Four Minute Mile

Virtualization and the Mid-sized Enterprise

Virtualization in all its many forms is taking the technology world by storm.  Server, desktop or application virtualization all promise to save IT organizations a tremendous amount of time and money by maximizing resources and minimizing the effort required to manage and maintain systems. 

While VMware's (VMW) home page (http://www.vmware.com) touts a bold claim "100% of the Fortune 100 Trust VMware", it may be that mid-sized businesses actually have the most to gain in the short-run from this emerging technology hype-cycle.  Neophyte's to the world of virtualization and its extensive web of jargon find the concepts abstract and difficult to understand.  There's a natural tendency -- therefore -- to assume it's a technology best left to the big guys with deep pockets and sophisticated IT resources.  That assumption is wrong. 

KACE has made its name serving the desktop and server systems management needs of mid-sized enterprise customers.  And, from our vantage point, we've watched our customers adopt virtual technology at an increasing rate for the last three years.  We've listened carefully to our customers and interviewed them extensively related to their plans to adopt virtualization technologies.  What we've found is that many are already rolling out virtualization technology today.  And others, are anxious to move that direction this year as they see an opportunity to stretch their IT dollars by getting more from their existing infrastructure.  In the world of the mid-sized enterprise, budgets and resources are stretched already, so it's even more compelling for them to explore new technologies that promise to save them time and money.

In our view, the combination of tight budgets, limited resources and tangible, immediate benefits related to virtual technologies are driving these mid-sized businesses to adopt virtual technology even faster than their Fortune 1000 counterparts.   And, with many players still vying to unseat VMware as the de facto gorilla in the virtualization market (e.g., Citrix Xensource, Sun xVM, Microsoft Hyper-V), we see the mid-sized enterprise emerging as a key battleground for market dominance. 

Even as virtualization promises to help businesses get the most out of their IT resources, there are many indications that increased use of virtualization will add complexity to the systems management discipline.  Regardless of company size, as more and more systems are virtualized there's impending explosive growth in the number of discrete managed operating systems requiring management attention from IT.  That's leading to an opportunity for systems management players like KACE. 

KBOX products manage both physical and virtual environments today.  Furthermore, we've led the market with some virtual-specific management capabilities such as vState management.  And, this week, KACE announced the general availability of its vKBOX offering which brings the benefits of the appliance-based packaging that KBOX pioneered to customers leveraging VMware infrastructure such as VMware ESX, VMware Server and VMware Player.  This new packaging option for our customers allows organizations to opt either for our hardware appliance or to install KBOX as a virtual appliance within VMware.

Even as we extend our lead in the systems management appliance arena and expand our offerings to for managing virtual environments, we're working on a number of new products and technologies to speed adoption of and improve management of virtual infrastructure.  Stay tuned for more from KACE...

101 Must Have Features for Server and Desktop Systems Management

Organizations have come to expect quite a bit from their systems management vendors -- especially from those vendors that handle the complete life-cycle of server and desktop systems management.  Hundreds, if not thousands, of useful features and capabilities comprise products like KBOX, Altiris, LANDesk, Microsoft SMS and others. 

Helping businesses save a tremendous amount of time and money through automated systems management is at the forefront of our design philosophy at KACE.   Customers spot the wow-factor in our products from the first demonstration and it's usually related to the fact that our KBOX products are designed to showcase ease-of-use and low total cost of ownership as competitive weapons.

Nevertheless, our KBOX appliance for server and desktop management is loaded with industrial strength features just like all the rest.  I've taken a bit of time today to highlight 101 features that KBOX supports and every business ought to demand from their systems and security management vendor (alphabetically listed)...

