Management Software Sleeping Giants Awaken

Many industry watchers, including me and my Forrester Research colleagues, often highlight an elite group of management software megavendors commonly known as the “Big Four” that consists of BMC Software, CA Technologies (as it is now called), HP Software, and IBM Tivoli. These four have dominated the management software business for well over a decade. They are big by just about any measure, each with a broad array of product families and annual revenues exceeding one billion US dollars. Because of their stature, they are generally positioned as anchors in most enterprises' management software portfolios. An anchor vendor becomes a strategic partner to the enterprise and is usually the default first choice for a particular need.

In a single week, two technology titans, Microsoft and Oracle, made sweeping product launches that clearly threaten this quartet’s oligopoly. Both had longstanding management software businesses, but their scope and impact on the overall market never quite broke into the big time. I view the new expansions to Microsoft’s Systems Center family and Oracle’s Enterprise Manager family as bold declarations of each company’s invigorated aspirations to be major players in management software. Most importantly, these events mark a turning point in the overall market toward the more ambitious and more lucrative quest for the automation systems needed to enable cloud computing. Indeed all are now pushing hard toward this cloud enablement vision.

Microsoft:

I attended Microsoft’s annual Microsoft Management Summit conference, where the company launched new, vastly improved versions of its System Center Operations Manager (SCOM) and System Center Configuration Manager (SCCM) products, once known respectively as Microsoft Operations Manager (MOM) and Systems Management Server (SMS). The former incarnations had limited, even lackluster capability. SCOM and SCCM are very different animals that are scalable, feature-rich, and (dare I say it?) highly competitive.

In addition to these two new versions of existing products, Microsoft also officially announced the long awaited and ballyhooed System Center Service Manager (SCSM), its service desk package. Existing service desk leaders are arguably superior to this initial SCSM version’s integration and general features, but I expect SCSM to become a major force in this market. As a linchpin to the broader Microsoft strategy, SCSM will be important. This version is not flashy and it is undoubtedly late to the game, but I found the underlying technology actually quite innovative. At its core is a robust modeling architecture that lends itself very well to the flexibility and integration demands that will be faced in the new world of cloud automation. This foundation will prove a formidable weapon against existing management software architectures, many of which are rooted in technology platforms over a decade old.

Several other expansions announced at MMS also struck me as important. The most interesting are driving automation of cloud services, both those built internal to the enterprise (what many call Private Cloud – I  prefer Internal Cloud – they should ALL be private) and Microsoft’s Azure service. Its recent acquisition of Opalis shows potential throughout a slew of the Microsoft automation products. The migration away from the Microsoft-only dogma is also now evident. Many of the System Center tools now have at least the option to include other platforms, most notably Linux. These particular extensions are largely via partners, but I assure you, the move is notable.

Oracle:

A few days before MMS, Oracle held a gala launch event in New York at the Guggenheim Museum, with my friend and Forrester colleague JP Garbani delivering the keynote. The fanfare was bold, as if to trumpet a groundbreaking release that will change the industry. The new Oracle Enterprise Manager (OEM) 11g is indeed a bold step forward, clearly the biggest announcement in the family’s history. It is definitely a big release for Oracle. Whether it proves to be groundbreaking remains to be seen through execution, but the potential is there for Oracle to cause major ripples in the management software business.

What I find so compelling about OEM 11g is a much more complete management stack, with a lot of new process automation and application-oriented elements. It also is the first inclusion of some management technology from the Sun acquisition. Sun actually had some decent tools, but they were largely ignored under the previous administration. I’m glad that Ellison’s OEM team appears to finally be taking a different tack.

Every management vendor liberally spouts its “business” focus to its software. Although most have some level of reality, they miss the target. Oracle can truly get you business process visibility, albeit for Oracle applications. These applications are quite popular, so this linkage alone makes Oracle more attractive. Microsoft is getting close for Microsoft business applications, but other business software providers such as SAP still rely on partners like the Big Four to give you that full perspective. I am confident this business layer is one of the next big battlegrounds in management software.

Common threads to both:

What both companies offer that most other vendors do not is a potent set of capabilities around applications. For applications built upon the Microsoft platform, Redmond’s favorite employer can offer many of the parts needed for cradle-to-grave application lifecycle management, including IDE, testing, release management, and infrastructure automation. Oracle has similar power around Java applications and the various Oracle business applications.

Both Microsoft and Oracle need to more truly compete in the full realm of anchor vendor, but they are close, very close. Others can beat them on the pure infrastructure play, but incumbents will find it difficult to lock horns at the application level. This is the real threat to the existing Big Four. As the market moves toward application-centric cloud services, Microsoft and Oracle will enjoy an advantage over infrastructure-centric players.

One thing is quite clear from all of this: Microsoft and Oracle will capture much larger slices of the overall management and automation market. The Big Four is about to become an irrelevant moniker.

We want to hear from YOU!

How do you see this playing out? I welcome dialogue and some healthy debate on how Microsoft and Oracle will alter the market landscape. Who else do you feel is on its way to the elite class? Will there be a Big Six or will other dynamics (e.g., acquisition of BMC or CA) vault another behemoth into this market? I hope these discussions will lead us to some enlightening new patterns that we can all use to guide our decisions.

Comments

Very nice

Thanks for the very nice post. As someone who came from HP (OpenView/BTO) to Oracle 3 years ago specifically to work on application management I am very encouraged by how Enterprise Manager is growing and the validation that you provide here.

William
@vambenepe
http://stage.vambenepe.com/

Surprised you did not include

Surprised you did not include Compuware. They are deifinitely in the mix here. Some would say they have bigger play than BMC and CA.

Re: Surprised you did not include

Compuware is certainly a large and formidable player with many great products (especially in application performance management). I currently place it in the list of "anchorettes" which is a class of vendor that is encroaching on the Big Four. Microsoft and Oracle were also anchorettes, and still are, but they are the two that now pose the strongest threat to enter into anchor class. Compuware can certainly pull it off, but the Big Four clearly have the lion's share of market penetration and "stickiness" among the Global 2000 enterprises.

Obviously there will be a Big Six list if its not already...

I call them The Big 4++, because Microsoft already become a BIG management vendor years ago, now Oracle and i believe that EMC are already taking big slices from the management and automation market and I think we will see more acquisitions from them soon, I noticed that there are ISV's who are silently growing towards these markets and doing what we have seen in cases such as Iconclude>Opsware>HP...

Gabby
Runbook Automation Blog

What About Symantec?

As the 4th largest software company in the world with a management portfolio, from the Altiris acquisition, that is second only to Microsoft, how did you miss them?

Inventory Management Software

I appreciate your post, thanks for sharing the post, i would like to hear more about this in future