Hydrolix is a streaming data lake optimized for log-intensive use cases that offer both real-time and historical analytics at scale. Pulse 2.0 interviewed Hydrolix co-founder and CEO Marty Kagan to learn more about the company.
Marty Kagan’s Background
What is Marty Kagan’s background? Kagan said:
“I’ve been in the hardware and software business for over 25 years, specializing in enterprise software, cloud computing, content networking, and streaming media. My forte is product management and building strong teams that deliver. I worked for Cisco and Akamai for a combined 12 years, then started working in the start-up arena, co-founding Cedexis in 2008 and Hydrolix in 2018. For the past eight years, I’ve also enjoyed investing in and advising other innovative start-ups around the world.”
Formation Of Hydrolix
How did the idea for the company come together? Kagan reflected:
“Hasan Alayi and I started Hydrolix because we knew firsthand the pain that comes with exorbitant costs associated with observability.”
“After working at Akamai and Cisco, I co-founded Cedexis in 2008. It became a pioneer in observability for Content Delivery Networks (CDNs). Cedexis’s flagship product, Radar, monitored the quality of experience delivered by CDNs to their customers. In 2012, Hasan left Cisco to join the engineering team at Cedexis.”
“As Cedexis grew its customer base, Hasan and I became acutely aware of the high cost of data storage: storing the logs essential to our business would be one of our biggest expenses, second only to payroll. This disturbing cost burden weighed heavily on our minds, even after we each moved on to our next adventures—Hasan moved on to Splunk, I joined Fastly, and, ultimately, Citrix bought Cedexis in early 2018.”
“Even while at Splunk, the challenge of controlling the costs of data remained. Hasan knew the problem could be solved, and he decided to set out on his own to create what would become the world’s first streaming data lake. His first call was to me. We reunited over a shared ambition to solve this seemingly pervasive and rapidly growing problem and disrupt the economics of log data. We created the world’s first streaming data lake, Hydrolix, in 2018.”
Favorite Memory
What has been your favorite memory working for the company so far? Kagan reflected:
“In the company’s early days, we suffered through a few ‘near-death experiences,’ as many start-ups do, so a particularly sweet moment for me was achieving market breakthrough, the critical milestone when our faith in our product-market fit finally paid off. The breakthrough for Hydrolix was when our fledgling technology partnership with Akamai blossomed into a fully integrated service offering. The TrafficPeak observability platform on Akamai Connected Cloud is built atop the Hydrolix streaming data lake. After introducing TrafficPeak, the sales funnel at Hydrolix blew wide open.”
Core Products
What are the company’s core products and features? Kagan explained:
“Hydrolix is the only data lake platform transforming the economics of log data. With a unique combination of stream processing, decoupled storage, high-density compression, and indexed search, Hydrolix’s platform delivers real-time query performance at a terabyte scale while dramatically reducing the cost of storing and using log data. The platform powers data-intensive applications to elevate business intelligence, optimize operations, and drive growth. Companies worldwide deploy Hydrolix for a wide range of use cases, including security, observability, content delivery, digital advertising, AI/machine learning, and regulatory compliance.”
Company’s Mission
How would you describe your company’s mission and your unique offering to the marketplace? Kagan replied:
“Data is often the number one expense in the business after payroll. Observability can often account for 30% of the total cloud spend so there is tremendous pressure on IT to control and reduce cost on data.”
“The Hydrolix mission is to transform the economics of big data and eliminate the hard tradeoffs enterprises must make when faced with the high cost and poor performance associated with petabyte-scale data sets. Hydrolix has a solution that eliminates:
➢ Runaway cloud data costs
➢ Poor ad hoc query performance
➢ Operational complexity
➢ Over-provisioning
➢ Pressure to throw away data
➢ Short retention periods
➢ The need for cold storage
Hydrolix is designed to provide ingest, storage, and query of log data at a petabyte scale while remaining highly performant and cost-effective. As the engine for other services such as Akamai TrafficPeak, the most important goal is to continue improving core systems to handle log data from massively distributed systems with services around the globe.”
Customer Success Stories
After asking Kagan about customer success stories, he highlighted:
“As mentioned, one of our most visible customer success stories is Akamai TrafficPeak. As a valued partner of Akamai, Hydrolix helps dramatically reduce data and observability costs for Akamai customers.”
“Akamai recently licensed our technology to build their TrafficPeak observability service. TrafficPeak is a managed service that runs on the Akamai Connected Cloud. It is designed to collect, enhance, transform, enrich, store, query, and archive massive amounts of data for a fraction of the cost of other technologies.”
“In the past, it was so expensive to collect data at a scale that customers had given up; instead, they relied on high-level metrics or summary data to give a limited view of what was happening. Now, for a price that they can afford, they can ingest all of their logs and have visibility of what’s happening in a very granular way. Hydrolix enables Akamai customers to leverage all their data and not to throw data away that may give them a competitive advantage.”
“Some of the largest media companies in the world are using TrafficPeak today to gain real-time visibility of what’s happening on their platform.”