1. Administrator access control segmentation of groups and functions
2. Advanced cron-style scheduling engine
3. Affordable, low cost of ownership
4. Agent and Agentless Capabilities
5. Agentless provisioning and system recovery
6. Agentless SNMP Scan
7. Agentless, automated system discovery and agent provisioning
8. All-in-one
9. Appliance: purpose-built, high reliability and secure
10. Asset management for computers, software, contracts, and other items (e.g., phones, desks, mobile devices)
11. Audit Windows, Macintosh, Solaris and Linux computer assets, any software title or digital asset, and their configurations
12. Automated network and system inventory for discovering image-ready infrastructure
13. Automatic agent update
14. Automatic hardware inventory
15. Automatic population of software metadata
16. Automatic process inventory
17. Automatic services inventory
18. Automatic startup inventory
19. Automatic software inventory
20. Award winning ease of use
21. Built-in redundancy RAID and backup
22. Bundled drivers for simplified image re-purposing
23. Call home auto diagnostics and update
24. Compatible with application virtualization (e.g., Xenocode, Thinstall)
25. Compatible with disk encryption (e.g., Guardian Edge)
26. Compatible with server and desktop virtualization (e.g., VMWare)
27. Configurable Administrator Alerts
28. Configurable pre and post installation tasks for OS provisioning operations
29. Configurable ticket policy-based workflow, auto-assignment and escalation rules
30. Configuration and policy templates for common activities
31. Configure email alerts for asset changes, compliance policy violations and expiring maintenance, warranty and service contracts
32. Custom inventory rules to identify any item of value on a target machine
33. Custom ticket fields and the ability to customize values (e.g., Priority, Impact)
34. Dashboard reports
35. Direct link between OVAL vulnerability scan results and remediation tools for patching and repairing systems
36. Disallow program control
37. Easily import asset data through flexible data import
38. Easy-to-use integration with KBOX management capabilities including hardware and software inventory, asset management, deployment, patching, configuration management, remote control, alerts, reporting, self service and knowledge base
39. Email & User Portal submission/notification for tickets
40. Email or web trouble ticketing inputs
41. End-user messaging
42. File synchronization
43. Flexible, configurable reporting engine
44. Flexible, state of the are filtering metaphor for tagging and organizing IT Assets
45. Hierarchical categories for trouble ticket classification
46. Integrated automatic and configurable customer satisfaction survey
47. Integrated CMBD that's comprehensive, yet flexible to integrate with others
48. Integrated event log reporting
49. Integrated help desk trouble ticketing system
50. Integrated knowledge base management system
51. Integrated user self-service for approved applications
52. Integrated wake-on-LAN capability
53. Integration to allow creation of KB articles from tickets
54. Integration with AppDeploy.com offering immediate access to technical best-practice information populated by hundreds of thousands of IT administrators monthly
55. Integration with hardware vendor SLA and Warranty information from key vendors (e.g., Dell)
56. Intuitive Scripting, configuration and policy management wizard
57. iSCSI support for off-board image storage
58. Knoppix and WinPE/KPE based preinstallation environment
59. License compliance
60. Machine and group image targeting
61. Managed installation queues and sequencing
62. Managed software installations and updates for popular packaged applications (e.g., microsoft office, adobe acrobat) and custom apps
63. Multi-platform support (e.g., windows, solaris, linux, macintosh)
64. Multiple help desk queues
65. ODBC and Open Database Schema
66. Open Communication Architecture (HTTP, HTTPS)
67. Option for user bypass of managed installation (aka, snooze feature)
68. OVAL security and vulnerability scanning and remediation
69. Patch management backed by industry leading Patchlink technology  (cross platform for key operating systems and applications)
70. Payload encryption and secure verification for package deployment
71. Prepackaged portfolio of reports
72. Quickly reconcile asset data with financial data to ensure contracts are accurate and compliant via standard or customized reports
73. Rapid to Deploy: minimal training overhead, quick roll-out, minimal services
74. Registry control
75. Remote control
76. Remote site support and replication capabilities
77. Run now or scheduled actions
78. Scripted installation and imaging support
79. Script and policy result reporting
80. Scripting and policy wizard
81. Security configuration template for managing Internet Explorer
82. Security configuration template for managing McAfee
83. Security configuration template for managing Microsoft firewall
84. Security configuration template for managing Symantec
85. Security configuration template for system quarantine
86. Server-side, editable K-image format
87. Simple AD/LDAP integration
88. Single Agent
89. Software metering
90. Support for a wide variety of deployment package types (e.g., virtual, msi, zip, exe, other)
91. System Power Management capabilities for scheduled machine power on / off
92. System throttling to manage bandwidth for widespread management activities
93. Systems image library and image management system for managing installation media, drivers, applications and system images
94. Tether feature for remote diagnostics and support of the management product by the vendor
95. Ticket cross link to hardware/software inventory reports
96. Tight integration between computer inventory and non computer inventory data reduces complexity by aligning multiple databases
97. Track complete asset history, including changes over time
98. USB drive control
99. User portal for application deployment, knowledge-base and help desk self service
100. Verbose logging of all activity
101. vState management for keeping systems images in sync with baseline master

