StormFront - Observations on the State of the Market

July 8, 2008

Challenging Financial Markets Signal New Network Focus

I was recently asked by a group of financial analysts for our perspective on the current business climate, given the soaring worldwide oil prices, the banking crises in the U.S. and U.K, and the general malaise of the financial markets virtually everywhere. While we do see some changes in decision and procurement behavior, I'm pleased to report that overall, business has not (yet) been affected. We’re also seeing interest shift to different aspects of the EYE suite, reflecting changing business priorities.

The Current Climate Drives a Focus on Cost (and Cost Savings)

The first change I’ve seen in our engagements with soon-to-be customers is an escalation of the purchasing decision – where an IT director used to have the spending authority to make a decision, now that same decision must be made one or two levels higher. The result is that more financial business value must be demonstrated by the company and product. This requirement is well-served by the new dashboard and reporting solutions we’ve developed in the last year, and will continue to develop. Reports demonstrating service level delivery and infrastructure status must be attractive and informative for non-networking experts, such as senior level management. The Network Summary Report and Capacity Planning Heat Map reports are two of our more popular.

I’m also noticing a renewed focus on usability of the technology. Since staff costs can be an order of magnitude larger in the budget than the software (and maintenance) itself, the ease of installation and configuration, ongoing usability, and level of automation is receiving more attention than previously. This is where EYE has always had an advantage over the large, cumbersome frameworks, where our faster time to value and lower TCO has been repeatedly proven.

The Current Climate Changes Primary Use of the Product

Users are also now shifting their attention to the inventory and utilization side of the product. As a management suite providing fault, performance, and inventory management (not just one or two of them), EYE has always provided different value to different users, and at different times. When bandwidth was very expensive back in the late 90’s, the performance side of EYE was the most popular. When bandwidth became cheap, performance took a back seat to fault and event management. When networks got ‘stable enough’, the focus turned to CMDB initiatives, whether tied to ITIL or not, and EYE’s deep, detailed inventory took the fore for users.

Now we’re seeing a different interest for EYE’s inventory, more geared to cost savings. EYE’s continual, automated, re-discovery of the network means that the EYE inventory is the most up-to-date, accurate record of the network. Customers have used this in at least two ways in the last few months to make significant savings: one customers saved $750,000 in network equipment purchases, simply by running EYE’s Spare Ports Report, and discovering that there were a huge number of unused ports, and that they didn’t need to make the large purchase they had planned. Another customer saved €30,000 annually when they ran a network inventory report and discovered that the network hardware maintenance contract that was up for renewal contained dozens of devices that had been decommissioned over a year ago! Even more alarming was that two key routers were NOT on maintenance.

I’d also expect to see the performance management of the product receive renewed interest, with users implementing (a reduced set of) new IT application initiatives but trying to do so on existing equipment, squeezing the most out of it. Monitoring performance thresholds, flow-based usage, and overall capacity will be key determinant going forward.

Agree? Disagree? Send me your thoughts - I’d love to hear them.

Michael Jannery
President and CEO, Entuity
michael.jannery@entuity.com