Tuesday, July 12, 2016

Breaking Down Engineering Investment at Innovative Companies

I’m always looking for good ways to understand how companies invest money internally. When I was a Gartner analyst, I would keep an eye on data from Glassdoor and LinkedIn regularly to try to gauge the trends. I would use them in my understanding of companies versus what I was being told by the companies and end-users themselves. I always did this by checking content on the sites regularly and recording it into build patterns and trends.

Thankfully, LinkedIn has come to the rescue by releasing the Premium Insights feature on company pages. I’ve been looking at this data, and I’m finding some interesting trends regarding what it uncovers. I’m also going to compare the LinkedIn data with the Gartner data which shows market share and revenue.  

I’m going to have a look at the larger companies in ITOM to compare those which are investing for the future of their customers and those who seem to prioritize other functions. I’m going to look at Support and Engineering percentages and revenue based on the Gartner market data.

Company
Employee Growth (2 yr)
Employee Tenure (2 yr)
Engineering (%)
Sales
Revenue change (3yr) - Software
Source
LinkedIn
LinkedIn
LinkedIn
LinkedIn
Gartner
AppDynamics
114%
1.7
32%
28%
531%
AppNeta
48%
2.6
22%
32%
162%
BMC
-5%
7.2
10%
17%
-2%
CA Techn
-13%
6.5
30%
16^
-10%
Dynatrace
37%
3.1
21%
23%
N/A
HP
-1%
7.9
14%
9%
-22%
IBM
-3%
8.1
16%
8%
-9%
Idera
18%
3,1
9%
49%
N/A
New Relic
90%
1.7
27%
29%
188%
Microsoft
-4%
6.1
25%
13%
3%
Google
20%
3.8
32%
12%
26%
Solarwinds
11%
3.1
15%
24%
52%
ServiceNow
67%
2.2
16%
20%
142%
Splunk
81%
2.2
25%
29%
116%
VMware
3%
3.8
32%
15%
27%

The reason I decided to analyze the turnover, is because happy employees shouldn’t be leaving. Then again, if you are in hyper growth mode, the turnover will likely be much higher. The other key number is the investment in engineering. If you are an end-user, it’s critical your vendor is investing in engineering. It seems the sweet spot for engineering is in the mid-twenties, but if you have a large portfolio of products, this could also potentially skew how much innovation is going on.

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