CIO Insights: Gartner CIO Survey Vertical Perspectives

The Gartner perspectives on the CIO survey data always makes for great reading at the start of the year, and these documents for 2017 were published a few weeks ago. These documents are created by the lead analysts in a particular region or vertical slice, looking at the CIO survey for their coverage areas. The insights which come out are interesting in spotting key trends. As someone who’s constantly traveling and meeting AppDynamics customers and prospects, these perspectives are appreciated and useful to me. In this blog, I’ll highlight some areas of interest, and hopefully you’ll find them useful, too.

Bimodal Increasing

Bimodal is a polarizing topic on the internet, but quite normal across enterprise companies I speak with. Regardless of how you feel about its ultimate success, most are on the journey, and you can see momentum is only increasing. Based on 2017 CIO Agenda: A U.S. Perspective, 09 February 2017 ID: G00318400, bimodal has moved from 38% of companies adopting this strategy in 2016 to 43% in 2017.

Whether you agree or disagree, strategic change is happening. Change is a good thing, if we don’t experiment, we cannot adapt.

Differences Between Local, Regional, and National Governments

In the government sector there are several interesting observations by Gartner analysis of the polling data. In the document 2017 CIO Agenda: A Government PerspectivePublished: 09 February 2017 ID: G00318319, the number one business priority is technology initiatives and improvements, but the priorities after the overall improvements required vary across local, regional, or federal/national governments. 29% of local governments place customer focus as number two of their top business priorities, ahead of security at 20%. For regional governments, their top business priorities are reversed, with 24% stating that security is the number two priority, and 23% stating that customer focus is the number three priority.

At the federal or national level, digital business and security are both tied with 17% naming them in their top business priorities, but analytics is the most critical focus, with 20% of respondents naming it as a top business priority.

Federal and national budgets continue to decrease, yet 43% of defense and intelligence CIOs prioritize technology initiatives and improvements as a top priority in order to keep pace with the rapid advancements in technology.

This may continue to shift within the U.S. as federal budgets are likely to change significantly this year, especially with added investment in defense (http://www.reuters.com/article/us-usa-trump-budget-idUSKBN1661R2).

Healthcare

We’re seeing major changes in healthcare, including an increased level of digital interaction and interconnection between providers and the individuals they serve. This includes remotely accessing services and communicating with providers via portals, along with leveraging new channels such as video for patient communications. Healthcare is being changed by adding new capabilities including e-referrals, and provider care is improving by sharing EHR data across organizations. In Gartner’s research, 2017 CIO Agenda: A Healthcare PerspectivePublished: 09 February 2017 ID: G00318362 , the healthcare data is being collected and analyzed to provide better care by leveraging advanced analytics, not surprisingly the largest area of investment at (88%).

Healthcare is rife with opportunities. Firstly, improvements created by IoT provide a substantial benefit versus today’s aging protocols and technologies. Using standard web services and interoperability will allow for advanced methods of collecting data from embedded devices and sensors. IoT is a major area of investment for healthcare, which was called out by 53% of survey takers in this vertical.

Yet there is cause for concern — the data from Gartner’s survey points to healthcare lagging behind most verticals. You’ll notice in the comparative data that advanced analytics is a major area, while top performers have moved on to more advanced algorithmic use cases such as machine learning.

Over the next few months I look forward to going into depth on some other region and country-specific analysis. Specifically, I’m going to dig into some interesting insights into Canada, the Nordics, UK, and Australia and New Zealand.

Learn more

Read Gartner’s Magic Quadrant for APM to learn why AppDynamics leads in vision scoring, by providing real-time business visibility with Business iQ.

Industry Insights: Renovating the Configuration Management Database

Digital business is the norm for many enterprises, yet with this ongoing digital transformation, changes in visibility and service management are paramount. As part of these initiatives, they are deploying modern tooling to support their agile business initiatives. The end users I most often speak with are managing or implementing monitoring and often APM, but secondarily, they are also looking to transform their service management. Most organizations today implement a best-of-breed or mini-suite approach. As Gartner states, “During the past four years, the market share of the large ITOM software vendors has shrunk with investments going to new innovative vendors, software infrastructure vendors and open-source solutions.” (Toolkit: I&O Leaders Partner With ITOM Vendors in a Volatile Market). The vendors making this tidal shift possible include us and several others, often including our great partner ServiceNow.

