Mercury Interactive touts testing

AS THE CEO of Mercury Interactive, Amnon Landan has been extolling the value of testing for years. And in the current economy, tolerance for IT application failures is at an all-time low because businesses expect immediate results. In an interview with InfoWorld Editor in Chief Michael Vizard and Test Center Director Steve Gillmor, Landan talks about why application performance testing as a managed service is an emerging trend in the enterprise.

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InfoWorld: How are things going at Mercury Interactive these days, given the current state of the economy and the reduced number of IT projects being funded?

Landan: We are a stealth company and probably the most unrecognized $400 million software company around. We are one of the few companies that actually grew and made money last year in the high-tech universe. Two-and-a-half years ago, we started a new business in the area of application performance management with a unique angle of [managing] business processes rather than [managing] the infrastructure components. In a very short time, this grew to be 20 percent of our business. Now we get 20 percent of the business from our application performance management business. Most of the testing people do with our solutions is validation of business processes and scalability. It has less to do with the underlying technology and more [to do] with the usage and business processes that are implemented within a specific application. This value proposition is extremely attractive in this [current economic] environment. When money [is] not an issue, you don't test. In effect, your development process is very costly because you don't test and [the application] goes through numerous iterations. You overload on infrastructure. Now, with a real budget crunch, our value proposition is to minimize the cost of deploying new applications, minimize the cost of running existing applications, and better align what IT is doing with the business [needs].

InfoWorld: How does this service work?

Landan: First, we measure the performance of business processes from an end-user or business process standpoint. We will constantly monitor and measure the performance of key business processes. We will alert your operational staff when there is a problem. We will help you set, manage, and enforce service-level agreements. We help you with the root cause of problems so we can minimize the time [needed] to fix [them].

InfoWorld: What's your take on Web services and its effect on application development?

Landan: Right now, my opinion of Web services is that it's a lot of hype, very little substance, and the adoption rate is questionable. I would love to see this be successful because it's really good for us, but I'm realistic here. I think one of the biggest obstacles is not technological, but rather the mundane issues -- Can we trust it? Can we trust that it will work and can I bet my business on it? The promise of [Web services] is one that I would subscribe to, but like any other technology wave, [it] brings with it some challenges.

InfoWorld: Will you expand your testing service into the security arena?

Landan: We are looking right now into some interesting small companies in this space. Even in security, the concept that we are looking outside-in, from the application down, rather than from the infrastructure up is just much more pragmatic.

InfoWorld: So, with this service are you competing directly with Computer Associates, Hewlett-Packard, and IBM/Tivoli?

Landan: I had expected them to be ... competing against us in our APM business by now. I'm very happy that that's not the case. Part of the reason for [that] is there is a real paradigm shift happening and we caught them off guard. Historically, systems and network management was done [with] this silo approach, so you have the network management, system management, [and] database management. Everything they do is [from the] infrastructure up. Their basic concept is: Let's try to instrument everything and collect it in those big consoles. And we know all the horror stories [that resulted]. In the client/server days, there was a pretty good correlation between the infrastructure and the application. As systems and infrastructures became much more complex, [that correlation] is almost impossible to understand.

InfoWorld: So if we can't understand it, what's the value of the infrastructure?

Landan: I would say we have probably as good an understanding [as possible] of what's really happing in IT organizations, and what we've learned is that in principal, IT is broken -- I mean it's really broken. I think half the infrastructure currently deployed in corporate IT is useless and can be taken away. And when you look today at the fact that IT spending is over 50 percent of overall capital spending in corporate America, it's an amazing number. Corporate IT organizations have overbuilt on technology for the last 10 years. If you look at what they went through, how much they bought, and what they get from it, it's pitiful.

InfoWorld: So what will happen next?

Landan: Throughout this process, the vendors were calling the shots. So now you see a backlash and an emphasis on getting value from what you have. So you see a trend toward vendor and application consolidation. Corporate IT budgets are not unlike the U.S. [federal] budget. The budget can be trillions of dollars, but 80 percent to 90 percent goes for entitlements such as Social Security, Medicare, Medicaid. You have the same picture in corporate IT, where 80 percent of the budget goes to just maintain what you [already] have. So you take this huge IT budget and 80 cents on the dollar goes for no future, additional benefits. Many CIOs want to cut IT budgets by 10 percent a year -- this year, next year, the next year. They won't be successful, so we can assume that IT budgets will [be] between 5 percent down to slightly up. I think [that's] reasonable to assume. But what they really want to do is they want to take this entitlement down from the 80 percent level, because we know there are productivity gains [that can be made] from technology.

InfoWorld: So how does a vendor add value in that environment?

Landan: One of the reasons we are successful with our performance management business is that you can start small, with minimal investment, and the project structure is a subscription service. It's an incremental approach that will be much more common than those big elephant projects that we've seen in the last five years.