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How Hydrolix Scaled A Cloud Data Platform To 600+ Clients: QA with Franz Knupfer

How Hydrolix Scaled A Cloud Data Platform To 600+ Clients: QA with Franz Knupfer

Roberto Popolizio Written by:
What does it take to build an online company that not only survives but thrives in today’s competitive marketplace? In this interview series by Website Planet, executives from successful digital companies reveal how they identified and solved the most urgent problems in their fields, the secrets that help them stand out even in the most competitive markets, and how they’re positioning themselves for the future.

Franz Knupfer is the Director of Content at Hydrolix, a company specializing in cloud-based streaming data warehousing solutions with more than 600 direct and indirect customers, and $55 million raised in Series A and Series B funding combined. Before joining Hydrolix, he held various positions at New Relic, Epicodus, and Marketo.

Why is now the time for your company to exist? What are the most pressing pain points you solve, and what makes them more urgent now than ever?

The volume of log data keeps increasing for most businesses, which is leading to high costs. In fact, data is often the number one expense for businesses after payroll. IT teams are under tremendous pressure to control and reduce data costs, leaving them forced to choose between their data and their bottom line, and too often that means throwing valuable data away. That equals lost insights, less business intelligence, and missed opportunities for observability and other use cases where that data could be valuable.

Hydrolix is designed to help enterprises manage large volumes of log data cost-effectively so they can use it for real-time and historical analytics.

At the same time, companies are being told that data is the new oil and that they need to keep all the data they can. Companies know they will have more data next year than this year, yet they are uncertain about how to store and use that data effectively without blowing up their budgets. 90% of organizations expect their cloud storage budget to increase in 2024.

This conundrum forces companies to discard or sample data, which leads to an incomplete view of what’s happening inside their applications and networks. The result can lead to flawed customer experiences, security incidents, and inefficient operations. If customers can’t find performance issues, they can’t preemptively fix them.

Our platform powers data-intensive applications to elevate business intelligence, optimize operations and drive growth. Companies worldwide deploy Hydrolix for a wide range of use cases, including security, observability, content delivery, digital advertising, AI/machine learning, and regulatory compliance. Founded in 2018, Hydrolix is trusted by Fortune 500 companies across diverse industries.

What unique features and capabilities help you solve them in a better way than other solutions? Can you share metrics and examples that show the difference you’re making?

In 2024, over half of respondents to the Wasabi Global Cloud Storage Index exceeded their budgeted spend on cloud storage, mostly due to using more storage than expected.

Hydrolix dramatically reduces the cost of streaming and storing log data at scale. Our high-density compression reduces a storage footprint by 20-50x and scales compute and storage separately, in accordance with customers’ needs. Thanks to these architectural features, Hydrolix can be used to build new products and services for customers that are 75% less expensive than their current solutions.

As an example, Akamai partnered with Hydrolix to use our streaming data lake software as the engine for its managed observability service, TrafficPeak. In just nine months, TrafficPeak, powered by Hydrolix, generated eight million dollars in revenue and is achieving 100% year over year growth. 70% of people who try Akamai’s TrafficPeak buy it. This success reveals a very promising future for the Powered by Hydrolix Partner Program.

What are your numbers right now in terms of revenue, customers, and team?

Hydrolix revenue has doubled each quarter from Q3 of 2023 through Q2 of 2024. The company now has almost 200 customers from just five in summer of 2023.

We also closed a $35 million Series B funding round in May of 2024 after having raised $20 million in Series A funding in June of 2023. Year-over-year revenue grew 100% largely because of the Powered by Hydrolix Partner Program.

Note: At the time of writing this interview, Hydrolix has more than 600 direct and indirect customers, supported by a global team of more than 100 people.

What are the biggest challenges your company has overcome since its founding? If you had to start over, what would you do differently?

In the company’s early days, we suffered through a few ‘near-death experiences,’ as many start-ups do. We learned through those trying experiences that focusing on the 2-3 most critical deliverables and not becoming distracted by the ever-increasing landscape of opportunities is super important. Startups simply don’t have the luxury of pursuing pet projects or chasing every new idea that arises from innovation through engineering, tangential opportunities in sales, and shifts in industry dynamics. We’ve remained focused on our core technology and have partnered for many of the other necessary pieces, and today we’re in a strong position to grow and scale.

What is the most powerful and easy-to-apply tactic that helped you quickly increase revenue and traffic? What metrics did it move and by how much?

The breakthrough for Hydrolix was when our fledgling technology partnership with Akamai blossomed into a fully integrated service offering. The TrafficPeak observability platform on Akamai Connected Cloud is built atop the Hydrolix streaming data lake. After introducing TrafficPeak, the sales funnel at Hydrolix increased exponentially.

TrafficPeak enables Akamai customers to eliminate all the tradeoffs they have to make between retention, performance, and cost. In just nine months, TrafficPeak, powered by Hydrolix, generated eight million dollars in revenue and is achieving 400% year-over-year growth (and 70% of people who try Akamai’s TrafficPeak actually buy it).

What emerging trends and technologies will impact your industry the most in the next few years, and how do you suggest getting ready for these changes?

There’s uncertainty around artificial intelligence and machine learning. 49% of organizations say AI/ML workload adoption will create new challenges storing data across a wider range of locations. And many companies are still figuring out how to use AI to their advantage, which includes finding affordable ways to feed data into their AI models. One study showed that less than 40% of organizations have successfully deployed an AI project.

In the development of AI/ML-enabled products, companies are in need of affordable ways to feed data into their AI models, and having all data in hot storage is important for efficiency, speed, and optimization of technical resources. With Hydrolix, massive data sets can stream and be queried as they arrive to build ML models for anomaly detection, recommender engines, and advanced platforms. Training models in real-time avoids expensive, long-running queries.

How can our readers connect with you?

LinkedIn: https://www.linkedin.com/company/hydrolix/

X: https://x.com/GetHydrolix

Data sources:
https://wasabi.com/wasabi-2024-cloud-storage-index-report/
https://foundryco.com/news/foundrys-inaugural-ai-priorities-study-examines-utilization-of-artificial-intelligence-in-organizations/

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