Part of these service management initiatives include trying to implement or renovate their configuration management databases, or CMDBs. At AppDynamics, we believe the future of the CMDB is far more aligned to mission-critical applications, and to understanding transactional topology and users. Becoming business-aligned must occur at all levels, inclusive of the way data is captured and used. Thankfully, we aren’t the only ones who believe in this future path CMDBs must take.

I have been closely following analyst Hank Marquis, who joined Gartner last year. Hank’s background goes back to the origins of the concept of the CMDB in the mid-2000s. I had an interesting inquiry with him last year, when he said that the original intent of the CMDB was to include only critical assets, but this was twisted by most vendors in an implementation where the CMDB became an asset repository. Soon after this discussion, he published the following research document:

(Sorry, Gartner subscribers only): Three Rules to Renovate Your CMDB to Improve Business Outcomes

In this research Hank explains that you should only include the IT assets that support your CMDB business improvement goals. Hank explains that “Over half of CMDB implementations become unmanageable due to scope creep, or including too many IT assets as configuration items in a CMDB.”

Last week at the Gartner IT Operations Strategies & Solutions Summit, Hank presented “Renovate Your CMDB to Improve Business Outcomes,” where he explained how most CMDB projects fail and will continue to fail. Most organizations keep trying the same implementations and do not end up with a usable project.

 

The rules outlined in this slide explain some of the key ways that CMDB implementations succeed. These critical projects need a new set of constraints and ideas around them to be relevant to today’s modern and digitally driven businesses.

Hopefully, users will heed this great advice, and we’ll start seeing more successful projects. Right now I believe the 80% failure rate that Hank uses in his research to be extremely optimistic in nature.

Industry Insights: CIO.com State of the CIO 2016

Last month CIO.com published both data and analysis on a survey they conducted the state of the CIO 2016. Some insights presented are that there is no end in sight to digital transformation. While companies are increasingly investing in digital channels there is no finish line. These projects represent an ongoing adaptation of business models, which will never cease. There are some interesting changes year over year around employment demand slowing, and a re-alignment of specific skill-sets.

CIOs have two clear focuses of where they spend time; these are essentially the two key value propositions of the AppDynamics Application Intelligence platform. We focus primarily on system and application performance improvement and troubleshooting. Additionally, we also provide IT and business alignment with our analytics and APM data extraction in a single unified platform.

Although business alignment is a key element for most CIO strategies their perception of being a business partner is not always shared by their business counterparts. The lines of business don’t believe they are as aligned based on this interesting IDC data:

In order for IT to become business-aligned there must be a shared focus on the customer. This means ensuring peak performance of applications and infrastructure, and measuring user experience as a key way to gauge the ability for IT to deliver effective services. Increasingly, if IT can enable business visibility by capturing, storing, and making this data available to be analyzed by automated analytics or humans, there will be increasingly better business alignment.

 

Industry Insights: 2015 Gartner Data Center, Infrastructure & Operations Management Conference

The Gartner Data Center, Infrastructure & Operations Management Conference was held in Las Vegas earlier this month, and attracted over 3,500 attendees and over 113 sponsors including AppDynamics.

We had a lot of users stop by, and I spent at least 8-10 hours at the booth talking to analysts, users, and existing customers. There was a large degree of variance in the topics ranging from those who didn’t know what APM was to those who were large happy customers of AppDynamics. There was a lot of discussion about the monitoring market, APM, analytics, and other ways to leverage APM data for business visibility.

Keynotes

While the Gartner keynotes reiterated the messages of Symposium this year, the CIO survey data was presented by Dave Russell and Mike Chuba, the conference chairs. There was increased focus on bimodal for infrastructure and operations (I&O). To most, bimodal means agile methodologies and multidisciplinary teams. The implications on people, process, technology, and culture were well discussed, but the mess that bimodal often makes was avoided in the talk. Gartner does have other good research on issues with implementing bimodal. Having two organizations that are often warring factions is not healthy for the culture or the business. Ray Paquet also presented specifically on bimodal IT, addressing the transformation to digital that is driving the bimodal strategy. There is a building momentum of revenue coming from digital business, and Gartner predicts this will accelerate.

