ManageEngine adds SaaS

Today ManageEngine announcedit’s “On-Demand” offering (in beta) where it’s started to provide IT management functions as a service over the Internet, or, a SaaS if you prefer. The feature set is limited to AD, event log monitoring, SQL Server, Printers, routers, switches, and basic URL monitoring (more details). Also, it’s purely monitoring (for now?), there’s no “management” or “doing things to fix problems detected.”

It’s Pretty Cheap^H^H^H^H^HAffordable

This is hardly a complete offering, but word from them is that eventually the entire breadth of ManageEngine’s functionality will be offered “On-Demand.” More dramatic is the pricing: $5/node/month. That pricing may change after the 30 day trial currently in effect (hence, no need to charge anyone for at least 30 days), but it’s a good indication of how cheap MangeEngine wants to keep things. That’s very “affordable,” as my wife always reminds me I should say.

As/if ManageEngine adds in more functionality from it’s on-premise portfolio, you can expect at least additions to the pricing. You can’t, for example, really price a help desk “per node.”

What should I Do?

At this point, ManageEngine On-demand isn’t fully functional enough to warrant switching over whole-sale from on-premise IT management platforms. If the limited feature set fits all of what you want, go for it! On the other hand, it’s worth checking out and testing. The (potential) price is too enticing. Coupled with the price is the option to run your IT management platform in the cloud, hopefully simplifying your life by having less on-premise software to run. That assumption should be tested too. Why not wire-up to monitor your massive Active Directory instance(s)? Do some event log monitoring?

Competing vendors should seek out answers to these basic “will it blend?” (that is, work) question as well. As with Zoho (see more below), the key threat here is price. My last published pricing “survey” in this space is pretty dated (from 2007), but $5/node/month is mega cheap ($60/year). Even if the software is junk, when/if ManageEngine adds in it’s full breadth, you’ll have to answer to people drinking from a ManageEngine mug.

Who’s ManageEngine

I’ve drilled down on the pricing angle because of who ManageEngine is. For parent company AdventNet, “affordably” is a feature, if not a corporate philosophy. ManageEngine is one of the product lines in AdventNet, it’s sister product line being the popular SalesForce and Office competitor, ZoHo. As you peel back the layers of ManageEngine, you realize that the go-to-market strategy is exactly that of ZoHo: do the same thing as incumbent competitors, cheaper.

Previous to now, ManageEngine’s offerings were on-premise only. IT departments would have to install the entire stack behind the firewall, paying a license fee. Still, ManageEngine told me back in December that they had over 27,000 customers (a more recent number pegs it at 35,000+). Those numbers could have been a little wonked out if they pulled in AdventNet’s previous business in the telco space folks who monitor one URL, etc., but even if you take 1/8 of that figure (about 3,300), it’s pretty high. [See Girish’s comment below.]

The announcement today is ManageEngine’s first step towards moving all of it’s on-premise functionality in a SaaS model. If you’d like to stick on some buzz, you might even say they’re moving ManageEngine “into the cloud.” They’ll still, of course, offering on-premise installs.

Many men have tried…

The leap to providing IT Management as a SaaS is one that few companies make and fewer seem to have found enough success in the keep around. Indeed, before joining RedMonk I was part of the group at BMC that offered IT management (really, just monitoring with a thin smattering of management) as a SaaS, “PATROL Express” it was called. While PATROL Express instances are still around, BMC offloaded it to another partner last I heard and, really, wasn’t interested in it. Instead, they took the software assets and people, mashed them together with the “classic” PATROL assets and people, and offered the result as an on-premise IT management platform called “BMC Performance Manager.”

A startup called Klir tried to sell an IT management as a SaaS offering, but their VCs shut them down before they had much of a chance to try it out wide-scale. FiveRuns started down this path, but then went off the rails (hey-o!). There’s also Paglo who’s just now starting out as an IT Management SaaS, using search to boot-strap itself into the cloud, as it were (they boast $1/node). Service-now.com seems most promising – and perhaps the most direct competitor to ManageEngine On-Demand. And kicking around up in Canadia there’s long running Versiera.

There are others, I’m sure, that I’m leaving out.

Still, the category of IT Management SaaS has been a troubled land-scape. Scaling is a problem, as is security, and good luck integrating with existing, on-premise higher level IT management stacks like service desks, CMDBs, and anything that flies under the banner of “BSM.” (Maybe more offerings along the lines of VPN Cubed will help eventually.) Worse is the problem of vendors cannibalizing their (often higher) on-premise IT management revenues.

Pulling back to that 27,000 customer install, there’s potential for revenue cannibalization and all of the same problems exist for ManageEngine On-Demand. ManageEngine also doesn’t have much in the way of an open source angle here. More than mattering for direct sales, as open source IT management companies have shown, a thriving open source community around your IT management platform means a higher chance that your platform can handle any whacky thing that comes along. That is, the open source community might write code that you, the commercial company, would fine unprofitable to write yourself.

Still, and clearly, I’m personally a fan of the IT Management SaaS approach. Hopefully it’ll take this time.

If you dig this kind of thing, keep an eye out for this week’s IT Management & Cloud Podcast. I’m sure we’ll go over it.