In July of last year, we launched the New Relic unified platform for observing your entire technology stack—applications, infrastructure, web, mobile, network, and more. Instead of pricing each capability as a separate SKU like every other option on the market, we took a different approach. New Relic is available with the industry's first usage-based pricing model.
It was a bold and risky move. But it made sense because we repeatedly heard from you, our customers, that the new model better aligns with your success. Simply put, you only pay for what you use. No more shelfware as with other subscriptions. No more overage penalties.
One year later, existing customers have migrated to the usage-based pricing model and thousands of new customers have made the shift to New Relic. It’s because usage-based pricing is superior to other options on the market because it gives you more value for your money. As an example, New Relic pricing struck a chord for Chegg. “Now we don’t have to sample our data and worry that we are missing something or that we are going to get a huge bill at the end of the month. The more data we send to New Relic, the more insights we get—it’s the perfect win-win relationship with New Relic as a true vendor partner delivering value to Chegg with every gigabyte,” said Steve Evans, Vice President of Engineering Services at Chegg, Inc.
Our usage-based pricing similarly resonated with the ZenHub engineering team. “New Relic usage-based pricing has been massively beneficial to ZenHub because it has saved us a lot of cost while giving our engineers access to all of our telemetry data,” said Ev Haus, Head of Technology at ZenHub. “The value we get for the price with New Relic is unquestionable.”
Fixing broken legacy pricing models
The move to usage-based pricing started with the insight that the pricing model for observability tooling was broken across the industry.
Engineering teams were forced to pull back on their instrumentation coverage and the amount of telemetry being collected because of expensive licenses and misaligned pricing meters.
To make matters worse, teams were forced to predict upfront what they’d use over the course of a one, two, or multi-year contract. This guessing game of fitting to the constraints of a subscription-based pricing model often leads to one of two negative consequences for users: use too little and you end up wasting your budget, or use too much and you end up with penalties.
Usage-based pricing solved those issues by collapsing the bundle of 10+ SKUs and dozens of pricing meters down to two main value drivers—the data you collect in New Relic and the users (engineers) who get value from our full-stack analysis tools. This shifted the value dynamic for observability to data and users—you only pay for what you use—as follows:
- US$0.30 per GB for all your metrics, events, logs, and traces means that engineers can collect all telemetry in one secure cloud with generous retention, querying, and dashboards. Competitor pricing can be several multiples higher than this data (as outlined below).
- One predictable price per user for all the tools required to analyze your entire stack in one connected platform experience, including application servers, cloud and on-prem infrastructure, web and mobile experiences, the network in between, and much more.
With New Relic, every new customer automatically starts with a free forever plan, no credit card required. You get 100 GB per month (that translates to as much as 10 hosts) of free data, unlimited free basic users who can query and alert on the data, and one free full user who can use all features.
If you end up needing to ingest more data or give full platform access to more team members, you can add a credit card and pay just for what you use beyond the free tier. With our Standard edition, there are no commitments and you can cancel at any time. As your usage increases, you can opt-in to volume discounts by committing to an annual pool of funds, which includes monthly roll-overs to accommodate for seasonal spikes in usage. If your usage exceeds your committed amount, you’re only billed for the excess at the low US$0.30 per GB rate with no penalties. You can empower every engineer at every stage of the software lifecycle with all of your data to plan, build, deploy, and run great software.
No more data sampling or visibility compromises
The low price of US$0.30 per GB from New Relic means that you no longer have to sample data, count agents, create custom metrics, worry about surprise or hidden fees, or make infrastructure decisions based on pricing. Now you can get a complete view of all of your tech stack in one place.
According to Jason Bloomberg, President of industry analyst firm Intellyx, “New Relic is changing the economics of observability by empowering companies to leverage all available telemetry at a dramatically lower cost than before.”
To help you unpack the fine print and compare other options on the market, the following table provides a translation of other vendors’ pricing into GB using log management as an example.
|New Relic||AWS CloudWatch2||Datadog3|
|Ingest cost||New Relic$90.00||AWS CloudWatch2$150.00||Datadog3$30.00|
|30-day retention cost||New Relic$0.00||AWS CloudWatch2$9.00||Datadog3$337.50|
|Querying and dashboards cost||New Relic$0.00||AWS CloudWatch2$1.50||Datadog3$0.00|
|Total cost||New Relic$90.00||AWS CloudWatch2$160.50||Datadog3$367.50|
|Total cost/GB||New Relic$0.30||AWS CloudWatch2$0.54||Datadog3$1.23|
|New Relic||AWS CloudWatch2~2X more value with New Relic||Datadog3~4X more value with New Relic|
1 All dollar amounts are in USD. Please refer to the linked spreadsheet for details and assumptions regarding these calculations. The New Relic data ingest cost (standard retention) was updated on May 8, 2022, based on ingest pricing updates.
