Q&A: Nimsoft CEO Chris O'Malley touts new 'supply chain of IT'


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Outsourcing firms can help IT shops separate 'core' functions from 'chores'

Corporate functions from human resources to customer relationship management (CRM) have already been migrated to the cloud. But are you ready for systems monitoring and management in the cloud? More important, is management-as-a-service (MaaS) ready for your company? As part of the IDG Enterprise CEO Interview Series, IDGE Chief Content Officer John Gallant spoke with Chris O'Malley, CEO of Nimsoft, a CA Technologies company that provides MaaS capabilities. (Note: This interview is paired to a talk with CA Technologies' CEO William McCracken found here.) O'Malley, who ran CA's cloud management portfolio prior to the company's 2010 acquisition of Nimsoft, talked about how MaaS is better at handling the new "supply chain" of IT and the need for IT executives to do a better job of determining which current IT functions are "core" - important to the success of the business - and "chore." Those chore functions are ideal for outsourcing to companies like Nimsoft.

O'Malley also described why Nimsoft -- unlike other CA acquisitions -- has to operate independently from its parent, how companies make the transition to MaaS and why smart CIOs will try to change the "union" mentality in IT. O'Malley also explains why virtualizing human capital is the next frontier for IT. (Note: O'Malley is also a blogger for Computerworld.com; you can find his latest entry here.)

Q: Let's start off by discussing Nimsoft's strategic positioning. What is the unique selling proposition for the company?

Q: CA has acquired and integrated lots of companies over the years. Why have Nimsoft operate as a separate company? Why not integrate it in to the CA portfolio?

A: At the point of acquisition, we knew it was going to have to be different because it was going after a different market segment. The product has got to be developed in a different way -- how we sell, how we market. I don't know that we knew the magnitude of differences, to be honest, at the point of acquisition that we know today. We've got to be a viral company to get volume within a market segment that has got 14,000 customers and thousands of MSPs. You have to have a demand engine, a demand-gen engine that's done by Twitter, that's done by social means, to create enough lead volume. We sell differently than CA. Two billion [dollars] and below is how we designate this, a medium-sized company. It's about $2 billion to $300 million is the category that we go after.

Q: So you're trying to make it as easy for those customers to get in as a salesforce.com or a NetSuite would?

Q: Talk about the competitive landscape, what companies do you go up against in your category and how do you differentiate against them? What do you offer that they don't?

A: We run the gamut starting with open source. Nagios would be a good example on the low end as a provider that is open-source technology. MSPs that out of the gate are trying do things on a shoestring budget go after open source as the basic technology they use in monitoring services. What happens, though, is inevitably they get up to a scale and size where they need a product that is fully multi-tenant. You need a lot more to have economies of scale that you really want, because as you add customers you don't want to add a lot of head count. There are a lot of instances of replacing this single-tenant, low-end software as companies are becoming more robust in what their demands are. Then we butt up against the big guys: it's the Tivolis, the HP OpenViews, the IBMs, where customers have become frustrated. Their IT is not just what's inside the firewall, but they've done all this customization against [these products] that makes it literally impossible to carry forward in this supply chain kind of IT. You have the cost of it, the complexity, the amount of effort that you've put in to it; it's becoming a boat anchor to your ability to move forward. They're looking to hit the reset button and rather than just doing something incrementally different within IT, you probably should emulate [companies] that are in this business, the MSPs. So they'll convert from things like Tivoli and OpenView to Nimsoft.

Q: Within the pure software-as-a-service market, who are your core competitors?

We did a proof of concept. I asked the incumbent vendor and some other vendors to monitor Oracle, as an example. We gave them 48 hours to do it and they couldn't pull it off. Nimsoft did it in 20 minutes. The architecture that we have today is at a point of simplicity and elegance that they can take it to a new level. You've got to divorce yourself of old thinking and think in a dramatically different way because IT has tended to be a society of incremental changes. But you need to be aggressive and take a big step forward. It's interesting that this company would take a guy that's in his late twenties, it looks like, and make him come in with no sense of legacy ties. He just wants to make it better. And he's bringing a [perspective] and skill sets from an iPad, from an iPhone and these business-consumed apps, and he's asking all the right, hard questions. When we get scenarios like that, it's a well-defined prospect for us.