While that's a long list, it's not a complete list of what you'll need for complete life-cycle management of your desktops and servers.  Nonetheless, these 101 Must Have features ought to be on everyone's evaluation checklist.

More than that... as I outlined at the beginning of this entry it's important to look beyond features to understand what really makes a product special.  At KACE, we've centered our design efforts around saving our customers time and money; we believe that we do that better than any other player in our space.  Moreover, we've isolated four specific areas of differentiation where our KBOX product line delivers a powerful punch relative to our competitors:

1. Easiest-to-install and operationalize:
   Minimal pre-requisites, training or services to get up and running
2. Easiest-to-use:
   Extremely intuitive interface and unprecedented approachability for both novices and power users while maintaining industrial grade capabilities
3. All-in-one:
   Complete server and desktop life-cycle systems management in a box from first time systems provisioning to inventory and asset management to application deployment to configuration management to security vulnerability detection and remediation to patching to help desk to reporting and more.
4. Great value and TCO:
   Industrial grade features and unprecedented ease-of-use top plus modest pricing combine to deliver the lowest total cost of ownership in the market -- often a third or less than software-only alternatives.

Facebook and the Viral Nature of Social Networks and Communities

Sex sells...

Scratch that... Social Networks and Web Communities Sell.

Facebook's landmark deal with Microsoft (MSFT) placed a staggering value on the web's leading social network.  1.6% ownership acquired for $240 million -- that pegs Facebook's value at ~$15 billion.  That places Facebook's value as the 5th largest Internet company according to TechCrunch (see image at left).  If you haven't read up on this news, check out the write-ups on TechCrunch and The New York Times.

What's driving this madness? 

It's relatively simple... whether it's information or infectious disease, it spreads best in areas where people gather together.  And, where information flows freely and quickly, there's an opportunity to exploit it for commercial means.  The San Jose Mercury claims that Facebook currently boasts 50 million users and pundits suggest that 300 million could be within reach in a short period of time.

The obvious play is to monetize the traffic with context-sensitive promotions (a la Google Adwords (GOOG)).   But, Facebook doesn't stop there... founder Mark Zuckerberg wants Facebook to become the "Social Operating System for the Internet".  That's a tall order, but he's not the first Harvard drop out with such an expansive vision.  Ironically, Bill Gates built Microsoft on a similar vision of platform dominance.

With all of that said, some are skeptical that Facebook's brand of social networking will ever make money.  eWeek reports that Zuckerberg took a beating at The Web 2.0 Summit.  Zuckerberg cited product development and hiring as his biggest challenges... building the revenue model did not appear top of mind.  And, one only need look back a few days for headlines on eBay's write down of their over-valued Skype asset.

Community and Social Networks as Business Platforms

Regardless of how the Facebook tale unfolds, community and social networks can be viral and valuable business platforms.  The power of networking people and communities together to share ideas, best practices and know-how has been around for a long time.  Universities, religious organizations, think tanks, trade show operators and others have been at it for a long time.

KACE has been actively promoting the benefits of community-driven features within its Server and Desktop Management Software products for some time.  In July 2007, KACE acquired AppDeploy.com.  AppDeploy is the Internet's largest free online community of application and computer administrators.  This merger sparked the continuous development of AppDeploy's online community while integrating its extensive deployment knowledge-base directly into the KBOX family of appliances in the form of an exclusive feature called AppDeploy Live.

