Since I first heard about Splunk (probably in early 2005) I found the whole notion of using the log files as a source of actionable information to be a perfect exemplar of the 'data exhaust' principle. To see them do so well over the course of the past 6 years and top it off with this IPO makes me very happy for all involved ... kudos (particularly to Michael Baum who led the charge in the company's infancy)!
I've spoken about this for years, but have never done justice to the idea in a really thoughtful post. But, don't worry... I won't do that here. At least, not yet.
The fundamental idea is: Extract value from the operational data generated by the transactions that are (ostensibly) the primary business function. If the situation is really an exemplar of the 'data exhaust' principle, the by-product becomes more valuable than the 'primary' business.
I've enjoyed (and benefitted from) a few businesses that executed on this model. Instill (acquired in 2008 by iTradeNetwork) was one of the first SaaS companies on the planet, offering order entry and order management to the biggest buyers of food -- the big restaurants, chains and institutional food operations (e.g. schools, hospitals). They were so prevalent in the institutional food business that they became the trusted source of market data and a means of verifying whether pricing triggers built into national sales contracts had been reached. (Hey... if you're Olive Garden, buying 43 gazillion metric tons of grated parmesan a year, you want to know when you've hit the 40 gazillion tier, and are saving a buck on every ton!)
But, back to Splunk. They've paved the way for an incredibly valuable set of companies which now use many of the same principles for different aspects of event analysis, capacity planning, configuration, accounting and security in both conventional data centers and infrastructure services (aka IaaS cloud). They've definitely delivered value to their customers and their investors. So, ... good on you, Splunk.
The widely anticipated Splunk IPO has not disappointed, with shares up nearly 90 percent from their opening price at one point Thursday. This initial excitement is hardly surprising given the interest in big data in general, and Splunk in particular. The term ?big data? refers to massive amounts of structured, unstructured and semi-structured data that is generated not only by standard-issue computers but sensors and all manner of devices and machinery not to mention social networks. This is information that?many companies want to winnow for useful insights. Splunk?s technology searches, analyses and visualizes that data. Customers include Bank of America, Comcast, Salesforce.com and Zynga.