IT, Meet Finance

When I was an end user buying technology, I never really considered the viability of vendors. I was buying software from both small and large companies and never really evaluated them beyond a cursory look. Gary Spivak, an analyst at Gartner, came from being a Wall Street analyst into covering vendors in the ITOM space. He’s done a lot of interesting research, and taught many analysts (including myself) on how to better judge viability of vendors to deliver what is expected by end users. His session, “What I&O Leaders Need to Know When Key Vendors Face Investor Pressures for Change,” was quite enlightening, especially considering all of the changes we’ve seen in the market — but it’s even more critical given the pending mega-acquisition of EMC by Dell. According to Spivak, the investor’s goal is to make money and profits; the end-user’s goals are to buy products from companies who can innovate, provide high quality support, and deliver a good product. The reality, at least in my time buying software, is that large vendors offering legacy solutions rarely deliver to these expectations. The combination of activist investors and private equity has been a great recipe for making lots of money, but it has not been good for end users. Gary also predicts that “By 2020, at least eight of the Top 12 publicly traded ITOM vendors will respond to activist investors to sell all or parts of their businesses, up from two today.” His advice is to review the ratings of vendors you are buying from, take action if they are acquired by private equity, and do not accept the answer of “‘business as usual,’because it almost never is.”

Cloud

Dennis Smith presented a great session on “How Containers and Cloud Management Can Be Synergistically Deployed.” He covered each of these technologies and how one could, in theory, define and deploy a layer of API interoperability.

Analytics

Colin Fletcher presented, “Work Smarter, Not Harder by Digitalizing Operations With Analytics,” in which he presented how far analytics have come in a short amount of time. Image recognition has gotten as good as humans in the last five years. Within I&O, we still do a lot of manual rule writing, especially in monitoring. Some companies have put in automated baselining, as we have in the core of AppDynamics, but many users still use static thresholds. Rule writing is tedious, error prone, and does not scale. Gartner estimates that the IT Operations Analytics (ITOA) spend was $1.7B in 2014 and expected to grow 70 percent in 2015. This is clearly an area of innovation and investment, something we are seeing with AppDynamics analytics. The bulk of this investment is purchased to be used by humans doing the analysis versus having intelligent machine learning technologies in place. More on that later.

Application Performance Monitoring

Finally, the sole APM-specific session was presented by analyst Cameron Haight, “Rethinking APM in a Digital Business Era.” Cameron took a unique approach to this presentation, drawing all of the graphics himself. The angle of this presentation was also quite progressive. The target was the new requirements introduced by digital business models, and how APM is changing to meet business demands. Digital businesses leverage new capabilities in technology; for example, the Internet of Things, which in turn creates exponential increases in transaction volume and data velocity. These apps are built upon new architectures, including microservices, running on platforms such as AWS Lambda or other PaaS solutions, where the container is the new infrastructure. The net result for those building and supporting apps is that microservices are the new norm, and many more languages will be introduced into stacks, along with new data platforms. The velocity of changes and ability to change components at different speeds will be a business requirement. The result is that a lot of complexity is being introduced, which will be a major challenge. Cameron states that APM vendors must address the old models they currently use to price solutions to align monitoring costs with these new architectures. In order to deal with these changes, the user interfaces not only must allow exploration, but also provide new ways of visualizing data. Finally, the use of advanced analytics must allow tools to learn your patterns and workflows and predict what you are likely to do next.

Cameron then explains that “the purpose of APM is digital business insight, not numbers,” meaning APM tools must do a better job at providing the analysis, versus leaving the human to come up with a conclusion from the data. APM is not optional and should be used across the lifecycle.

Cameron’s last point is that APM should be provided internally as a service, which requires changes within the organization. He provided some similar alignments that Adrian Cockroft has put together about platform monitoring teams.    

Selecting APM technologies which can handle all of what exists in these new stacks is a challenge. This is primarily the reason why legacy APM providers are no longer an option for most organizations, and new providers which can support these architectures, such as AppDynamics, are most often selected.

It was interesting to see the crowds at the conference. Clearly, there is a major shift happening where people care less about the hardware and more about the software. The sessions on servers, physical storage, and converged infrastructure were far more lightly attended than those on public cloud, containers, and other software-driven infrastructure technologies. This is precisely the reason why infrastructure monitoring and visibility must evolve and change significantly from the physical world these tools previously managed.

