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Why Datadog bought Eppo for $220M, and what it means for the future of experimentation
Today, Datadog acquired Eppo.
This is a huge move in the experimentation category. Eppo has helped push forward modern experimentation for the last 4 years, and the acquisition makes Datadog the latest (and largest) company to enter the world of experimentation.
Before we go any further, we’d like to congratulate Eppo on their successful exit. They’ve been a strong force in the experimentation industry, and we wish their team the best as they enter the next chapter.
At a high level, this move reinforces two of fundamental beliefs about the experimentation market:
Experimentation is central to the modern development stack
Point solutions are being consolidated into a single product development platform
To understand why this acquisition happened and what it means, let’s start with a brief history of the experimentation category.
A brief history of the experimentation category
When we founded Statsig 4+ years ago, “Experimentation” didn’t exist as a standalone category.
Before companies like Statsig and Eppo, experimentation platforms only existed inside a few large tech companies. Systematic A/B testing was a common practice at companies like Facebook, Netflix, and Google. It was also a secret force behind their explosive growth in the 2010s.
Unfortunately, the tools and expertise required to build a sophisticated experimentation program were siloed within these companies. If you wanted to run fast experiments or A/B tests, you were stuck building your own platform or using tools designed for web experimentation, like Optimizely or Adobe Test & Target.
This changed 4 years ago, with the founding of Statsig and Eppo.
We founded Statsig with a mission to enable rapid A/B testing and advanced experimentation, so anyone could move faster and make better product decisions.
Eppo was also founded in 2021, with a similar vision, and since then, they’ve also worked to push the experimentation category forward.
Over the last four years, this effort has turned experimentation into a meaningful category. Companies like LaunchDarkly and Amplitude created their own offerings, and Harness bought Split to enter the market.
Datadog’s acquisition of Eppo makes them the newest entrant in the category. Given their size and reach, it’s a true endorsement that experimentation has arrived—and is here to stay.
Why Datadog bought Eppo
Datadog’s acquisition of Eppo showcases another long-term trend in this market: the move from individual point solutions to integrated platforms.
At its core, this acquisition is a way for Datadog to add experimentation to its sprawling platform.
At companies like Facebook, advanced experimentation was just one of many tools available to cross-functional product teams. The same set of data powered experimentation, product analytics, infra analytics, and dashboards—and experimentation tools relied on the same set of infrastructure as feature flags, dynamic configs, and release pipelines.
This seamless integration enabled faster development and smarter decisions. Each tool just worked. There was no need to spend time fixing integrations or chasing errors across multiple tools, so engineers could spend more time building the next great product.
With one unified set of data, teams didn’t need to argue about the source of truth for a given metric. PMs or data scientists could also extend interesting insights from experiments into meta-analysis in notebooks or exploration of long-term trends.
Our team has believed in the platform vision for years, which is why we’ve been committed to adding new products alongside bleeding-edge experimentation capabilities.
For Datadog, the Eppo acquisition is a smart way to enter the experimentation market and expand their own platform from infrastructure monitoring and observability towards product-focused data and engineering workflows.
Datadog’s platform play
Datadog has been investing in its platform play for years, but in recent years, it has accelerated its expansion.
Eppo is the third startup that Datadog has purchased this year. Experimentation will become the 57th product listed on its website, joining products like CI visibility, mobile app testing, and code security in a sprawling ecosystem of developer tools.
Experimentation makes sense as the next expansion point for Datadog. It’s a rapidly growing category that is critical to modern product development, and there’s clear overlap with products like RUM, session replay, and product analytics.
More importantly for Datadog, there is a potential fit with core infrastructure workflows. The “north star” of the observability market is causal inference—the ability to say why an application or service went down, not just when it went down. Experimentation offers a way to solve this problem, particularly when paired with a deep release management offering.
We’ve seen this shift ourselves at Statsig. More and more customers are using experiments to measure the impact of infrastructure changes, from running A/B tests on application performance to optimizing costs. And it speaks to where the experimentation industry is heading.
What this means for the future of experimentation
Datadog’s entry into the experimentation market will undoubtedly bring more people into experimentation. But it will also shift the focus of experimentation products.
Historically, experimentation has been focused on product teams. It’s been a tool to optimize sign-up flows, improve user retention, and drive long-term improvements in core product metrics.
Platforms (including us and Eppo) have focused on building sophisticated statistical analysis, implementing new test types, and expanding the suite of tools for managing a large experimentation program. These features were highly relevant for cross-functional product teams, but won’t necessarily matter for DevOps or SRE teams.
Datadog will shift the focus of experimentation towards infrastructure workflows. These workflows are characterized by huge volumes of data, very fast decision timeframes, and a deep connection to release management and deployment pipelines. These are a very different set of problems from those faced by product teams.
As Datadog moves in this direction, it will double down on integrating experimentation into its existing platform. There are other things that are likely to come with a platform like Datadog: a stronger commercial focus, changes to billing, and less focus on hands-on education and support for experimentation teams.
Closing thoughts
Again, we’d like to say congratulations to Eppo. It’s no small task to build a useful product in experimentation and establish trust among hundreds of customers.
At Statsig, we’ve always been committed to building the world’s best experimentation product—and that isn’t changing. More to come on this next week!
Finally, to Datadog, we say welcome to the world of experimentation.
Disclaimer: This is based on recent news shared by Upstart Media, Seeking Alpha, and other sources. At the time of publishing, neither Eppo nor Datadog has issued a press release on this topic.
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