The IT Management business is a weird one. On the one hand, you have people milking decade long portfolios, augmenting, and growing those “suites” with new acquisitions and shoring up margins with cheap offshore development and support. On the other hand, you have new entrants (mostly open source or open source based, but not always) taking advantage of the cheap means of production for monitoring and even automation software. And then there’s the weird-birds like Nagios who seem not to care about cashing in on wild success and Spiceworks who do it all for free with ads+. This is the “Little 4″ vs. “Big 4″ framing.
Back in 2007 Hyperic’s CEO Javier Soltero commented on his frustration at being jammed in that story line in what he and I joke about as the “^H^H^H post” (the title of which has since been “fixed” to chop out that nerd humor):
Some companies, however, have been latching onto this idea and using it to mint their position in the market. They created a wikipedia entry on it even! They love the idea of being the “little 4.” I’m running out of ways to count the number of times companies claim an intent to “take on the big four enterprise management Goliaths—IBM/Tivoli, CA, Hewlett-Packard and BMC Software—by providing 80 percent of the functionality for 20 percent of the cost.”
Frankly, this is reflective of the lazy, losing proposition of setting low expectations, a common affliction for some open source vendors. Who wants to use a watered-down, cheap alternative to the real deal? And who says that the real deal is the big 4? Is it their market penetration? The billions of dollars spent every year milking support contracts for shelfware or software and services that never delivered? Sure, that’s success for them, but their users will tell a different story.
(If you’re thinking about checking your Twitter by now, you’ll get why I wryly call the kind of software I’m enamored of “boring.”)
Talking with Javier and SpringSource’s Rod Johnson this afternoon, lifting out of that Big 4 vs. Little 4 story line seems to be “what’s in it for Hyperic” with SpringSource acquiring Hyperic. While they started out as a “general IT Management platform,” Hyperic of late has specialized in three more narrow areas:
- (Java) application stacks
- monitoring virtualization and virtualized applications
- whatever cloud monitoring and management is and can be at the moment
All of the once “Little 4″ (of which, there are now just two) started out on the same go-to-market plan: providing open source based monitoring to mid-sized businesses. They dubiously denied that they wanted to compete against The Enterprise early on – one might theorize to snaggle under the radar of the Big 4 or buy time to develop enough quality and scalability to go against them – but two of them, GroundWork and Zenoss, are much more aggressive about being “enterprise” now. Little wonder: there’s more cash in the enterprise hills, esp. if you’re open source based. The closed source vendors, like Solarwinds, tend to dominate the small to mid-market where best-of-breed functionality plus low prices means a lot more than whatever type of source you have.
In that transition from “little” to “enterprise,” Hyperic has always been a reluctant player. In the past 6-12 months, they’ve spent most of their external marketing time talking about the cloud (where there’s not currently much IT Management money, which a revenue hungry startup would be lusting for), and they were always a lot more West Coast feeling than I expect from “boring” IT Management vendors. (GroundWork of course, offices in the same part of town as Twitter, but they’re feel is definitely more traditional IT Management.)
Regardless, the SpringSource/Hyperic combination creates a clear and present danger to IBM and Microsoft, two companies that have largely stood alone in the ability to build, run, and manage applications. It’s also a significant boon to companies looking to open source to save money and improve productivity. –Matt Asay
There are other advantages for Hyperic here, though not quiet as clearly anything that would motivate you to get gobbled up: namely, bridging the treacherous instrumentation gap. In theory, if you have developers and operations under the same roof, you can finally get the developers to write their code so it’s easily monitored and managed. No one has really ever succeeded at this, and people often site that Windmill as one of Motive’s downfalls. It’s looking like cloud development (or SaaS development, as we used to more precisely call it) requires a closer alignment of developer and sys admin, hopefully in the same meat-sack. Speaking of meat, the Reductive Labs guys tend to be the best ops-philopsophers on this count.
Those are certainly good theoretical futures, even ones that I’d bet on and have advised clients to pay attention to. But, for Hyperic, it seems like the desire to be gobbled up by SpringSource was more of an identity transformation. From what Javier told me today, it seems like they would rather be in the (more general) corporate IT side of the house than the (more narrow) operations side. As I explained in this week’s IT Management & Cloud podcast, This is where the comparisons to Microsoft, IBM, and, depending on how the snorkle comes out, Oracle comes from. Those shops are “one stop shops” for IT: not just operations, but developers creating the in-house applications that companies their businesses with as well.