With over 18,000 registered members and more than 180,000 unique monthly visitors, AppDeploy.com has become a proven and respected source for users to share their own in-the-trenches advice about complex software deployment issues -- saving users precious time and money.  KBOX customers benefit in unique ways as well.  As the leading systems management appliance, KBOX administrators are now able to directly access context-based help and insight from AppDeploy directly from within the KBOX console.  Rather than searching the web high and low for valuable technical notes and information, they have ready access within the tool that they're using to do their job.

"AppDeploy.com has been an essential part of almost every package that we've managed over the past two years," said Christopher Blake, workstation administrator at Benchmark Group. "I'm not sure which is more invaluable: 'KACE's KBOX appliance or AppDeploy! AppDeploy and the community of contributing IT professionals make my job much more manageable."

"Stumbling across AppDeploy.com was one of the most productive discoveries we've made," said Leon Hewitt, systems engineer for Curtin University of Technology in Western Australia. "Because the Website is so incredibly easy to navigate, I'm able to quickly search and find installation solutions for most applications from command line switches to MSI modifications to registry fixes, AppDeploy has it all. AppDeploy is by far the most relevant and time saving resource for any technician involved in application deployment."

Facebook may have cornered the market for the "Social Operating System".   However, KACE has successfully demonstrated that similar principles of community can revolutionize the customer experience within the Server and Desktop Management Software market.  Building a strong community is a great way to fulfill our vision to "help administrators from all backgrounds get their arms around what can be a technically difficult subject", said Bob Kelly, founder of AppDeploy.com and senior product manager at KACE.

Old Guard or Innovator? It's Easy to See.

It turns out that it's a lot easier to recognize things that are moving than things that are standing still.  There's an interesting blog entry on the topic in Cognitive Daily.  In fact, according to the referenced blog by Dave Munger:

"We can recognize the faces of our friends very quickly from just a snapshot. Within 150 milliseconds of being flashed a photo, brain signals respond differently to photos containing animals than photos with no animals. We can categorize scenes as "beach," "forest," or "city" when they are flashed for even shorter periods.

But we also get a great deal of information from the motion of people and animals. We can identify our friends and family members just from a point-light display of them walking. We can also detect the emotions of point-light faces, and even the species of point-light animals."

Malcolm Gladwell's New York Times Number One Bestseller Blink (see Wikipedia or the Official Site) talks about a similar concept called rapid cognition which is the ability to make determinations near instantly often with a high degree of accuracy based on very little information.   For example, an expert on a particular artist may judge an artwork as masterpiece or fake with just a quick glance.

So, what's this got to do with the market for Server and Desktop Management Software? 

Well, I'll argue that one can quickly recognize rising star companies by looking at just a few data points -- particularly when you can also measure the movement or success trajectory of the company as well.  Companies like Salesforce.com (NYSE:CRM), Google (NasdaqGS:GOOG), VMWare / EMC (NYSE:EMC) and Facebook -- after all -- were all relatively easy to spot as up-and-comers before they hit the mainstream of American consciousness.

Server and Desktop Systems Management is a relatively mature industry that's outside of the mainstream limelight; however, it's an industry where a new class of competitors is moving quickly to innovate and grab market share from the slower-moving, old guard.  Incumbent players like LANDesk/Avocent (NasdaqGS:AVCT), Altiris/Symantec (NasdaqGS:SYMC), HP (NYSE:HP), IBM (NYSE:IBM), Microsoft (NasdaqGS:MSFT), BMC (NYSE:BMC), CA (NYSE:CA) and others are not innovating rapidly.  Against this relatively motionless backdrop, it's relatively easy to spot the companies that are making a difference and are shaping the future of Server and Desktop Systems Management Software.

Network Computing's 10 IT Management Companies to Watch published in 2006 and updated in 2007 offers an interesting guide post to the rising star companies in this space.  Companies like KACE and Klir Technologies are innovating and winning customers with innovative, new product, ease-of-use developments, rapid deployment, pricing, packaging and service advantages. 

