Abi Noda

Engineering Analytics Tools: All Hype, No Heart

I previously wrote about my negative views toward engineering analytics tools, based on my experiences building them. Over the past few months, prominent figures such as Will Larson, Gergely Orosz, and Erica Brescia have also voiced skepticism.

Investors, however, haven’t seemed to notice: VC’s poured over $200M of capital into engineering analytics companies in 2022 alone. To get a clearer picture of the market, I compiled a list of engineering analytics companies along with their fundraising totals and estimated revenue.

My analysis of these companies shows that, as expected, they are not living up to the hype:

  • Despite nearly $500M of venture capital funding since 2019, few companies have eclipsed $10M ARR and growth across the entire sector has averaged less than 20% YoY.
  • These companies derive metrics primarily from Git and Jira, while misleadingly marketing them as DORA and SPACE metrics.
  • Conversations with founders and customers of these companies indicate poor renewal rates due to low customer adoption and value, contrary to their marketing claims.

Leaders are increasingly turning away from engineering analytics tools in favor of other approaches that help them understand and improve developer productivity. DX is one such solution, which is designed by leading researchers and measures internal developer experience. Contact me to learn about how companies like Dropbox and LinkedIn are utilizing this approach.