Behnia: This is a thread that really ties both the cloud piece and SaaS nicely together: We see the role of IT as evolving and changing from being the sole provider of services to the aggregator, broker and the integrator of these services, whether they're internal or external services -- because when there's a problem with Salesforce.com, you don't call Salesforce, you call your internal IT help desk.
Beauchamp: In a sense you're now talking about things like core network services, things that people in that business have always talked about. But now you're now starting to talk about it for the data center. IT becomes this aggregation manager for wherever this stuff sits. And it may very well be there's nothing in your data center. Your data center goes away, even for larger companies. [Instead] it's going to be popping all over the place.
Behnia: We see multisourcing as where people take an individual service and then ask who's the best provider at this price point and efficiency?
Talk about the evolving competitive arena today -- you're dealing with some pretty powerful companies that didn't start as management companies.
Beauchamp: I went to see Jim Barksdale and Marc Andreessen when Netscape was a little company; they were the hottest thing on the planet. I said we ought to talk about enterprise management. At some point one of them said, the whole management layer's going away. There'll be no need for a management layer because the Web is going to make that irrelevant. We're going to have our management products based on Web technologies, and we're going to build a complete management stack. Same thing with Oracle and Microsoft -- I met with Larry Ellison and Jim Allchin and they said the same thing.
Everyone says, "We're going to build a complete management stack." And every time the same thing happens. The customer starts saying: Why are you the logical person I'm buying this from? Am I going to trust Oracle to manage Sybase? So it begins to get wobbly. The other thing that happens is in the vendor's boardroom when they have a bad quarter and money's tight. They're saying, how much money are we spending on management and why? It's outside of our core. So they ultimately bail out.
Now HP started early and they're in it. IBM with the Tivoli deal got in it. And then there's us. And you can argue that CA certainly has a lot of stuff, right?
CA is primarily a mainframe company still, as best as we can tell. They've done some acquisitions of some nice products. And they talk BSM, and they talk cloud computing. I don't take them lightly, and we compete with them every day.
What's the defining philosophical difference between your company, HP, IBM, and CA?
Beauchamp: The management business, in the case of HP, is I think 2.5 percent of revenues. It's an interesting business. But at some point their board of directors has to talk about the other 97.5 percent of the revenue. By the way, [for customers] HP says you really need to use our servers, because the only way you're going to get the full robust capability out of this is going to be on our platform and our storage. There's just an inherent conflict of interest around buying the agnostic management layer from the people that are also selling you the entire soup-to-nuts platform. I would say that in general customers would view that as lock-in.