Java, SpringSource, and The One-Stop-Shop Theory
Looking at it from the SpringSource angle, that’s exactly the space SpringSource has been wedging itself in of late. Ever since Rod threw his glove at J2EE’s face, he and SpringSource have been trying to save Java from itself. Clearly, SpringSource has a deep devotion to Java. Sure, they have a tough-love devotion, but they ain’t no rails. From this you can see that SpringSource’s market is squarely that massive, slow beast we call Java which means, pretty much, enterprise development. As SpringSource’s Charlie Purdom put it this afternoon, there’s some question of who’s going to carry the Java flag now and “selfishly speaking, we like to think it’s going to be us.”
No doubt, Hyperic will still service the general IT monitoring and management business, esp. for their existing customers. But, their focus from what Javier and Rod told me, seems like it’ll be up-leveled to servicing corporate development with the newly added ability to do monitoring and management as a first class citizen, not just the usual bolted onto stuff you expect from development framework vendors.
It’ll Need More
Still on the topic of Hyperic’s monitoring-only capabilities, it means that if Rod Johnson really wants to provide everything for Java developers to put “applications into production without the mediation of operations”, as he says, then he should keep his checkbook open (as a side note, if a developer puts “applications into production” then s/he doesn’t bypass operations but rather becomes operations; you may not think of yourself as one, but if you’re the one who gets called when the application crashes then you are in “operations”). SpringSource is still a long way from offering the complete picture. Here are my guesses for the management features on Rod’s grocery list:
- configuration management – many potential acquisition candidates
- in depth database management (going beyond the “you want metrics? we’ve got metrics!” approach to DB management) – fewer candidates [though William is "obviously biased" ;>]
Indeed, I asked about configuration management automation. Companies, even clients, never comment on future acquisitions.
Testing the Happy Path
Now then, how can you test that all this happy-path talk is real? Check-in in a year or so and see if Javier and team are still there or if they pull a MySQL and vacate. It’s pretty simple, you just have to wait.
The Cynical Path
You might call a bit of revisionist history on the above, of course. Competitors of both Hyperic and SpringSource had their own wry takes, most notably over at Nimsoft who called weak sauce on Hyperic and that whacky open-core model. In another competitor’s take, acting as the sort of Tarus for the Java middle-ware segment (which should be understood as a compliment), Sanjiva wrote up a well done “the right honorable gentleman” note on what’s in it for SpringSource.
Sanjiva hits, as Tarus would, on the most important point for both SpringSource and Hyperic. As I like to put it: the way you make money with open source is to sell closed source. Hyperic, like it’s open source IT Management 2.0 peers does exactly this. SpringSource has been grafting closed source offerings onto its portfolio, focusing on configuration, management, and other aspects (making good on their last transformative acquisition, Covalent) that usually don’t fit in the bucket of “developer.”
Whether you think there’s some scam going on there by claiming to be an open source company is a whole ‘nuther discussion – in which I try to remain detached in my professional role as a watcher instead of a doer. Each of these companies has to make cash, and a good amount of it to “pay back” their investors. That said, as I think the open source IT Management vendors have found – if their reports of “record quarters” are to be believed – their customers don’t care that much either. Charging for software that developers use is extremely difficult today, but the operations people will still gladly whip out the check book. They still expect to have to pay for their software.
“You Can Have It, Dear Sir!”
Indeed, as Nimsoft’s Gary Read put it “Monitoring/systems management is NOT sexy – it is hard work.” To pull from the SpringSource side of the house, that makes this into the classic Java vs. rails debate:
Java: developing software is difficult and requires hard work.
rails: no it doesn’t.
Java: yes it does.
rails: why do you keep hitting yourself?
Java: stop that!
You could also point out that Hyperic has been at it for around five years now (by Javier’s count). That’s a hard-slog to make, and maybe it was time to transform into something else. I’d wager that Hyperic’s motivation is somewhere between that “hard work” and the desire to be more than just a generic IT management vendor.
Disclosure: Hyperic, SpringSource, Zenoss, Microsoft, IBM, GroundWork, SolarWinds, and Spiceworks are clients. Also, it should be noted, that Javier was egging me on to write-up a “what’s in it for Hyperic” note, that said, others have egged me on as well.