 

Industry Insights: 2015 Gartner APM “Suites” Magic Quadrant

The 2015 edition of the Gartner Magic Quadrant for APM published this week. There were several interesting changes, the first being that the name of the research has been changed. The research is now titled “APM Suites” versus simply APM. The second big change is the lead author; the research is now being led by Cameron Haight, a 15-year veteran at Gartner. Having worked with Cameron for many years, I was glad when he took over to lead the APM research. He’s a progressive thinker at Gartner, having pioneered the DevOps research in 2010, and then going on to kick off Gartner’s Web-Scale research in 2012. Most of what he was writing about and taking client calls on were very progressive topics that were on the cusp of normality. DevOps has reached normality, and hence is positioned on the peak of expectations in the Gartner Hype Cycle. With all of Cameron’s progressive thinking, I was quite surprised to see the APM research have such weightings applied to legacy technologies and business models.

Most APM Tools Are Poorly Integrated “Suites”

Gartner identifies that most of the vendors, especially the legacy vendors, have broad suites of tools, which are poorly integrated. Gartner pointed out in the survey results earlier this year that APM tools are not as widely adopted due to lack of integration, which is the second most cited barrier after price. The fact that Gartner has adjusted the name of the research explains some of the changes in the model that affect relative positioning of legacy vendors. Gartner is saying that suites are okay here, even though they present a major barrier to those implementing and managing these tools.

The Legacy Lives On

While legacy software vendors exist within IT operations management, there is clearly momentum towards newer technology providers. Why is this shift occurring? Digital transformation is not an option. It’s a requirement to remain in business. In order for these companies to transform, Gartner recommends implementing a bimodal strategy; the net result is that model 1 manages legacy systems, while model 2 is the fast-moving group. Becoming innovative is not an option, Gartner states in “How to Achieve Enterprise Agility With a Bimodal Capability”:  “At the heart of the digital transformation and bimodal is the need for enterprises to become more creative, to break out of the business as usual and, in particular, to establish a stronger capability in technology-led business innovation.” The result of this is that legacy ITOM vendors existing in mode 1 teams will collect maintenance revenue, but fail to grow, while mode 2 is where growth and innovation is occurring.

Favoring Legacy Software Revenue Models

Once again, in Gartner’s own words, software is transitioning to new consumption models. “As subscription-based alternatives and particularly software as a service (SaaS) are being adopted by organizations, a more predictable revenue pattern will emerge”. Modern software companies have shifted to subscription-based revenue models. What this means is that for subscription businesses, revenue comes during the lifetime of the customer, versus being paid up front as it is for perpetual businesses. Revenue is a lagging indicator for SaaS businesses, whereas bookings is an accurate measure. Gartner is using 2014 calendar-year revenues, which favors these perpetual businesses. The reason why Gartner is using this data is because revenue is reported by every public company; hence it’s easier to obtain for many vendors, but it also favors these legacy models. Every business is slowly transitioning to subscriptions, but many legacy providers cannot make this jump. For example, based on IDC data for systems management vendors, Dynatrace’s SaaS revenue declined 3.3 percent in 2014, as they continue to sell primarily perpetual software along with the other legacy vendors.

When analyzing the IT Operations Management market, the fastest growing companies in the space, and the most relevant to their respective markets, include AppDynamics, New Relic, Splunk, and ServiceNow. These businesses are almost entirely subscription revenue model, while the legacy vendors are primarily perpetual software models. This shows that ITOM has a massive legacy of companies that cannot transform and have failed to transition.

Private Equity

Private equity has been extremely active in the ITOM space, especially in monitoring. Thoma Bravo now has acquired seven public companies in this space. I was fortunate enough to sit in on Gary Spivak’s financial sessions at the Gartner Data Center, Infrastructure & Operations Management Conference in December 2015. In Gary’s session and research note titled, “How to Re-evaluate Strategic Vendors Acquired by Private Equity,” he mentions the reason PE firms acquire these companies. “The company has a lack of revenue growth, accompanied by strong cash generation.” Clearly, these companies have large installed bases generating maintenance revenue. Additionally these leveraged buyouts require a large portion of financing or debt to execute, and with today’s low interest rates they can pay off the debt they accrue. As Gary states, “The company’s cash flows are sufficient to make interest payments on existing and new additional debt (commonly referred to as a debt burden), and still sustain business operations (to an extent).” With each of these acquisitions there have been immediate layoffs, reductions in sales forces, and typically a reduction in R&D. This translates to profits for the private equity firms, but these goals do not align with what end users expect. In this same research, Gary indicates that privatization of companies like BMC amassed a large amount of debt owed by the company; BMC moved from $1.8b to $6b in debt. When Dell went private, the debt swelled from $9b to $18b in order to fund the transaction. During privatization, Compuware raised an additional $2b of debt to fund the transaction. This debt or obligation is the responsibility of the company, not the private equity firm.

