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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The competition

Q: Talk about the evolving competitive arena today. You're dealing with some pretty powerful companies that didn't start as management companies.

Beauchamp: I went to see Jim Barksdale and Marc Andreessen when Netscape was a little company; they were the hottest thing on the planet. I said we ought to talk about enterprise management. At some point one of them said, the whole management layer's going away. There'll be no need for a management layer because the Web is going to make that irrelevant. We're going to have our management products based on Web technologies, and we're going to build a complete management stack. Same thing with Oracle and Microsoft -- I met with Larry Ellison and Jim Allchin and they said the same thing. Everyone says, 'We're going to build a complete management stack.' And every time the same thing happens. The customer starts saying: Why are you the logical person I'm buying this from? Am I going to trust Oracle to manage Sybase? So it begins to get wobbly. The other thing that happens is in the vendor's board room when they have a bad quarter and money's tight. They're saying, how much money are we spending on management and why? It's outside of our core. So they ultimately bail out.

Now HP started early and they're in it. IBM with the Tivoli deal got in it. And then there's us. And you can argue that CA certainly has a lot of stuff, right?

CA is primarily a mainframe company still, as best as we can tell. They've done some acquisitions of some nice products. And they talk BSM, and they talk cloud computing. I don't take them lightly, and we compete with them every day.

Q: What's the defining philosophical difference between your company, HP, IBM and CA?

Beauchamp: The management business, in the case of HP, is I think 2.5% of revenues. It's an interesting business. But at some point their board of directors has to talk about the other 97.5% of the revenue. By the way, [for customers] HP says you really need to use our servers, because the only way you're going to get the full robust capability out of this is going to be on our platform and our storage. There's just an inherent conflict of interest around buying the agnostic management layer from the people that are also selling you the entire soup to nuts platform. I would say that in general customers would view that as lock-in.

You're seeing basically a reverticalization of the stacks, like back in the BUNCH days. [Editor's note: Burroughs, Univac, NCR, CDC and Honeywell were mainframe rivals to IBM collectively known as the 'BUNCH.'] You're seeing companies do what they did back then: we've got our own processors, we've got our own OSes, we've got our own services, we've got our own hardware, our own storage, our own app layers, our own management layer. You can buy it all from us. And look how happy you're going to be. And then Oracle came along and said, I've got an idea, why don't we do a horizontal database that runs across all of them, disaggregate what was pricing leverage? And Oracle just went from nothing to gigantic, basically busting those stovepipes.

So then everybody else followed suit. I'm going to be the operating system company, I'm going to be the database company, I'm going to be the desktop company. I think the same gravity that caused [vertical integration] to fail in [the BUNCH] time will cause it to fail again. The integration is not meaningful. And it gives the vendor enormous leverage.

Behnia: And it's not practical given how much customers have already invested. These aren't green field, brand-new data centers where the customer's going to buy 20,000 brand new servers and forget about all their 105,000 applications that have been written.

Beauchamp: CA built an incredible franchise back in Charles's [Wang] day just buying up a whole bunch of companies and basically taking that whole space, and saying, if you want one of those, we've got a bunch of them, right? There's nothing inherently wrong with that. It's just a different strategy.

Tivoli almost got it right back in client server. It's just -- the technology didn't really work, and it was client server-based . . . and some other things. But it was a pretty doggone good story. When that Tivoli framework came out, we looked at buying it. We went into discussions to acquire Tivoli before IBM did and I was involved in those discussions. I told my boss, if they can do what they say they can do, they're going to put us out of business.

So when I got the keys to the car in 2001, I basically said, let's do this again, but let's do it right this time. Let's not make it a big heavy framework, and let's break it down into bite-sized pieces. Let the integration occur naturally. When you buy the second piece, it should find the first piece and work together. Not that you can't upgrade this one unless you upgrade this one. We basically just redid the framework thing, modernized it, because it's got to work that way. The world cannot accept hundreds of point products that just manage one thing. It's illogical.

Q: Each new computing paradigm sets up a new set of gorillas. So how big a risk is it that cloud is so different that it's going to open the door to a vendor who approaches management completely differently?

Beauchamp: There's a moment of fear that we experience every time something disruptive and new emerges. Once that wave passes, the next fear for us was: We know cloud's going to be big. We know customers are going to make architectural decisions. We have to win those bakeoffs. So we set up a task force across the organization, and we just focus on winning that architectural [bake-off]. So we've got product initiatives. We've got distribution initiatives. We've got marketing initiatives. You know there's support, how we go to market. We're starting to win these deals. Now the next fear is ... is something entirely new coming along, and management just becomes irrelevant? And a customer told me why he didn't think that would be true. He said: Eventually something is plugged into the wall, right? It's not really in the cloud. It actually is sitting over there and it's running. And so I just don't see the uber-clouds annihilating all the management layers. Private cloud to us is just another operating system inside our existing customer base.

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