KACE and Newton's Second Law of Motion

Newton's Second Law of Motion states that "The rate of change of momentum of a body is proportional to the resultant force acting on the body and is in the same direction" (see Wikipedia: Newton's laws of motion).  KACE has built a leading position in the market for Systems Management Appliances.  The actions that we're taking to innovate and create value for our customers are delivering an equal positive reaction in the marketplace.  It is this movement in the market that's palpable, contagious and indicative of the greenfield opportunity available in this market.

KACE ACTION

1. Focus on a Simple Value Proposition:
   Since inception, KACE has been focused on saving our customers (the actual users of KBOX) a great deal of time while simultaneously saving their companies money.  How do we do it?  First, we focus on ease-of-use as a competitive weapon.  We use everything at our disposal to make sure that our solution can deploy in a day and customers can get value from our solution immediately.  Second, we deliver a suite of tools that is all-in-one and also offers our customers an immediate ROI (e.g., computer inventory, software inventory, patching, application deployment, security and compliance management, help desk, asset management, provisioning and so on).  And, finally, we provide all of this at an initial price point and TCO that can be 1/3 the cost of our competitors.
2. Appliance-based Software Delivery:
   We deliver our solution as an all-in-one appliance (AbSD).  That single point delivers a powerful punch in the market.  "You mean, all I have to do is plug in this box, make a few configuration entries and I've got an enterprise class systems management platform at my disposal?", our customers ask.  The answer is yes.  Deploy in days not months, with no dependency on Microsoft SQL Server or Oracle or any of the hardware manufacturers outside of the KBOX itself.
3. The Power of a Professional Community:
   KACE merged with Appdeploy.com about six months ago.  Appdeploy boasts hundreds of thousands of unique visitors and it's the leading destination portal for Windows systems administrators.  These users exchange information on application management best practices.  They help each other out with tough technical problems.  This powerful community is now available directly from within the KBOX administrative console via AppDeploy Live.  So, as administrators navigate the KBOX UI to accomplish day-to-day systems management tasks, they're able to browse context-sensitive information syndicated from Appdeploy.com to the KBOX in order improve their knowledge and, ultimately, help them save time a tremendous amount of time.
4. Virtual Support:
   VMWare/EMC, Xensource/Citrix (NasdaqGS:CTXS), Virtual Iron and others are riding an enormous wave of change in the server and desktop operating system market.  I've written on this before in my blog entry "Can Microsoft Survive Vitalization?"  KACE is leading the market with some innovative virtual management capabilities such as vState Management.  And, we've been at it for years.  Some of our largest customers are managing thousands of virtual servers today with KACE Virtual Management Technology (see our whitepaper).  Staying on top of the new technology requirements that face virtual systems management is a specialty of ours and it's a critical value add for our customers.
5. KBOX 1000 Systems Management Appliance Version 4:
   Of course continued core product innovation matters too.  Next week, KACE will release it's KBOX 1000 Systems Management Appliance Version 4.  You'll have to wait until next week to hear the details.  But this release is a major leap forward that marries advanced ease-of-use and sophisticated server and desktop management capabilities.  The product has a wow factor when you see it.

MARKET REACTION

1. Press and Award Recognition:
   KACE has seen impressive uptake in 2007 within the press and analyst communities and the award circuit.  Recent recognition as Most Innovative Product by Windows IT Pro at the Microsoft Management Summit illustrates the type of recognition that our KBOX products are receiving in the marketplace.   
2. Growth Rate and Sales Cycle:
   KACE has enjoyed an average quarterly growth rate of 40% since inception -- that's per quarter.  Moreover, the sales process averages about 1/4 the time that one would expect for a typical enterprise sales cycle.  Customers see the product and it's immediately recognizable as necessary, valuable and different from the rest.  And, with such low TCO, customers can make a quick buying decision.
3. Customer Acquisition and Account Expansion:
   With over 50 new customers added in Q3 plus another ~50 repeat customers, the message is clear.  KBOX is an attractive alternative to the old guard -- and its attractiveness grows with time as customers engage with the product.  Hundreds of customers and 12 straight quarters of aggressive growth are both indicators of a company on the move.  See our Q3 Update release on the KACE website. 
4. International Expansion:
   Word is getting out on a global level.  KACE built its reputation and momentum in the US.  In 2007, our footprint has grown to include customers all across Europe and throughout Asia Pacific and the Middle East including India, Malaysia, Pakistan, Singapore, Brunei and the United Arab Emirates.