Growth

When analyzing the growth of these vendors, the picture for many is quite bleak. In a previous blog post I analyzed Gartner’s own market data numbers, and many companies included in this research who were scored with high marks in execution are failing to grow at the rate of the market expansion. This means that new business is not going to legacy players, it’s going to the new breed of company solving today’s new problems. The health of these businesses are in question, yet they are being rated as viable, well-executing companies.

No Visionaries

I was quite surprised that no vendors fell in the visionary quadrant. There are two ways to describe this:

  1. It’s very hard to build a fully capable APM tool, so most vendors do not want to compete with market leaders in this space.
  2. The market is mature, meaning there are fewer scrappy startups as there once were just a few short years ago.

Clearly the problem has not been solved. By most expert estimates, fewer than 10 percent of enterprise applications have APM tools in place, meaning there is a lot of work to be done to solve application problems. None of the challengers can build a compelling vision for how to solve these issues in a unique way?

One can hope this model evolves with progressive thinking to meet the demands of today’s digital businesses as they try to remain relevant in a time of disruption. In Gartner’s own words, “CEOs should assume that business model change will be forced by new digital entrants or an adjacent competitor within the next two years.”

(2015 CEO Survey: Committing to Digital, Mark Raskino ) digital transformation is not an option but an imperative for CEOs today, and this imperative is only addressed by innovative companies.

Industry Insights: My thoughts from AppSphere 15

Stuck in Vegas for two weeks, longing to be back home, it was a trial of might and perseverance. The first week was spent at AppDynamics AppSphere, and the second at the Gartner Data Center, Infrastructure & Operations Management Conference. (Look for a post next week on the Gartner conference.)

The second annual AppSphere drew 1500+ attendees, doubling the 2014 attendance. There was lots of passion and wonderful user engagement, but most importantly lots of exciting product announcements. The change from 2014 to 2015 was noticeable and impressive.

Having spoken at the first AppSphere on behalf of Gartner and feeling the energy at the conference, the momentum and acceleration one year later was apparent in the content, scale, and depth of the conference. In 2015, AppSphere expanded from one track to four tracks, and there was a large increase in customer and partner speakers. Product announcements included Browser Synthetic Monitoring, Server Infrastructure Monitoring, and new enhancements for session management, the C/C++ SDK, and many new AWS extensions. The most surprising feature customers were excited about was the ability to tie log messages automatically to the transactions that generate them, providing context that has been missing in the ITOA industry.

On the sessions side, there was a highly engaging customer presentation from HBO. John Feiler, senior staff engineer, provided insight on the challenges of video streaming at scale. AppDynamics was used to correct issues before the season five premiere, and is used through the application development and operations lifecycle. This ensures a high quality viewing experience for all customers (including me).

Other great sessions included Pearson’s Mike Jackson and Tim Boberg. Pearson is a global leader in learning, and they use AppDynamics across the enterprise, serving over 1.3 million daily logins via over one billion page views every two months. Pearson was challenged in providing a standard way to see and monitor across many different technology stacks. Their tool of choice is AppDynamics.

BarclayCard’s Peter Gott explained how they were able to remove silos and get the organization to modernize and share data effectively using AppDynamics technologies, working across a highly variable technology stack and ultimately greatly improving user experience and uptime. Barclaycard has many more digital initiatives, including wearables and new mobile payment technologies, where AppDynamics plays a key role.

There were many other compelling and informative sessions. I wish I could have attended more of these —  the audience loved hearing from customers, as did I!

There were also two great panels. I was honored to chair the microservices panel, featuring product managers from Red Hat, Microsoft, Google, and a heavy microservices user, DreamWorks studios. My colleague Prathap Dendi led a panel on IoT, which was particularly interesting, featuring customers from Garmin, Tesla, and SmartThings. Our partner Red Hat also participated in the IoT panel.