Q: You've talked and written about this distinction between 'core and chore' -- meaning focusing on the things that are core to your business success and handing off the chores for someone else to handle. It sounds like author Geoffrey Moore's 'core and context' distinction. Can excelling at managing your own infrastructure ever be 'core'? Or is it always chore?

A: In the long term, it will absolutely be chore. Medium-sized firms are not going to have data centers in the not-too-distant future. I think they're going to get to a point where managing a data center just doesn't make sense. Just to emphasize the point, I was at a panel discussion yesterday with a bunch of MSPs and somebody asked them: "How many of you MSPs actually manage your own data centers?" Now, you would think all of them would say yes.

Q: Talk about the actual migration. Someone decides to go to management as a service -- how do they make that transition? How do you guide them through? What do they keep from their existing management tools? What do they get rid of?

A: At the high level, it's dividing things into chore activities and prioritizing. The first things that hit the list are things that can be delivered as a SaaS equivalent to IT -- things like product and portfolio management. That's an IT app, it's not infrastructure software. That's a high-end candidate. Service desk is a high-end candidate because it can be delivered as an application. Because these things are now SaaS delivered -- things that have been developed in the last 18 months or two years -- they tend to be enriched with things like ITIL best practices. When these products came out 10 years ago ITIL was not that well developed.

So I can take these things that are apps and take them out of IT's responsibility, consume them as a service. As long as it's integrated with my infrastructure management software, those are the first candidates. The next rung is having infrastructure technology delivered as a service, which Nimsoft monitoring does. It's lightweight on the customer side and the application actually runs and resides in the cloud, either at an MSP or Nimsoft. That would be the next candidate I would go after. And what would drive me to do that is that I'm thinking about not just the software delivered to me, but there are now probably better people within the MSP to actually do the activities of monitoring and managing systems. Part of this is the human capital, which MSPs provide.

But salesforce.com is a good example. One of the most critical pieces of data of any company is the customer list and all of that resides in the cloud. If you really think about it, we are already doing this stuff. I think in time that the fear of security will start to subside as technologies become more robust. And the network is growing by leaps and bounds. I guess there are physics barriers, to a certain degree, at this point, but they'll start to go away.

Q: When we did our Cloud Leadership Forum conference last year with our sister company IDC, we surveyed attendees and there was still a high level of concern about security in the cloud. But we asked them to look out five years and the bulk of the IT folks in attendance said they felt security was going to become an advantage in the cloud because they felt that cloud providers would be better at security than they could be.

A: What makes your point so right is that when salesforce.com came out it had all those quality-of-service problems, right? They were highly publicized and [some people said] 'Look, this stuff doesn't work.' But these cloud companies are grossly transparent about how they perform to make it visible to the entire world. They hide nothing and they [ratchet up] the responsibility they're putting on themselves to increase their availability. The same thing will happen with security. In IT, you want to hide the fact that you were down at three in the morning. We hope nobody found out about it, we definitely don't want to promote to the business that it occurred. In the cloud world, you're totally transparent. We use Twitter to post availability of systems for anybody to look at at any given point in time. The minute that system isn't available, it's tweeted to the world. We're like cats on a hot tin roof. It helps us to just get better. The level of transparency that you have to offer to compete in the cloud means your standards have to go through the roof.

Q: Do you work with Microsoft on the Azure platform?

A: We're beginning to. For certain elements of the CA technologies, we do work with them. Our ARCserve technology is resident in the Azure platform for doing backup. We're beginning to work with them and have discussions around Nimsoft. But we're trying to engage with all of the vendors for all of these platforms and be a part of them. In order for customers to exploit these PaaS platforms, they're going to want to manage those as though the infrastructure is inside the data center. They're ultimately responsible for the service availability and response times. So more and more of these vendors are accepting the fact that this is just a better approach and it's going to help them get more customers faster.

Q: You offer both on premise software and a service, why would someone choose one versus the other?

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