Q&A: BMC takes on management of cloud computing

Cloud computing makes systems management even more important --- and much more complex

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Q: Are customers finding new ways to put these tools to work? Are they discovering ways to bring in revenue or at least achieve better ROI?

Behnia: As I said before, one of the leading metrics around how agile the organization is is how quickly it can respond to new capacity requests or requests for new services. On average we're seeing anywhere between 40 days in best-case scenarios, well-run organizations, to as high as 110 days in some of the largest billion-dollar-IT-budget companies. We can reduce that down to literally a day. I was with a CIO that said how this is almost like FedEx. They want to have next-day delivery, or second day, or fourth day, depending on what the service is. So what that shrinkage in time means is that that's more time for developers to write new software, and marketing programs can get run faster. Not only does it impact the bottom line in terms of efficiency, but it directly affects the top line as well.

Q: Are they telling you about ways they're making money?

Beauchamp: Sure. We have a lot of customers in the insurance industry. A year or two ago they all kind of simultaneously panicked about their infrastructure, and they came to the realization they had to -- I'll use the old term -- Webify their offerings. What they were really talking about was revamping their distribution models. We've got to get the customers to go on line, stop talking to people, stop picking up the phone . . . just do this all on the Web as much as possible. So they went into this rush to bring all their front-office applications online and to make them really simple. One customer told us that right before they standardized on our software, they had an entire state that was down for two days and didn't know it until the reports came in and they saw they had zero revenue come in from the state.

Now they want to go the next step. They want to be able to deploy new applications very rapidly, push out new systems and new revenue-generating applications. The revenue drivers that they're forecasting have to do with new content going out. Content's got to be technology based, and we've got to do it in a cloud environment, we've got to go quickly. If they don't get it out quickly, or if they're price inefficient, they're not going to be competitive. They all want the self-service model.

I'll give you another example. One of the world's largest software companies called us up. They traditionally have sold their software with the white shirt, red tie, blue suit kind of approach where somebody walks in the door and you buy the big blob of software. They have become convinced that the road ahead for them is one where customers will go to a Web site, they will specify, "I need these application modules," and here are different pricing models. This one is number of seats. This one is all you can eat. This one is nine to five, Monday through Friday. Customers basically want to arbitrage price and have the ability to decompose their pricing. Traditionally companies have fought like crazy to not allow that. Now they're basically saying, "We give up." It's going to ultimately become disaggregated. Customers are going to be able to see our pricing models. But then in order for us to not go broke, we have to know what our cost model is for delivering that.

Q: You're talking about retail.

Beauchamp: That's right. Enterprise is going retail. In order to do that they need cloud-based solutions, self-service, customer-requested. They can't have any people involved in this. It's got to be a no-touch environment. This is what I think is fascinating about where we play. When I joined BMC in '88 the job was: Somebody bought something, it was working fine and then it broke one day so they called up somebody else like us to sell them a tool so that wouldn't happen again. Like high-speed backup or red light, green light [management}. Now what they're saying is, cloud is as much about automation and about self-provisioning and service-level management, compliance and transparency as it is about the infrastructure itself. Management actually becomes the delivery mechanism for the application.

Software as a service

Q: Where are you playing on the SaaS front?

Beauchamp: We give our customers the ability to deploy clouds so that they can be providers. We also work with the service providers -- and, by the way, outsourcers and systems integrators who want to set up multi-tenancy environments for delivery systems -- to configure, deploy and charge and manage cloud-based service platforms.

In the last quarter we announced two major SaaS offerings -- our Remedy, which is you know the world's largest IT service-management system, as a service on demand. It's hosted. It's delivered. It's secured. You don't have to go in and set it up in your centers, and you can run it yourself and deploy very rapidly. Also, Salesforce.com announced Dream Force a few months ago. So they now have a service desk on their platform called Force.com that their salespeople actually get paid to sell. And this is not their typical partner deal. This is a special relationship between our two companies.

The other thing we do with SaaS is we sell software to Salesforce.com, Concur, Edmonds and others who themselves deliver SaaS. They need management just like everybody else needs management.

Behnia: We also can help manage SaaS applications for the enterprise. If you want to know how many licenses you have on your SaaS-based applications, our asset management system has been extended to be able to account for those licenses. If you want to do response time monitoring, you can do that.

The changing role of IT

Behnia: This is a thread that really ties both the cloud piece and SaaS nicely together: We see the role of IT as evolving and changing from being the sole provider of services to the aggregator, broker and the integrator of these services, whether they're internal or external services -because when there's a problem with Salesforce.com, you don't call Salesforce, you call your internal IT help desk.

Beauchamp: In a sense you're now talking about things like core network services, things that people in that business have always talked about. But now you're now starting to talk about it for the data center. IT becomes this aggregation manager for wherever this stuff sits. And it may very well be there's nothing in your data center. Your data center goes away, even for larger companies. [Instead] it's going to be popping all over the place.

Behnia: We see multi-sourcing as where people take an individual service and then ask who's the best provider at this price point and efficiency?

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