Partner participation included RedHat, Microsoft, Trace3, Bigpanda, Apica, ExtraHop, Capgemini, Scicom, Column Technologies, Moogsoft, xMatters, Electric Cloud, Neotys, Orasi, and mainframe partner DG Technology Consulting. We thank them and look forward to working with all of our existing and new partners throughout 2016.

We are looking forward to another record breaking AppSphere conference in November 14-17th 2016, we expect to once again double attendance, fingers crossed.

Industry Insights: Gartner Survey Analysis Critical Dimensions in APM

Gartner analyst Cameron Haight did a survey Survey Analysis: End-User Experience Monitoring Is the Critical Dimension for Enterprise APM Consumers (Gartner clients only) over the summer across users about their APM implementations. There are several key areas where the data is quite telling.

Users main concerns

Users of APM tools based on this Gartner survey, and in my experience indicate 3 primary issues with APM tools.

  • APM tools are too expensive

This is a valid concern, APM is not inexpensive, but when compared to the cost of APM 7 years ago, the license costs fallen over 75%. Typical APM tools would cost $15,000 – $20,000 per server. Today we are looking at pricing closer to $4,000. These are list prices, which we know people do not necessarily pay. Additionally the time to value, implementation time, and spend for services which used to be typical in the past are a fraction of what they were once. I would estimate the cost of deployment and maintenance with a modern APM tool is 10% of the work of a legacy tool. This cost savings is not only hard dollar amount but results in faster ROI, and a shorter time to value.

  • APM tools are not well integrated

While this complaint is certainly the norm in the industry, at AppDynamics our unified monitoring approach addresses this concern. Building a single user interface and single installation for the platform which is leveraged across the monitoring capabilities. Additionally, by building integrations and facilitating an open ecosystem, connecting systems together becomes easier than the past. With modern software applications this has changed significantly.

  • Tools are too complex

Deployment, and usability within tools has been a major issue. At AppDynamics, we address this issue with our modern web based UI, easy deployment, and platform administration. This is coupled with a much smaller footprint for our controller (the monitoring server we require), requiring less resources to deploy (or just use SaaS and you don’t have to deal with the controller at all).

Breadth of APM implementation

25% of the 207 respondents say that APM is on 25% or more of their applications. I would have guessed this number to be much smaller. The question was not very clear if it was targeting critical applications or all applications. Users also have misconceptions about what APM is. When a server monitoring product can capture metrics about applications or application health it doesn’t make the tool an APM tool. Similarly, the use of older synthetic monitoring tools often qualifies for most as APM, when it does nothing to monitor the performance of users or transactions.

APM Buyers

APM tools are bought by a lot of different people in most organizations, we see everything from single user buying, departmental buying, and enterprise-wide buying. For many of the reason outlined above the enterprise motions tend to happen over time as APM gains traction. Most APM tools 5+ years ago were bought by landing big enterprise deals, but today most land in smaller deals and expand across  enterprises. There have been many swings of the pendulum between suites of tools, mini-suites of tools, and best of breed. We’ve been in a best of breed cycle for the last 5 years, and this is likely due to the level of importance technology is playing within businesses as they digitally transform.

Based on Gartner survey data, buyers are opting for best of breed 59% of the time, which seems surprisingly low based on my conversations, and the fact that suite providers are significantly behind market leaders within APM. The only explanation for this is that those taking the survey may not currently have active APM initiatives, or do not understand what is and what is not APM. Haight then goes on to state “Enterprise APM consumers should deploy best-of-breed approaches as skills and finances dictate, but make sure to account for the potentially higher costs of integration.”. This is another area which large suite vendors sell on powerpoint, but upon implementation the integration is extremely challenging. The integration within suites of tools is incredibly expensive and complex to deploy and maintain, most organizations require heavy services outlay to implement and maintain integrations, even with suites of tools. These large suite vendors provide illusions of well integrated tooling, but based on first hand knowledge this is not the case.

The buyers are broken down as follows, which is accurate based on my time as an analyst and my time at AppDynamics.

  • IT Operations = 67%

  • App Support = 11%

  • App Dev = 8%

  • Other teams = 15%

The App support function is often part of IT Operations, hence differentiating between these two teams is often difficult.

