As if managing your current IT operations wasn't challenging enough, along comes cloud computing to plaster on another layer of complexity. How does your current management strategy need to evolve to support private cloud? How do you seamlessly control a hybrid private-public cloud? No one has all the answers, but BMC Software -- a champion of the concept of business service management -- is moving aggressively toward making cloud just another service option to be managed, like networking, storage, and applications.
In this installment of the IDG Enterprise CEO Interview Series, BMC CEO Bob Beauchamp spoke with IDGE Chief Content Officer John Gallant and Computerworld Editor-in-Chief Scot Finnie and Technologies Editor Johanna Ambrosio about BMC's cloud strategy, why BMC thinks IBM and HP are the wrong answer for management buyers, and how BMC's acquisitions have positioned the company to dominate the evolving management market. BMC's chief technology officer, Kia Behnia, also took part in this discussion.
(Read more from the IDG Enterprise CEO Interview Series, including Q&As with Cisco CEO John Chambers, Riverbed CEO Jerry Kennelly and SAS CEO Jim Goodnight.)
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Cloud
You're managing and building 150 cloud-based data centers for clients. Are these mostly private clouds?
Behnia: We're actually quite active on the public clouds that some of the service providers are developing. But the majority of them are private clouds.
Beauchamp: We've done some work with Amazon, for instance, around enterprise service-request management. So if someone requests a service, our engine can determine whether or not the most economic place to provision is in EC2 or Google or elsewhere. And then if they say that's where we want to go, we can go provision it and do the chargeback. It goes through their procurement processes, so you've got auditability and control.
How do you define the cloud? There are so many different definitions out there.
Behnia: We actually just use the NIST National Institute of Standards and Technology definition because we find that to be the most pragmatic and most vendor-neutral. It's fundamentally that the cloud focuses on delivering services. I think this sometimes gets lost in a lot of the discussion around cloud computing. Everybody's talking about infrastructure and hypervisors and virtualization, all of the components. At the end of the day, what customers really care about is getting secure, reliable, trusted services, whether that's from their internal IT department or from the external broker to their IT department, or from an external provider directly.
How do you differentiate cloud from virtualization?
Behnia: There are three critical elements that we're seeing across the various areas of cloud computing, whether that's infrastructure as a service, platform as a service or software as a service. First of all, the majority of the environments are virtualized. Most enterprises are not 100 percent virtualized. Many of the workloads and applications operate in nonvirtual environments. That's very important from a management standpoint.
The second characteristic is that they're highly automated, because you can argue that without automation you don't have a cloud. Amazon doesn't have hundreds of sys admins provisioning these servers. The third piece is that they're service-oriented -- in other words, typically there is a set of service offerings that are defined. You can think of it as a catalogue or a menu of items where you can define and differentiate tiers of service -- gold, silver, or bronze -- and bring forward things such as pricing.
Do customers want to manage their cloud environments with the same tools they use to manage their non-cloud environments?
Beauchamp: We've heard very loud and clear that they do not want to buy a new set of widgets to manage a new set of widgets. Customers have built workflows that they've adopted through the years. They need the tools to plug into those workflows. The fact that it's a cloud is really irrelevant. The customers just need to request a service, have the service provision, have some engine determine where is the least expensive and best-suited platform for the request, and then maintain the service level around the request with transparency and compliance. The fact it's on a cloud needs to be abstracted out of the discussion. That is an infrastructure discussion around a cost model and a delivery model, not an end-user decision.
So can you talk about the technology behind the scenes?
Behnia: The front end of this -- analogous to a restaurant or an online bookstore -- is a portal that would define a set of available offerings. Users can request the standard Linux desktop, regardless of whether that's physical or virtual, whether it's VMware or Zen, whether it's hosted in Amazon, or whether it's on premise.
The second portion is really around orchestration and placement, so that you can actually fulfill those requests and automate that. And this is where we have the broadest and deepest capability, being able to automate provisioning of not just servers, but also network configurations, applications and storage associated with that service.
What about the integration in this cloud environment -- if an IT shop is using your tools, but the cloud provider is not, or vice versa? How will you handle that integration to create a seamless management experience?
Behnia: A lot of customers want to set up an internal project cloud, and for a certain set of workloads be able to place those workloads into an Amazon environment. We've built an abstracted data model so that whether that server is placed internally or externally, from a configuration standpoint it is absolutely identical. The approval cycles are absolutely identical. Except when it comes to run time, we actually invoke the correct set of APIs to be able to leverage Amazon's APIs. So our value proposition is rather than tying all the management to each of the different technology silos, we've abstracted that out so enterprises can build their policies and workflows around the processes as opposed to around the technologies.
Do customers need to change those workflows?
Behnia: I think the answer depends. Much of the work that was done around best practices frameworks and compliance doesn't change. It's technology-independent. But we've seen at least a couple of areas where, to leverage the power of cloud and virtualization, those processes can be optimized. One of the critical areas is around auto-provisioning and configuration management. The whole premise of the cloud is that there's going to be so many changes to the environment that you need to have an up-to-date and scalable CMDB [configuration management database] and configuration management model that doesn't rely on human input. This entire lifecycle can be done in an automated fashion.
