Here we are down in Santa Clara and we've got a Redmont client, someone, obviously, you're not the only client, but the company you work for, the only person there, it's Groundwork. And we're going to talk about sort of, you have a release upcoming and then just kind of check in and see what's going on with you guys, would you like to introduce yourself? Yeah, I'm David Dennis, Senior Director of Product Marketing at Groundwork. The release really speaks to something that I think for us we finally really started to see happening in 2007. It's something that has been telegraphed for a long time, which is that open source system management products challenging the big four guys. And that's been telegraphed for a couple of years now. But at least for us, that was the year where we really started to see it happening and we started really not only moving into the real enterprise, but displacing actually OpenView. And we also started to get to the point where we started realizing, you know, well, why is this happening? Right. And one of the ways we started thinking about it, and this is sort of a, we don't necessarily always speak to it this way to our customers, but this is sort of the intellectual framework. It really has to do with, getting really, really old school here, what's called the theory of comparative advantage, which is a guy who was kind of the next guy after Adam Smith, an English economist back in 1815. So he was sort of, you know, he was sort of the guy who came after Adam Smith and these guys were basically kind of deconstructing the mercantilist world that they lived in. And so we all know about Adam Smith and the invisible hand. And Ricardo was trying to talk about things at a national level, and he talked about comparative advantage. And he was trying to address the question of, well, why don't you grow wine in England? You know, why should you import it? Why should you import it? Not just competitive advantage, it has to do with comparative advantage. And it brings up the concept of opportunity cost.
2:01So this is probably going to sound like, "What the hell does this have to do with IT?" But just bear with me for a moment. And it basically brings in an opportunity sauce. And the concept goes like this, which is that if you're, let's say, the best doctor in a given town, and you're also the best receptionist, you shouldn't be spending your time being the receptionist, not at least if you have no business. You should go for the higher paying thing. You should go for the high paying thing. When you look at kind of the, all the things that are involved with managing a data center right now, we think that the savvy IT executives we see are doing a comparative advantage assessment. What they're doing is they're looking at all the different kinds of things you have in a data center. So you've got your help desk, and you've got a CMDB, and you've got an asset tracking system, and then you've got event and monitoring kind of stuff like we do, et cetera, et cetera. And the ones who are savvy about it are looking at each one of those areas and going, okay, for those areas where there's a viable open source alternative, I should seriously look at that. Right. And for those that are not, leave them be, I don't have a lot of choice. Keep them in place, but if I bring the open source thing, it has to be able to talk and integrate with the proprietary stuff. So we're seeing this as a bit of a shift where, you know, for a while, this all seemed to be a little bit more ideological and wrapped up and, you know, as open source have the quality ready for the big time. And now it's kind of getting more pragmatic. And the really interesting thing that we see happening kind of at the big picture level is that the big four guys, particularly open view, have lost their comparative advantage in the area of monitoring. Right. And now Gartner, in fact, actually said that, basically. If you look at their magic quadrant for what they call ECA, which is Event and Correlation Analysis, which is their big term for the monitoring industry. Sure. They actually say within there, when they look specifically at open view, they basically say that, to paraphrase them, you know, these guys have now acquired things like Opsware and
4:03Mercury Interactive recently. They're moving up the stack. They have to spend a lot of time integrating these pieces into it. And in essence, they're losing ground. They're losing their comparative advantage to open source upstarts. And in fact, maybe, you know, and I'm sure OpenView wouldn't admit this, they may be strategically ceding that ground. The thinking there, your thinking being that they're purposely withdrawing from the monitoring or the ECA space because they see a higher opportunity in higher level things. Yeah. I mean, I'm sure they wouldn't put it in those terms themselves. But I think what they're doing is they're going, okay, let's say you're OpenView going, we've got OpenView Operations and Network Node Manager. It's out there. It's all over the place. They probably can't carve out much more market share for it than it already has. And then they have these new products that they can sell to people who don't have them yet, and they can potentially charge more money for them. I think they could look at it and