capital, Beat Venture, and Gokul Rajaram. Interestingly, the startup chose to have a branch in Ahmedabad, ahead of Tier 1 cities. According to Vishnoi, he prefers a Tier 2 city compared to a Tier 1 city like Bangalore or Chennai, even though that’s where most of their customers could be. “I don’t want to choose a Tier 1 city for tech in India due to high turnover rates among employees. In cities like Chennai, there is a lot of turnaround for the people and I think that is not good, also it’s become really expensive,” he added. Moreover, Sawaram Suthar, the founding director at Middleware, told AIM that Ahmedabad is emerging as a great option for tech companies, as many like IBM, Capgemini and Infosys are setting up offices in Gujarat. According to Suthar, the startup is also facing no issues when it comes to hiring tech talent in Ahmedabad. “In recent years, many individuals have shown a desire to relocate from large cities to smaller ones, often their hometowns, but were compelled to live in tier-one cities due to job opportunities. “Now, with everything available locally, companies like Infosys are establishing offices in tier-two and tier-three cities. We have benefited from this shift.”
The startup claims around 60% of its customers have migrated from other observability platforms
Middleware offers its services at one-third of the cost compared to major competitors like Datadog, making it an attractive option for cost-conscious customers.
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