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Here we are down in Santa Clara and we've got a Redmont client, someone, obviously, you're

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not the only client, but the company you work for, the only person there, it's Groundwork.

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And we're going to talk about sort of, you have a release upcoming and then just kind

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of check in and see what's going on with you guys, would you like to introduce yourself?

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Yeah, I'm David Dennis, Senior Director of Product Marketing at Groundwork.

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The release really speaks to something that I think for us we finally really started

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to see happening in 2007.

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It's something that has been telegraphed for a long time, which is that open source system

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management products challenging the big four guys.

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And that's been telegraphed for a couple of years now.

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But at least for us, that was the year where we really started to see it happening and we

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started really not only moving into the real enterprise, but displacing actually OpenView.

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And we also started to get to the point where we started realizing, you know, well, why is

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this happening?

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Right.

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And one of the ways we started thinking about it, and this is sort of a, we don't necessarily

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always speak to it this way to our customers, but this is sort of the intellectual framework.

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It really has to do with, getting really, really old school here, what's called the theory

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of comparative advantage, which is a guy who was kind of the next guy after Adam Smith,

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an English economist back in 1815.

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So he was sort of, you know, he was sort of the guy who came after Adam Smith and these

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guys were basically kind of deconstructing the mercantilist world that they lived in.

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And so we all know about Adam Smith and the invisible hand.

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And Ricardo was trying to talk about things at a national level, and he talked about comparative

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advantage.

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And he was trying to address the question of, well, why don't you grow wine in England?

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You know, why should you import it?

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Why should you import it?

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Not just competitive advantage, it has to do with comparative advantage.

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And it brings up the concept of opportunity cost.

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So this is probably going to sound like, "What the hell does this have to do with IT?"

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But just bear with me for a moment.

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And it basically brings in an opportunity sauce.

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And the concept goes like this, which is that if you're, let's say, the best doctor in a

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given town, and you're also the best receptionist, you shouldn't be spending your time being the

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receptionist, not at least if you have no business.

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You should go for the higher paying thing.

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You should go for the high paying thing.

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When you look at kind of the, all the things that are involved with managing a data center

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right now, we think that the savvy IT executives we see are doing a comparative advantage assessment.

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What they're doing is they're looking at all the different kinds of things you have in

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a data center.

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So you've got your help desk, and you've got a CMDB, and you've got an asset tracking system,

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and then you've got event and monitoring kind of stuff like we do, et cetera, et cetera.

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And the ones who are savvy about it are looking at each one of those areas and going, okay,

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for those areas where there's a viable open source alternative, I should seriously look

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at that.

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Right.

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And for those that are not, leave them be, I don't have a lot of choice.

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Keep them in place, but if I bring the open source thing, it has to be able to talk and

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integrate with the proprietary stuff.

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So we're seeing this as a bit of a shift where, you know, for a while, this all seemed

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to be a little bit more ideological and wrapped up and, you know, as open source have the quality

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ready for the big time.

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And now it's kind of getting more pragmatic.

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And the really interesting thing that we see happening kind of at the big picture level

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is that the big four guys, particularly open view, have lost their comparative advantage

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in the area of monitoring.

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Right.

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And now Gartner, in fact, actually said that, basically.

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If you look at their magic quadrant for what they call ECA, which is Event and Correlation

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Analysis, which is their big term for the monitoring industry.

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Sure.

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They actually say within there, when they look specifically at open view, they basically

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say that, to paraphrase them, you know, these guys have now acquired things like Opsware and

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Mercury Interactive recently.

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They're moving up the stack.

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They have to spend a lot of time integrating these pieces into it.

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And in essence, they're losing ground.

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They're losing their comparative advantage to open source upstarts.

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And in fact, maybe, you know, and I'm sure OpenView wouldn't admit this, they may be strategically

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ceding that ground.

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The thinking there, your thinking being that they're purposely withdrawing from the monitoring

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or the ECA space because they see a higher opportunity in higher level things.

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Yeah.

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I mean, I'm sure they wouldn't put it in those terms themselves.

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But I think what they're doing is they're going, okay, let's say you're OpenView going,

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we've got OpenView Operations and Network Node Manager.

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It's out there.

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It's all over the place.

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They probably can't carve out much more market share for it than it already has.

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And then they have these new products that they can sell to people who don't have them yet,

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and they can potentially charge more money for them.