Users also express concerns for legacy APM solutions to deal with large transformational shifts occurring through digital transformation. Once again, many vendors which sell legacy tooling are now messaging towards digital initiatives, when their tooling is not suited to accomplish these things.

Major shifts in the way software is designed, implemented, and analyzed are also shifting. The Gartner survey points out shifts most concerning to users include IoT, Cloud (SaaS), Mobile, and Microservices. There is clearly a large market opportunity for visibility in these areas, especially SaaS and IoT where APM vendors have limited ability to support these environments today. Although AppDynamics has many great customer use cases in Microservices, Mobile, IoT, and Cloud there is still a lack of technology with APM vendors to handle deep monitoring of SaaS along with having limitations when instrumenting IoT devices built on microcontroller architectures. These all present themselves as areas where our innovation and focus will create new ways to create visibility.

The key takeaway is that APM still has a long way to go to be as penetrated as it needs to be, and there are areas where major innovation has yet to occur to deal with new computing platforms, new connected devices, and new software architectures which will drive the next evolution of computing, data capture, and analytics.

Industry Insights: What happened to Boundary?

While I was at Gartner there was a trend towards distributed analysis of the network and host metrics; this trend was something we decided as a group to call AA-IPM and has since become IPM. In the research note How to Leverage Application-Aware Infrastructure Performance Monitoring to Simplify Root Cause Analysis (Gartner client access only) these products were explained and profiled. IPM tools tend to work from the server layer and provide a more agnostic and less user-focused visibility of infrastructure performance, allowing for isolation of performance issues down to the server. In the past 18 months since this note was published several things have happened: 

  1. Digital business transformation has become front and center for most organizations, creating the need to focus on the user and application, with less focus on the infrastructure.

  2. The combination of legacy systems with new systems of engagement to create new digital business moments.

  3. Mobile has exploded creating a need to delve within devices and applications.

  4. Cloud (public and private) has created massive growth both in applications, languages, and complexity.

These key trends have caused APM to be increasingly critical and strategic for most organizations while IPM has become less relevant. In the Gartner research note the future prediction was that IPM would fold into APM; this shift has already begun. We’ve seen the likes of Blue Stripe acquired by Microsoft to fold into System Center at some future date. We’ve also seen the recent fire sale of assets from Boundary to BMC. 

At conception, Boundary had a unique proposition, collecting highly granular data from the host network perspective via SaaS. It made the product able to work in highly virtualized environments including public cloud. There were a lot of customers who combined the use of this new tool with APM to provide even more visibility into the application and infrastructure. I spoke with many of these clients and saw the value of what would later be coined IPM.

The demise of Boundary is that it created too much data, the second granularity was critical to what they believed, and they had to stream and store all of this data. That created challenges for Boundary to find the right business model that allowed it to charge accordingly. By the time, they had figured this out they begun to diverge into deeper server monitoring and event management, which are two segments well defined by legacy players in the space. The innovation had departed, along with it many of the talented engineers had left. Ultimately the last leader within the company Gary Read departed earlier this year during the selling process. Gary created and grew Nimsoft into a server monitoring powerhouse, selling to CA with a successful exit. Gary is an A player in this space, with his departure the hopes of success at Boundary had ended.

It’s very challenging for an on premise focused software company to learn how to operate and sell SaaS products. BMC presents itself with fragmented tools, where Boundary only operates SaaS, and the rest of the BMC monitoring portfolio only operates on premise. These products all have different data stores, user interfaces, and APIs making it even more challenging. I do wish them luck trying to fold in a SaaS only product with an entirely on premises and legacy monitoring portfolio. Let the fragmentation continue for BMC, makes it easy for us at AppDynamics to organically build, deliver, and see successes of our Unified Monitoring vision of APM down to the infrastructure.

Industry Insights: Forrester – Develop Infrastructure Metrics Using The Balanced Scorecard

Forrester recently published a great research note Develop Infrastructure Metrics Using The Balanced Scorecard by Richard Fichera, Sophia I. Vargas with Glenn O’Donnell, Vanessa Wegner. In this research, the Forrester team outlines how to measure I&O effectively. This often came up in my discussions with end users, but it was never laid out as clearly as in this note. The issues outlined in this research include:

  • I&O is often not entirely sure what it is doing (in terms of metrics) and why.

