The archive · Business Models · Strategic decision · 2020
New Relic open-sources every agent and keeps New Relic One as the paid product
In July 2020 New Relic open-sourced its agents and backed OpenTelemetry, betting differentiation lives in its paid New Relic One platform.
New Relic
What it had to solve
By 2020 New Relic's proprietary, per-instance-priced instrumentation was losing ground to an open-source 'sea change' in monitoring: agents were becoming a commodity, and in a Kubernetes world proprietary agents looked like a reason to buy elsewhere. Executives described the move as adjusting to that shift rather than defending the old model.
How it works
On 29 July 2020 New Relic changed much of its proprietary business model. In what executives described as adjusting to a 'sea change' in open source adoption, the company began publishing its agents and instrumentation integrations on GitHub: the C, Go, .NET, Node, Python and Ruby agents at launch, with Java scheduled for September and PHP for October. SDKs, command-line tools and the 'custom visualizations' in its catalog were included in the open-source push.
Chief product officer Bill Staples — previously instrumental in Microsoft's open-source embrace — framed the move as total: 'These agents are all in the open... We're taking contributions from the community and we're publishing our roadmap. We're 100% committed to the open source philosophy.' The licenses let another organization use the agent libraries in its own applications, and the telemetry they emit 'can be pointed at any number of open source backends or commercial backends', including New Relic's own.
The strategic logic, as analysts read it, was that differentiation in observability had moved off the agent. In cloud-native, scale-out environments 'proprietary instrumentation for proprietary application stacks is becoming less viable', said Torsten Volk; agents were becoming a commodity, so New Relic should open-source them and compete on the scalability and analytics of its backend. Analyst Clive Longbottom called it a way to 'create customer stickiness': community-built modules and integrations extend New Relic's reach at little risk to the company itself.
To make the bet credible, New Relic also contributed code and financial resources to the Cloud Native Computing Foundation's OpenTelemetry standard and supported Prometheus, Grafana and related telemetry projects. Volk called the move 'radical', argued radicalism was needed for credibility, and warned — citing Docker's decline — that the market punishes vendors that hold proprietary solutions too long. The story drew a 157-point, 39-comment Hacker News thread on 2020-08-03.
Why it lands
- Agents run inside the customer's own application, so they were the part buyers had to trust: open-sourcing them removed the black-box objection that pushed teams to open or source-available rivals.
- When instrumentation standardizes, value migrates to the aggregation platform: New Relic gave away the commodity layer and kept its 'secret sauce' — the backend that turns telemetry into answers.
- Backing OpenTelemetry and Prometheus made New Relic a co-owner of the emerging standard rather than a proprietary holdout, rebuilding credibility with cloud-native buyers it had priced out.
- Open agents double as distribution and a moat: community integrations extend New Relic's reach at little cost, making it harder to justify adding alternatives.
- The move was framed as a deliberate gamble on timing — analysts argued that being 'all in' early was the only credible posture once open source had won the commodity layer.
What it did
Developers got agents they could inspect, fork and point at any open or commercial backend, and analysts said the move created customer stickiness and made New Relic a relevant cloud-native player instead of 'the guys whose software is too expensive for Kubernetes'. The announcement drew a 157-point, 39-comment Hacker News thread on 2020-08-03.
What you can take
When a layer becomes a commodity, open-source the part customers touch and differentiate on the part that aggregates it: the agent earns trust and distribution, the platform earns the money.
Since then
New Relic followed its schedule, open-sourcing the Java agent in September and PHP in October 2020, keeping New Relic One — with usage-based pricing and a generous free tier — as the paid product around which the open agents orbit. Hacker News reaction on 2020-08-03 split between readers who found the move overdue and those who argued the agents were never the valuable part; the server-side platform was what people paid for. Analysts' verdict stood as a conditional bet: clever and credibility-restoring, provided New Relic could monetize the customers the open code brought in.
Sources
- New Relic Changes Business Model, Open Sources Agents and Instrumentation
- New Relic changes business model, open sources agents and instrumentation (Hacker News discussion)
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