Freshworks is launching new incident response management software that will take the company more into the IT operations management market as it aims to expand its total addressable market and poke larger rivals in the eye.
The expanded features for Freshservice, the IT operations management suite. rolled out at the company's Refresh conference. Freshservice will now offer AI-enhanced alerting to anticipate service issues before they escalate.
At its core, Freshworks has spun an initial public offering out of taking on giants. Freshworks operates in customer experience vs. Zendesk, CRM vs. Salesforce and IT service management vs ServiceNow. Now IT operations management will put it against BMC, IBM and Microfocus.
Freshworks' secret sauce is that it targets small businesses as well as mid-sized enterprises. That market has historically been ignored by giants. In other words, Freshworks can poke the giants a bit because they're too busy chasing large enterprises.
Girish Mathrubootham, CEO of Freshworks, outlined the company's strategy on its first quarter earnings conference call Nov. 2.
Our product-led growth strategy continues to be the biggest driver of new business for us. This is augmented by an outbound sales team and a partner network to serve our customers from SMB to larger enterprises. We define our SMB market as companies with up to 250 employees. Anything greater, we define as mid-market and enterprise. Freshworks continues to grow and attract larger customers. And today, we have a majority of our business coming from mid-market and above.
Freshworks has also been adding fast-growing technology companies such as ForgeRock and Lucidworks. Freshworks reported third quarter revenue of $96.6 million, up 46% from a year ago, with a net loss of $140.3 million. On a non-GAAP basis, Freshworks reported a third quarter loss of $1.5 million. Freshworks said fourth quarter sales will be between $99 million to $101 million with 2021 revenue between $364.5 million to $366.5 million.
The company has been able to expand into new markets courtesy of its Neo platform, which is built to enable customers to add integrated modules easily. Mathrubootham said Neo allows Freshworks to provide a unified product experience with features like single-sign-on and integrated customer views as well as a marketplace for partners and developers to connect apps. Freshworks developers also use Neo to offer services across product lines.
Freshservice's enhanced features will be available in November and include the following:
On-call Management to help IT teams quickly respond to incidents and coordinate with IT, operations and development teams.
Automated Alert Grouping with machine learning to prioritize incidents based on business impact.
Integration with Freskdesk to couple customer support agents and internal IT teams.
Freshworks said more than 10,000 companies are using Freshservice to manage IT operations.
What's next? You can expect Freshworks continue to expand into new areas. While Freshservice appears to have graduated to ride shotgun with Freshworks three main product categories, the company has other products incubating.
Mathrubootham said Freshteam, an HR management system, is being developed. Other products such as Freshping and Freshrelease are freemium but provide leads to upsell to core services.