“TrafficPeak generates unprecedented data value and insights for Akamai customers, allowing them to operate safely and securely at scale. Because TrafficPeak gives you real-time visibility of all your traffic at high resolution, it allows you to do things like detect piracy or abuse. For example, Akamai had a customer in Europe that was able to mitigate a massive DDOS attack because TrafficPeak offered them visibility of what was going on before it impacted the end user. Gaming companies are using TrafficPeak to monitor massive spikes, where sometimes it may look like a DDOS attack, but it’s actually just all their end users coming in to download the latest game.”
“TrafficPeak enables Akamai customers to eliminate all the tradeoffs they have to make between retention, performance, and cost. In just nine months, TrafficPeak, powered by Hydrolix, generated eight million dollars in revenue and is achieving 400% year-over-year growth. 70% of people who try Akamai’s TrafficPeak buy it.”
Funding/Revenue
After asking Kagan about the company’s funding and revenue details, he revealed:
“Hydrolix revenues have doubled each quarter from Q3 of 2023 through Q2 of 2024. The company now has almost 200 customers from just five in summer of 2023.”
“Hydrolix closed a $35 million Series B funding round in May of 2024 after raising $20 million in Series A funding in June of 2023. Year-over-year revenue grew 100% largely because of the Powered by Hydrolix Partner Program.”
Evolution Of Hydrolix’s Technology
How has the company’s technology evolved this year? Kagan noted:
“In 2024, there have been major improvements to Hydrolix’s streaming ingest service and summary service, as well as the addition of multi-cloud capabilities. Hydrolix’s streaming ingest service has been updated to remove queuing, increase efficiency, and simplify architectural design. This is critical for Hydrolix to ingest more than 10 million log lines per second during peak traffic.”
“These changes were spurred and inspired by Hydrolix providing observability for the ‘biggest football game of the year’ to media and entertainment broadcasters, CDN providers and ISPs.”
“Hydrolix’s summary service has also been updated to v2 to use intermediary states in summary tables, allowing for powerful new aggregation capabilities. Now aggregates can be precomputed from summary tables without making additional queries to parent tables, which is critical for efficient querying and performance of log metrics at scale. Combined with Hydrolix’s ability to update summary tables to account for late-arriving and out-of-order data, Hydrolix’s summary table capabilities are unparalleled in the industry.”
“None of this efficiency matters if you can’t deliver a product at global scale through the cloud. And now, it’s not just about the cloud, but multi-cloud—the ability to use software across multiple clouds and regions. In 2024, Hydrolix launched multi-cred so that Hydrolix can be used securely in multiple cloud environments.”
Significant Milestones
Have there been any other significant milestones this year? Kagan cited:
“The collaboration with Akamai was so successful that we decided to create our partner program. In June, we launched our Powered by Hydrolix Partner Program to create new revenue streams for partners whose customers collect massive amounts of log data. By building products powered by the Hydrolix streaming data lake, partners can offer their customers hot access to four times more data at one-fourth the cost. The program delivers partners a speedy path to revenue that requires minimal in-house resources, giving them the option to have Hydrolix deploy and manage the solution for them and provide full go-to-market support. The Powered by Hydrolix Partner Program includes benefits and incentives customized for three partner categories: referral partners, resellers and co-sellers, and white-label partners. To learn more about the Powered by Hydrolix Partner Program, including how to participate, please visit https://hydrolix.io/partner-program/.”
Improving Business Processes Today
How does this technology improve customers’ business processes today? Kagan emphasized:
“Hydrolix is a streaming data lake for log-intensive use cases that dramatically reduces the cost of streaming and storing log data at scale. Hydrolix’s high-density compression reduces a storage footprint by 20-50x and scales compute and storage separately in accordance with customers’ needs. This is important as one study showed that 53% of respondents exceed their cloud storage budget.”
“Hydrolix can also help companies create new revenue streams. Hydrolix can be used to build new products and services for customers that are 75% less expensive than their current solutions. A McKinsey global survey reports that more CEOs are prioritizing the creation of new revenue streams, and business leaders are using partnerships to a great extent to build out their businesses. At Hydrolix, we have experienced the power of partnerships when it comes to building new revenue streams and launched the Powered by Hydrolix Partner Program to meet the needs of CEOs. As mentioned above, the program delivers partners a speedy path to revenue that requires minimal in-house resources.”
Improving Business Processes Over Next 5 Years
How will this technology improve people’s lives or business processes over the next five years? Kagan concluded:
“The continued digitization of businesses is contributing to rapid data creation. An Edge Delta study shows that log data volume grew 5x between 2020 and 2023, and that is not going to slow down. IDC predicts that the 33 zettabytes of unstructured data that existed in 2018 will grow to 175 zettabytes by 2025, an annual growth rate of 61 percent.”
“Teams need full access and low latency queries to all their data, whether it’s a minute or a year old. Long-term access to data is important for AI use cases, as well as understanding patterns in data such as user behavior over time and malicious attempts and pulling actionable insights from what would otherwise be dark (inaccessible) data. They must be able to perform real-time data ingestion at scale for fast incident remediation and analysis.”
“The biggest challenge is finding a high-performance and cost-effective solution that scales. This simply isn’t possible with many traditional data platforms that rely on local storage, SSDs, and other compute and storage technologies that are expensive and challenging to scale. Even many modern data platforms, especially those that rely on in-memory data storage, are struggling to manage costs. Hydrolix maximizes the benefits of cost-effective, highly scalable object storage to provide these benefits.”
