Startups Seize Automation Market - Page 2

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What run-book leaders are saying

IConclude's Gupta said customers appreciate having products such as BMC's Remedy service desk management software, but bemoan the fact that, even with Remedy, a lot of processes must still be manually addressed.

Some financial institutions may have 500,000 to 1 million alerts or incidents flooding their management consoles per day. This sort of triage diagnostics requires manual remediation, which Gupta said is extremely expensive and time consuming.

"This still presents a big problem because with so many coming in you can have a critical alert and miss it, resulting in serious downtime impact on the business," Gupta said. "Our customers said, 'Boy if that process could be automated it would have huge value which we would pay money for.'"

Microsoft and Alaskan Airlines are two of about 50 iConclude customers it sells some of its 1,000 or so OpsForce run-book automation process templates to. iConclude is bent on adding several more.

"The signs of the market developing are incredible because every time you sit down with a customer and ask them about manual procedures, the ROI [return-on-investment] is pretty clear," Gupta said.

Speaking of customers, RealOps skipper McDermott outlined a specific customer scenario involving a large, West Coast-based Internet company that he wouldn't name.

The company had thousands of servers inundated with alarms, all with different requirements for how to handle them, from disk-utilization instructions to logging issues. The company kept a large staff to triage the alarms and diagnose them.

RealOps brought its AMP software in and applied pre-built applications to automate 20 percent of the company's alarm stream within four days.

"It's a huge efficiency grabber. What it allowed them to do was be able to step out of firefighting mode and start looking at innovative ways to do more for the company," McDermott said.

Consolidation is the consensus

With all the talk about how important run-book automation is in the management software spectrum, some might wonder what the "Big Four" management software vendors -- IBM, HP, CA and BMC -- are doing in this space.

The CEOs said the Big Four are actively "educating" themselves about the space. Being coy and cagey is the name of their game; they won't specify how the giants are taking their schooling.

Gartner's Williams recognizes some inherent challenges for the Big Four in run-book automation, including the stubborn unwillingness to stop putting their proprietary technologies first and adopt a "process-centric" approach that will demand they support and fully integrate with IT management tools outside their portfolios.

This requires them to be technology agnostic. But there's a small problem: IBM , HP , CA and BMC haven't built their software portfolios to work with each other.

"Process management cannot work unless you understand the end user's IT operations and what they're using today," Williams explained.

"If IBM can't fully integrate workflow with HP management products on a network or IT application management products from CA then IBM may not be able to fully support management of a process that spans these areas. None of those vendors have process management with other vendors in mind. Processes are dictating the technology that gets used and, in theory, vendors shouldn't dictate process."

This opens the door to possible strategic alliances (see BladeLogic-RealOps and Opsware-iConclude), so the big guys can learn more about the space from the little guys. Such relationships often cultivate due diligence, as big vendors get comfortable with the smaller vendors' products.

Clearly, vendors who want to leap into the space would have to buy one of the startups to get to market faster; RealOps, Opalis and iConclude all have battle-tested products and legitimate customers.

"We believe consolidation is pretty likely given what happens in IT," Gupta said.

While the big guys can, as Williams said, "make a bus fly," with all of their cash and talent, the small guys are making "more headway than they should being the size they are."

This is all the more reason for the big guys to come calling with cash in hand. When the big guys come on board, Gartner and other research firms will be better able to calculate the net worth of this multi-million-dollar market.

But to date, the big guys have yet to really dip a toe in this space, leaving it for the startups.

Ironically, the biggest challenge in the market may be convincing potential customers that they need this technology to make their IT process management a less painful experience.

Williams said that while the niche is driven by the quest for IT operations efficiencies, it's a "very difficult thing to justify for a budget because the assumption is that everything you're doing is to make IT operations more efficient."

According to McDermott, it's an interesting challenge because IT processes are dependent on technology and people. "Without looking at the holistic problem, you're not going to be very successful."