Dynatrace (DT) 2024 RBC Capital Markets Global Technology, Internet, Media and Telecommunications Conference summary

Macroeconomic and business environment

• First half of the fiscal year showed strong performance with no disruption from go-to-market changes.

• Macroeconomic conditions remain choppy but stable, with expectations of continued unevenness in the second half.

• Demand environment is solid, with spending in the sector being prioritized.

Dynatrace Platform Subscription (DPS) adoption and impact

• DPS now accounts for just under 50% of ARR and nearly 30% of customers after 18 months.

• DPS customers consume at twice the rate and use twice the capabilities compared to SKU-based customers.

• DPS model offers frictionless sales, easier expansion, and higher NRR, with most customers preferring it over traditional SKUs.

• Government customers are restricted from using DPS, and the model is not incentivized for the sales force but is now widely adopted.

• Early expansion is common when customers exceed commitments, with on-demand consumption available at the same unit price.

Go-to-market strategy and sales model changes

• Reallocation of resources to focus on top 500 enterprise customers, reducing accounts per rep for deeper penetration.

• Over 30% of accounts moved to new reps, with careful management to avoid disruption.

• Productivity benefits from these changes are expected to materialize late in the second half or in fiscal 2026.

• Partner economic model and sales plays have been updated to target observability, tool consolidation, and cloud modernization.

• Sales compensation shifted to two six-month plans, improving seasonality and allowing mid-year tweaks.