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I think they could look at it and go, okay, we're going to put our investment of resources

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and money into these new acquisitions, try to get people to move up to the stack, and we'll

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just hope that maybe the upstart competitors don't eat into us too much, into what used to

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be, to some extent, their foundation pieces of what kind of, you know, got them going in

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the first place.

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I'm not trying to slam them, I think it's probably a smart strategy on their part.

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If they're kind of going, okay, look, you know, we don't have infinite resources, and we've

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got these products that, you know, are, frankly, in some cases, pretty long in the tooth, you

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know, we're going to put our resources here, and if these other pieces get taken over by

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other people, as long as the customer is still able to integrate the whole, and as long as

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they're still in the picture someplace, they're probably reasonably okay with that.

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So what are the things that you're, like, groundworks that you guys find yourself integrating with

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in that respect?

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Sure.

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So, usually what's happening for us is that if somebody's, if we're going into a displacement,

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and a displacement can mean a lot of different things, but it usually means a specific non-usage

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of something like OpenView Operations or Network Node Manager.

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And it could be that they're looking at us versus one of those guys and not buying in the first

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place, or they've got some, and they're expanding their data center, and they're choosing to

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not buy more, or they're coming up for renewal on their maintenance, and they're going, ouch,

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and they're turning to us.

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So we'll end up typically replacing those equivalent pieces of OVO and NNM, but we'll remain in

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the data center, and whether it's an HP product or IBM or, you know, BMC, et cetera, for example,

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we'll end up integrating with, like, a Remedy ticketing system.

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Right, right.

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Or, there will be, what used to be Peregrine, the HP asset tracker.

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You'll have people do that, and they'll say, "Okay, I'm using that for my asset discovery."

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You know, that kind of stuff.

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And that means we end up making horizontal hooks.

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Right, it's the integration thing you were talking about.

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It's the integration thing we're talking about, yeah.

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An analogy that we use internally, and is basically, what our CEO likes to use, is the IT corral.

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But it kind of goes like this.

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So you've got your IT corral, and you've got this fence, right, and you're trying to keep

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the cows from breaking loose, right?

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And the segments between the fence posts kind of correspond to different areas within IT.

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So you've got your guys who are your support area.

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You've got your security chunk of the fence.

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You've got your stuff like we do, which is the monitoring and event management piece, et

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cetera, et cetera.

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You kind of go around, and you hit all of the major legs that you hit.

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You look at most places in the IT organization, if you kind of think about, well, to have a fence

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work that the barbed wire has to go all the way across the top all the way around.

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Right?

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The reality is, if you were going to look at most like here, they've got some fence posts

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that are like this, and then some that are like this, and some that may be just completely

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empty.

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Right, right.

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You know, allowing wolves to get into the cows and the cows to get out.

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And by doing what we're talking about, which is going, okay, you know what?

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The whole corral concept breaks down if I'm not having, you know, relatively good levels

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of investment in each part of the fence.

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That's all, if you do something we're talking about, leverage the comparative advantage,

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it will free up the resources to fill in the parts of the fence that you're probably not

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investing in.

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It's a good sort of unique story, you know, among the sort of big four, not, you know,

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whatever, the newcomers or whatever.

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It's because usually it's more of a taking out or a displacing sort of thing, but this

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is a more virtuous, everyone wins sort of view on things.

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Because, you know, people can focus on the high comparative advantage and then the buyer

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people get everything.

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Yeah, I mean, I think we would be honest about it.

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I don't think there's any open source contender right now who can take on the giant umbrella

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of functionalities that the big four have.

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Yeah.

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And, in fact, even if you look at specific areas, you could even say that there aren't

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viable open source alternatives to specific areas.

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Like, in my opinion, I don't think there's a great open source alternative to remedy yet.

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Right.

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If you're using guys who have given enough time, they could probably get there.

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But we're not running into a lot of people who are saying, well, we're using this, you

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know, as an alternative.

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On the other hand, if you look at the edge of the network, it's the other way around.

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Yeah.

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You know, JBoss and Apache are all over the place.

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Right.

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So, I think it's probably, you know, a bit of either hubris or just, you know, insane

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zealotry if open source guys at this point in time say, we're going to take on the

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whole enchilada.

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Right.

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We're going to take them on every single front.

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We're going to battle them everywhere.

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You know, we're going to, we're going to, you know, drag them into the mud and everything

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like that.

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And you know what?

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Customers don't even want that.

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They want you to solve the problem that they have right now.

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Yeah, sure, sure.