  • I&O commonly views metrics as an output in their own right.

  • I&O organizations often have too many metrics.

  • I&O often makes the mistake of focusing on technology rather than business metrics

These show a systemic issue, this is partially why dashboarding, and having as many as possible is normally the goal of many I&O professionals. I use this graphic to explain the problem with this approach:

The purpose of these screens and all of the email alerts are for visibility, but instead we just overload ourselves with non-relevant information. Forrester’s analysts have some great advice for us, “Start by defining objectives and then develop metrics to support your objectives” and

“Document metric targets and baselines”. 

Many of our more advanced customers at AppDynamics tie employee bonuses and compensation to these business impacting performance metrics. Forrester recommends this in the latest research “Tie compensation of staff members to metrics, and set initiatives for improvement”.

Finally, the most relevant recommendation made in this research is to “Aggregate metrics into a dashboard that uses language the business will understand.” This means measurements such as lost business transactions, lost customers, or other issues related to response time. Keeping away from technical metrics such as MTTR which lose the business audience are strongly echoed in this research note.

It’s time for IT Operations to align better with the business, by crafting and paying close attention to business metrics.

CIO Insights: AppDynamics driving and capturing India’s growth

AppDynamics was founded by Jyoti Bansal (CEO) and Bhaskar Sunkara (CTO), two talented and driven Indian technologists, born and educated in India. These two passionate individuals believe it’s critical to remain connected to their roots, and the universities that have educated them. Jyoti is involved with Indian Institute of Technology (IIT) in Delhi, one of the best universities in India for Computer Science. He spoke at the IIT Global Leadership Conference in late July in Santa Clara. Jyoti went on to work in real-time systems programming in environmental controls. This type of engineering helped him think about the challenges dealing with real-time visibility.

Bhaskar was employed with Pramati Technologies, and Indian technology company, he worked on the team responsible for the first commercially available implementation of J2EE. This work experience allowed him to get deep into the inner workings of Java middleware at a low level, allowing Pramati to pass the rigorous certification for J2EE.

Bhaskar and Jyoti met at Wily Technologies, where they applied low-level engineering skills required to solve real-time data collection and analysis problems. Wily Technologies was the creator of the modern  Java APM market. By re-thinking the challenges this dynamic duo faced at Wily they created a fundamentally different approach to the problem tackling new problems of scale and complexity in today’s software defined businesses. These were the founding tenants of AppDynamics

Jyoti and Bhaskar are both connected to their roots and homeland. AppDynamics has a substantial team already in India managing our clients and system integrator partners. We have recently begun ramping up our first engineering teams to complement our US based teams. It makes sense, but our thinking of team augmentation are quite different. We would like to augment and extend our teams locally. We also want to tap into the thriving and growing startup and enterprise ecosystem in India.

In a broader IT Operations context Gartner says: “Indian IT budget growth of 11.7% is one of the highest in the world (global average is 1%). Seventy-four percent of CIOs expect an increase in their IT budget.” (2015 CIO Agenda: An India Perspective, January 30th 2015, Partha Iyengar | Heminder Singh Ahluwalia). This presents a ripe market with expanding requirements.

Closer to home the Indian successes in Silicon Valley continue to gain momentum, indicating a large entrepreneurial vision in the USA. The catalyst was largely broader shifts in technology from primarily being hardware and data center centric to a software and cloud focused ecosystem. The result of this shift is the required capital to enter a market is much lower. Embracing this entrepreneurial spirit is a goal for Indian CIOs, Gartner states “the need for CIOs in India to move from a “command and control” management style to a mentoring and “visionary” management style is clearly recognized, with 61% and 72%, respectively, citing the need to decrease command and control and increase visionary management styles.”. This shift is occurring not only to allow more autonomous decision-making, but also to improve employee and user satisfaction. To accomplish this CIOs recognize the need to focus on service levels, far beyond the global averages. Indian CIOs rank service levels the number one metric used to measure IT performance. Monitoring and more specifically APM are critical technologies in enabling improved service levels, by focusing on the real user and their experiences.

AppDynamics will continue to invest in India and grow, as we ramp up our teams, and capture this wonderful opportunity for innovation, business expansion, and skills which are shared by our founders and fundamental beliefs in the company.