There is no doubt that it is a lot easier to recognize things that are moving than things that are standing still.  KACE is moving quickly in the market to prove that Server and Desktop Management software can deliver immediate ROI to businesses without costing a an arm and a leg and without requiring multi-month consulting and implementation cycles. 

The difference is clear and it's in the box.

iPod Touch: Oasis in an Innovation Wasteland

iPod Touch. 
iPhone on a diet or a PDA on steroids?
Whatever your answer, this device (especially when taken together with it's cousin iPhone) puts the final nail in the coffin of Palm's long slow death.  After all, which would you rather own?

In the late 1990s, Palm was at the top of its game.  It seemed like everyone was talking about HotSync and Graffiti and PIM and all the rest.  For its time, the Palm device was ultra-cool.  So how could you go from ultra-cool to ultra-dull?  Simple...a complete lack of innovation over a prolonged period of time.

Between 1998 and 2001, I had a front row seat to the battle for palm-top dominance as VP of Marketing at a mobile startup called AvantGo.  And I've been watching the industry ever since.  To give you an idea of how hot Palm was at the time... let me tell you about how fast we were able to penetrate the market as a fledgling Palm software provider.

Back in 1998, in order to grab some publicity and viral marketing, we at AvantGo signed up some top-tier publications to syndicate their content via our platform on all Palm devices.  The New York Times, Excite, The Wall Street Journal, Yahoo, Wired and CNET were among our early content partners.  Within a couple of years, we had 1800 content providers and 8 million users.... That's how hot the Palm platform was at the time.  By 2001 Palm was pretty much the only game in town and, in any case, had a huge lead on every other challenger for the market.

The only problem is that the Palm device has only barely evolved since then.  In fact, all the major innovation (to the extent you could call it major) came from their acquisition of Handspring.  As you can see above, the picture of the Palm TX above looks pretty much the same as it would have looked in 1999 (including the Yahoo page) which was possible via AvantGo back then.  What's more, I sat in meetings with Palm executives during the late 1990s where they kicked around and eventually barfed on all kinds of cool ideas to innovate on the platform.  I even remember one discussion that outlined an idea quite similar to what iTunes is today. 

Palm was an expensive calendar then -- and that's basically what it has remained.  They owned the market, they were the most innovative, they had it all figured out... or did they? 

Innovative ideas that can disrupt or impact business models, form factors, user interfaces, and so on are the life blood of high technology companies... innovation sells.  It's sad to see now -- that having spoiled every opportunity to innovate -- we now have the Motley Fool calling for the resignation of the Palm CEO.  It didn't have to end that way. 

Ironically, we have Apple, a player that failed at its first attempt for palm-top innovation (the Newton) and had essentially zero market share a few years ago now taking the pole position in a multi-billion dollar industry.  This is a case study on how a new player in a market can break new ground in an existing market and unseat a cast of seemingly unbeatable incumbent industry leaders.

So, can innovation disrupt the incumbent players in desktop management software, server management software or, more broadly speaking, systems management software?  I think so.  In fact, we're betting our company that KACE can unseat players/products like Altiris, LANDesk, Microsoft SMS, HP/Opsware, BladeLogic and others with some innovation of our own.  And, our recent "Most Innovative Product Award" from Windows IT Pro shows that we're drawing some attention along the way.

