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

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

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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?

A: Basically, we wanted to get after a different customer set than [CA] would traditionally have gone after. If you look at CA, it's predominantly focused on old mainframe customers. It's reached beyond that to maybe the top 2,000 IT operations companies. But if we're going to grow, we have to get outside that customer base and become relevant to more newer-age companies, which tend to not grow up with big iron. They are using the cloud as a means of building the business. Groupon is a good example, or Netflix would be a good example.

When we made the decision to acquire Nimsoft, we saw it fulfilling a trend that customers of an echelon below those top 2,000 were the most aggressive at looking to the cloud and cloud services. It makes sense, [because] they don't have the capital, they want to pay as you go. The utility concepts and benefits of the cloud are very appealing to them. They want a technology that was purpose-built to not only manage their own IT, but what was happening in the cloud, which is becoming the supply chain for them. Imagine IT basically being cut into pieces and then being able to bring back that data in a unified way.

The other part was the recession. A $1 billion company may have had five Microsoft experts before the recession, but they got rid of two as part of the new normal. You had executives saying 'This is just crazy, it's riskier for us to do IT management internally than externally. This isn't a question of whether we should outsource or not, we just can't do it internally anymore.' They wanted to push the responsibility to an external provider to do these things on their behalf and that was the advent of the MSP [management services provider]. MSPs have really grown over the last five years from nothing to a substantial part of the market. Nimsoft is purpose-built for that model of [managing] stuff in the cloud, stuff on premise. We've built up a substantial penetration into the MSP space. It's been characterized as the most envious position in the MSP space. We've got Rackspace, we've got CSC, we've got Verizon, we've got HCL [Technologies] -- it's a who's who list of players that are starting to assume this responsibility.

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