Also, the cloud forces some issues around what is a service, what is my class of offerings, how do I optimize my processes around that? Certainly, most enterprises see automation as a clear pathway toward cloud. Many of our clients start by automating server provisioning and application deployment, then move into adding the service catalogue.
Automation tools (not specific to cloud)
There was a recent Forester study that talked about the adoption of automation tools within enterprises of all sizes, and the survey said only about half of the respondents had implemented an IT automation tool of some sort. How does that map to what you're seeing?
Beauchamp: The ones that are adopting automation have a tendency to be adopting the tool for a specific purpose. Once they've adopted it for a specific purpose, they realize what they've got. Our salespeople are not going to try to evangelize how you can completely redesign the way you do IT because it's too long a sales cycle. So they say, if what you're focused on Rackspace [Hosting], as an example, is to be able to quickly provision and bring up a new server for your online subscribers, we'll do that for you. After they've put it that in they say, why couldn't I use that for remediation? So then they begin to spread out. It continues to evolve and move up.
There is nothing growing faster in our pipeline than automation. In this last quarter, our licensed bookings for non-mainframe products was 40 percent year-over-year growth, and the strongest piece within that is automation. And the pipeline's growing faster than that.
Behnia: One of the things you can measure is the time from when somebody in the business requests a new service and when that service is provisioned. We do this as a process audit with enterprises of all sizes. And it's a big eye opener, because if you were to look at this from the business standpoint, that reflects the agility of the IT department in being able to respond to increased demand.
From a revenue perspective, will automation subsume your traditional systems management products at some point?
Beauchamp: No, it won't. It's certainly a faster-growing market than traditional red-light, green-light systems management, which has also migrated into something different now. It's really much more predictive and real-time optimization, seeing it and being able to reconfigure. Now when our traditional systems management product sees an issue, it can call over to its friend in the automation components to reconfigure the system in order to address what it sees coming -- say, a capacity-related issue it sees on the horizon.
So we're finally seeing real, live autonomics -- systems that can heal themselves based on policy? The industry has been talking about those for 20 years.
Beauchamp: Yeah, we've been talking about this forever. The code actually works now. It's starting to really happen. I think traditional red and green light is not going away, but it's mutated into something that's more modern. But even with that migration, it's not as fast a growth as automation is right now.
Are customers finding new ways to put these tools to work? Are they discovering ways to bring in revenue or at least achieve better ROI?
Behnia: As I said before, one of the leading metrics around how agile the organization is [is] how quickly it can respond to new capacity requests or requests for new services. On average we're seeing anywhere between 40 days in best-case scenarios, well-run organizations, to as high as 110 days in some of the largest billion-dollar-IT-budget companies. We can reduce that down to literally a day. I was with a CIO that said how this is almost like FedEx. They want to have next-day delivery, or second day, or fourth day, depending on what the service is. So what that shrinkage in time means is that that's more time for developers to write new software, and marketing programs can get run faster. Not only does it impact the bottom line in terms of efficiency, but it directly affects the top line as well.
Are they telling you about ways they're making money?
Beauchamp: Sure. We have a lot of customers in the insurance industry. A year or two ago, they all kind of simultaneously panicked about their infrastructure, and they came to the realization they had to -- I'll use the old term -- Webify their offerings. What they were really talking about was revamping their distribution models. We've got to get the customers to go online, stop talking to people, stop picking up the phone -- just do this all on the Web as much as possible. So they went into this rush to bring all their front-office applications online and to make them really simple. One customer told us that right before they standardized on our software, they had an entire state that was down for two days and didn't know it until the reports came in and they saw they had zero revenue come in from the state.
Now they want to go the next step. They want to be able to deploy new applications very rapidly, push out new systems and new revenue-generating applications. The revenue drivers that they're forecasting have to do with new content going out. Content's got to be technology based, and we've got to do it in a cloud environment, we've got to go quickly. If they don't get it out quickly, or if they're price-inefficient, they're not going to be competitive. They all want the self-service model.
I'll give you another example. One of the world's largest software companies called us up. They traditionally have sold their software with the white-shirt, red-tie, blue-suit kind of approach where somebody walks in the door and you buy the big blob of software. They have become convinced that the road ahead for them is one where customers will go to a website, they will specify, "I need these application modules," and here are different pricing models. This one is number of seats. This one is all you can eat. This one is nine to five, Monday through Friday. Customers basically want to arbitrage price and have the ability to decompose their pricing. Traditionally companies have fought like crazy to not allow that. Now they're basically saying, "We give up." It's going to ultimately become disaggregated. Customers are going to be able to see our pricing models. But then in order for us to not go broke, we have to know what our cost model is for delivering that.
You're talking about retail.