Software Maker Graylog Raises $2.5M, Moves to Houston from Germany

Graylog, a maker of open-source data analytics software, announced it has raised $2.5 million and will move to Houston.

The company, which began as an open-source project in Hamburg, Germany, will use the funds for marketing and to further develop its software. The financing round was led by the Houston-based Mercury Fund, with participation from Crosslink Capital in San Francisco, Draper Associates in Menlo Park, CA, and High-Tech Gründerfonds in Germany.

Essentially, Graylog’s eponymous software enables companies to search through and find specific log messages—internal communiqués that alert administrators that a server has crashed, an e-mail wasn’t delivered, or which devices are connected. Data centers in a typical Fortune 5000 company will shoot off millions of these sorts of messages per second, says Michael Sklar, Graylog’s CEO.

“It’s like the black box on an airplane,” he says. “This tracks everything that happens in the system.”

Sklar says Graylog will compete directly with Splunk (NASDAQ: SPLK), a San Francisco-based company that also focuses on machine data, by making such analytics more affordable. Graylog’s open-sourced software is free but customers will be charged for consulting that Graylog will provide in conjunction with the software.

“They may need to call us once a month or quarterly with questions about scaling issues and there are nominal annual fees,” Sklar says. “In the long-term, we will build some additional commercial functionality into [the software] but the core will continue to be free.”

Aziz Gilani, a director at the Mercury Fund and an Xconomist, says Graylog’s open-source approach encourages experimentation and the development of novel uses. Once a customer “wants to move these experiments to production, they will probably want to purchase support from us as well as a few bolt-ons that make management easier,” he says. “Mercury Fund is excited about making big data analytics accessible to IT departments without restrictive license agreements just to turn a system on.”


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