2 Based on published price points assuming “Paid tier” and “US East (Ohio)” at https://aws.amazon.com/cloudwatch/pricing/ as of September 7, 2021.
3 Based on published price points at https://www.datadoghq.com/pricing/?product=log-management#log-management as of September 7, 2021. The 30-day retention cost calculation includes an assumption that there are approximately 450,000 log events per GB ingest of log data.
Up to 3X more value for your money
As a recap, New Relic usage-based pricing is comprised of two main components:
- One secure cloud for all your telemetry data at US$0.30 per GB, which includes unlimited free basic users to query, create, and view dashboards, as well as set up alerts on that data.
- Curated full-stack analysis tools brought together in one cohesive experience for a per-user fee. These tools include capabilities like errors, logs in context, anomalies, and more that help your teams resolve issues faster.
The following table provides a hypothetical example of how the per-GB price and per-user fees can factor in your total observability bill for New Relic and how that can compare to Datadog for infrastructure monitoring.
|Host cost||New RelicN/A||Datadog2$230,000|
|Data ingest cost3||New Relic$39,000||Datadog2N/A|
|User cost||New Relic$34,900||Datadog2N/A|
|Total cost||New Relic$73,900||Datadog2$230,000|
|New Relic||Datadog2~3X more value with New Relic|
1 All dollar amounts are in USD. Please refer to the linked spreadsheet for details and assumptions regarding these calculations.
2 Based on published price points at https://www.datadoghq.com/pricing/?product=infrastructure#infrastructure as of September 7, 2021.
3 Calculation includes an assumption of 13 GB of monthly ingest per host. The New Relic data ingest cost (standard retention) was updated on May 8, 2022, based on ingest pricing updates.
The value you get increases over time
Every new New Relic feature, enhancement, integration, and partnership adds to the value you receive because these innovations are baked into the platform pricing instead of an extra cost like many others in the industry.
For example, just in 2021, engineers using New Relic have benefited from new innovations, capabilities, and features at no additional cost including:
- New Relic Explorer
- New Relic Navigator
- New Relic Lookout
- Errors inbox
- Applied intelligence
- Custom dashboard visualizations
- Pixie for instant Kubernetes observability
- Network performance monitoring
- The industry’s first HIPAA-compliant observability solution for all telemetry data
These New Relic platform innovations, features, and capabilities are delivered to you and your engineers within the same per-user price, available instantly without the red tape of contract (re)negotiations. In contrast, other vendors usually add a new SKU for new features and capabilities and then try to upsell their customers into a new contract.
It comes back to motivation. When your vendor partner’s success is aligned to your success, as with a usage-based pricing model, the vendor is rewarded for these innovations as customers achieve more value and use them more. Renegotiating subscription-based contracts and upselling customers for additional subscriptions is an antiquated model of a past era that puts the vendor’s financial metrics ahead of your needs and value.
Simply put, you get far more bang for your buck for each of your users with a usage-based pricing model.
The views expressed on this blog are those of the author and do not necessarily reflect the views of New Relic. Any solutions offered by the author are environment-specific and not part of the commercial solutions or support offered by New Relic. Please join us exclusively at the Explorers Hub (discuss.newrelic.com) for questions and support related to this blog post. This blog may contain links to content on third-party sites. By providing such links, New Relic does not adopt, guarantee, approve or endorse the information, views or products available on such sites.
This blog post contains “forward-looking” statements, as that term is defined under the federal securities laws, including but not limited to statements regarding the anticipated benefits and value propositions of the New Relic usage-based pricing model and the expectation of an increase in this value over time and as new innovations are added to the platform. The achievement or success of the matters covered by such forward-looking statements are based on New Relic current assumptions, expectations, and beliefs and are subject to substantial risks, uncertainties, assumptions, and changes in circumstances that may cause New Relic actual results, performance, or achievements to differ materially from those expressed or implied in any forward-looking statement. Further information on factors that could affect New Relic financial and other results and the forward-looking statements in this post is included in the filings New Relic makes with the SEC from time to time, including in the New Relic most recent Form 10-Q, particularly under the captions “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Copies of these documents may be obtained by visiting the New Relic Investor Relations website at http://ir.newrelic.com or the SEC website at www.sec.gov. New Relic assumes no obligation and does not intend to update these forward-looking statements, except as required by law.
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