The continued rise of SaaS-delivered IT service management

Last week, BMC announced its IT service management (ITSM) on-demand solution and quietly delivered the Winter 2010 release of its SaaS for IT service automation offering. As expected with a true SaaS solution, the upgrade was delivered to customers with no downtime and all customisations preserved. Looking forward, Ovum has no doubt that SaaS ITSM solutions will continue to steal market share from their on-premise siblings, as evidenced by the recent announcement of PepsiAmericas as a customer.

SaaS delivery of ITSM capabilities will forever change the ITSM software landscape

SaaS continues to gain much publicity and vendor backing, and a growing corporate acceptance as an immediate opportunity to quickly and flexibly deliver business-enabling IT services at a lower cost. The ITSM tool market is rapidly filling up with SaaS-delivered solutions from SaaS-only vendors, new dual-play vendors and traditional ITSM vendors adding SaaS versions of existing ITSM offerings, as evidenced by BMC’s announcement of controlled availability for BMC Remedy ITSM Suite On Demand. After the functionality and capability additions necessitated by the move from ITIL V2 to V3 in 2007, the SaaS delivery of ITSM-enabling capabilities is the biggest shift in the ITSM product landscape in the last five years, and it is quickly gaining traction.

SaaS is a good fit with ITSM enablement, with ITSM a low-risk entry point for organisations seeking to ‘experiment’ with SaaS

A major benefit of SaaS for ITSM is that it is aimed directly at the heart of the now commonly overstretched IT function – scarce IT resources can be redirected away from internal IT systems to focus on the delivery of business-critical IT services. However, for many organisations the key benefit of SaaS is its simple, subscription-based pricing model – usually a cost per month (or year) per user that covers everything needed to operate, including support and maintenance. This provides a lower and consistent level of expenditure that is opex rather than a capex investment. However, a lack of clarity over the meaning of SaaS can cause problems for procuring organisations. While the transferral of the application, hardware, and support and maintenance activity to the vendor and a better TCO scenario are relatively black or white issues, there is an area of greyness to traverse related to the technology that sits behind the ‘vendor curtain’. A SaaS solution must be architected such that the customer is able to self-customise its ‘application instance’, with these customisations preserved through what should truly be an effortless upgrade process. Without these facilities, the SaaS business case is not so compelling.

SaaS ITSM vendors will continue to catch traditional on-premise solutions in terms of product functionality

SaaS vendors often have multiple releases per annum, compared to the 12- or 18-month release cycles for on-premise tools. As a snapshot in time, has 11 ITIL v3 processes with PinkVERIFY certification, compared to BMC’s 11 and CA’s 14. Its Winter 2010 release does not include support for any new ITIL v3 processes, but it does deliver key functionality and new features requested by its growing customer base. However, its Spring 2010 release will organically develop and deliver new applications, such as run book automation, field service, more shared services and project portfolio management, to complement and enhance existing capabilities.

It’s not just SMEs buying into ITSM on demand

BMC is a key player in the enterprise ITSM tool marketplace, with its Service Desk Express Suite and Remedy ITSM Suite offerings making it the IT service desk market leader in terms of installed customer base. Its shift into SaaS is a shrewd, if not necessitated, move given both the increasing enterprise customer interest in SaaS-delivered ITSM capabilities and the frequent customer migration from an on-premise to SaaS delivery model. To demonstrate the enterprise-level credentials of SaaS ITSM offerings,’s latest high-profile customer addition, PepsiAmericas, serves more than 200 million customers in 17 different countries in North and Central America, the Caribbean, and Central and Eastern Europe, with 20,000 employees generating $4.9 billion in annual revenues. It joins a number of large corporate additions to’s customer base at the end of 2009 that have migrated from on-premise to SaaS-delivered ITSM.

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CA acquires specialist service-level management vendor Oblicore

CA recently announced its acquisition of Oblicore, a privately held provider of service-level management (SLM) enabling software, continuing its spending spree following the acquisitions of NetQoS and Cassatt at the end of 2009. CA’s increased focus on SLM is timely and a welcome change to the traditional ITSM vendor bias towards incident, change and configuration management.

CA is complementing existing SLM capabilities

The acquisition is designed to help CA’s customers ‘optimise IT for better business results and capitalise on the emerging cloud computing opportunity’ – addressing two of the major challenges facing IT organisations. This is an interesting play by CA – not filling a gap in its existing IT service management (ITSM) portfolio, but strengthening the ability for organisations to set, measure and optimise service levels across enterprise and cloud environments.

CA’s existing SLM solution, CA Service Assure, can already enable organisations to define SLAs and contract violation rules, monitor SLAs in realtime and report on SLAs from a business perspective. However, as a niche player Oblicore provides greater depth of capability and the ability to better manage cloud service quality levels.

Oblicore Guarantee is a highly competent SLM solution and a good fit for CA

Oblicore Guarantee is an enterprise-level SLM solution that supports the key phases of, and activities in, the management of SLAs and service delivery in IT engagements, from contract and SLA formulation, data import and aggregation into performance metrics, to the analysis and reporting of performance against SLA targets. Ovum had previously recommended that “any organisation with an extensive array of critical services, or any service provider, would do well to evaluate Oblicore Guarantee as a potential solution to managing the complexities of providing high-quality and highly available IT services.”

As a CA partner, Oblicore Guarantee integrates with CA solutions such as CA Spectrum Infrastructure Manager, CA Service Desk Manager, CA Wily Introscope, and CA eHealth. Designed for open connectivity, it also integrates with business systems and application and infrastructure monitoring tools from the major software providers.

With the level of functional parity within the ITSM software market, the Oblicore acquisition allows CA to emphasise its enhanced SLM capabilities as one of its key ITSM capability differentiators (‘true’ service portfolio management capabilities through CA Clarity PPM and CA’s Service Portfolio Management Strategy being another).

SLM is an oft-overlooked, yet vital, component of effective ITSM

SLAs have long played an important role in outsourcing and shared services organisation (SSO) engagements, and more recently for internal IT management purposes with the continued corporate adoption of ITSM best practice via ITIL. SLAs are important to support IT functions in their need to demonstrate business value and to maximise the availability of business-critical services.

However, most organisations find SLA management challenging. While drafting the right set of SLAs requires considerable time and expertise, it is the development of an automated system for performance data collection, aggregation and reporting that can be the major barrier to effective SLM. The recent corporate penchant for service catalogues, and the associated increased business focus on IT service delivery, has strengthened the need for a ‘true’ rather than a ‘one-off paper exercise’ approach to SLM.

Given the potential for IT functions to lose both visibility and control of IT services as they are migrated to the cloud, SLM along with IT financial management will become a key ITSM capability as organisations endeavor to manage a blended mix of on-premise and cloud IT service delivery.

Is this the start of the ITSM software market consolidation that some IT analysts have predicted?

The ITSM solution market is fragmented, split between vendors and products that address enterprise or SME requirements, niche ITSM products (such as Guarantee) versus those that deliver against the core ITIL processes, and by the method of application delivery with the emergence of SaaS-only ITSM solutions. This market is saturated and the ‘big four’ mega vendors have strong market share, but this is being attacked not only by traditional single-play vendors but newer, smaller vendors. The effect of potential ITSM pushes by SAP, Oracle and Microsoft will also no doubt change the ITSM software landscape forever.

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