go, okay, we're going to put our investment of resources and money into these new acquisitions, try to get people to move up to the stack, and we'll just hope that maybe the upstart competitors don't eat into us too much, into what used to be, to some extent, their foundation pieces of what kind of, you know, got them going in the first place. I'm not trying to slam them, I think it's probably a smart strategy on their part. If they're kind of going, okay, look, you know, we don't have infinite resources, and we've got these products that, you know, are, frankly, in some cases, pretty long in the tooth, you know, we're going to put our resources here, and if these other pieces get taken over by other people, as long as the customer is still able to integrate the whole, and as long as they're still in the picture someplace, they're probably reasonably okay with that. So what are the things that you're, like, groundworks that you guys find yourself integrating with in that respect? Sure. So, usually what's happening for us is that if somebody's, if we're going into a displacement, and a displacement can mean a lot of different things, but it usually means a specific non-usage of something like OpenView Operations or Network Node Manager. And it could be that they're looking at us versus one of those guys and not buying in the first
6:07place, or they've got some, and they're expanding their data center, and they're choosing to not buy more, or they're coming up for renewal on their maintenance, and they're going, ouch, and they're turning to us. So we'll end up typically replacing those equivalent pieces of OVO and NNM, but we'll remain in the data center, and whether it's an HP product or IBM or, you know, BMC, et cetera, for example, we'll end up integrating with, like, a Remedy ticketing system. Right, right. Or, there will be, what used to be Peregrine, the HP asset tracker. You'll have people do that, and they'll say, "Okay, I'm using that for my asset discovery." You know, that kind of stuff. And that means we end up making horizontal hooks. Right, it's the integration thing you were talking about. It's the integration thing we're talking about, yeah. An analogy that we use internally, and is basically, what our CEO likes to use, is the IT corral. But it kind of goes like this. So you've got your IT corral, and you've got this fence, right, and you're trying to keep the cows from breaking loose, right? And the segments between the fence posts kind of correspond to different areas within IT. So you've got your guys who are your support area. You've got your security chunk of the fence. You've got your stuff like we do, which is the monitoring and event management piece, et cetera, et cetera. You kind of go around, and you hit all of the major legs that you hit. You look at most places in the IT organization, if you kind of think about, well, to have a fence work that the barbed wire has to go all the way across the top all the way around. Right? The reality is, if you were going to look at most like here, they've got some fence posts that are like this, and then some that are like this, and some that may be just completely empty. Right, right. You know, allowing wolves to get into the cows and the cows to get out. And by doing what we're talking about, which is going, okay, you know what? The whole corral concept breaks down if I'm not having, you know, relatively good levels of investment in each part of the fence. That's all, if you do something we're talking about, leverage the comparative advantage, it will free up the resources to fill in the parts of the fence that you're probably not
8:08investing in. It's a good sort of unique story, you know, among the sort of big four, not, you know, whatever, the newcomers or whatever. It's because usually it's more of a taking out or a displacing sort of thing, but this is a more virtuous, everyone wins sort of view on things. Because, you know, people can focus on the high comparative advantage and then the buyer people get everything. Yeah, I mean, I think we would be honest about it. I don't think there's any open source contender right now who can take on the giant umbrella of functionalities that the big four have. Yeah. And, in fact, even if you look at specific areas, you could even say that there aren't viable open source alternatives to specific areas. Like, in my opinion, I don't think there's a great open source alternative to remedy yet. Right. If you're using guys who have given enough time, they could probably get there. But we're not running into a lot of people who are saying, well, we're using this, you know, as an alternative. On the other hand, if you look at the edge of the network, it's the other way around. Yeah. You know, JBoss and Apache are all over the place. Right. So, I think it's probably, you know, a bit of either hubris or just, you know, insane zealotry if open source guys at this point in time say, we're going to take on the whole enchilada. Right. We're going to take them on every single front. We're going to battle them everywhere. You know, we're going to, we're going to, you know, drag them into the mud and everything like that. And you know what? Customers don't even want that. They want you to solve the problem that they have right now. Yeah, sure, sure.