Let's look at just one example of where innovation really counts in the systems management software market (and there are many areas that we could choose from).  Most companies can save time and money by automating manual systems administration tasks.  And, yet, many have not taken the plunge.   Why not?  Because, historically, server management software and desktop management software has been too difficult to install -- much less configure and train to a level of competence.  In particular, the initial deployment process for a product like Altiris can take months if not years.  KBOX has driven down initial deployment of the management software to a day or two.

When a customer goes to deploy Altiris, they're facing a relatively complex architecture (as illustrated at far left).  What's hidden from view in the diagram is that there are extensive hardware and software prerequisites.  And, an installation could include 5 or more different Altiris Servers and an even longer list of unique Altiris Agents (source: Altiris 6.0 Getting Started Guide).  Check out the extensive software prerequisites for installing a single Altiris Server -- and you'd need several servers (as illustrated at near left).

In fact listen to Altiris' own description of what Altiris Infrastructure is:

“Altiris Infrastructure” is a generic term for all the installed Altiris components which may include a Notification System (comprised of the web-based Altiris Console, one or more Notification Servers, Notification Databases, Package Servers, and Altiris Agents) a Deployment System (comprised of one or more Deployment Servers, a Deployment Database, a PXE Server, and related Altiris Agents) a Recovery System (comprised of one or more Recovery Servers, Recovery Database, and related Altiris Agents) and Altiris solutions.

Sounds complicated because it is complicated.  Our customers who have switched from Altiris to KBOX tell us the process to deploy can take months versus days with KBOX.

KACE is working to bring innovation to the archaic world of systems management software.  Ease of deployment, ease of use, affordability are all key calling cards.  But, to keep with the theme, I'll stay focused on ease of deployment.  The architecture for a KBOX deployment is really self contained in one KBOX appliance.  It is one server packed and ready to go with everything that you need.  No assembly required.  All you need is the KBOX pictured at left, a power cord and some simple installation instructions on the back of an included poster.  As for training and services, KACE provides those over the phone... so there are no heavy-weight hidden costs.  Typically, our customers report that they can deploy in about a day at a third the cost of these incumbent players.

Innovation changes the game.

Can Microsoft Survive Virtualization?

Can Microsoft survive the rise of virtualization?  It's hard to say, but virtualization represents yet another threat to Microsoft's over-whelming market position in the computer operating system market. 

Admittedly, the list of threats to Microsoft's crown jewels has been long and no threat has yet undermined the Windows franchise.  The bone yard of companies that have launched credible threats at various levels includes but is not limited to Netscape, Red Hat, Apple, Liberate (thin client), Java (Cross platform apps), IBM OS/2 WARP and others.

What is this new threat?  Companies like VMWare and Xensource / Citrix in OS virtualization and Thinstall and Xenocode in application virtualization have pioneered a new set of technologies that threaten to do to Windows what Windows did to DOS.  Say what?  Well, you remember when DOS was the operating system and all of the applications were written for DOS.  Then, Windows came along.  Windows was basically an application written for DOS.  Windows was so new, cool and easy to use that pretty soon, applications were written for Windows not DOS.

I'll focus mainly on OS Virtualization...

Fast forward 20 years.  Windows is the most widely used operating system and, consequently, when a developer writes a new application, it almost always starts out on the Windows Platform.   Virtualization (e.g., VMWare ESX Server) replaces Windows as the Server OS (in a data-center example) and allows the operator to run applications in any combination of operating system "containers" on top of ESX (in this case, the guest OS is almost like another "window"). 

If this technology catches on in the data-center (and it appears that it has), eventually ESX could be the most prevalent server platform and the guest OS becomes a runtime environment for the application.  And, so, application vendors may begin to choose their development OS based on technology advantages rather than market share (because ESX is the anchor tenant and individual guest OS's become runtime containers with less intrinsic value).  So, in the future, a software company like SAP could possibly design a new product native to ESX (like the proposed BEA Liquid VM), or virtually on top of ESX using FreeBSD or Red Hat or Windows or any other operating system they choose, or via virtual appliance format (see my overview of appliance-based software delivery for more).  In a virtual world, the data-center owner may not really care.

So, for Microsoft to really suffer an erosion of market power in the operating system market, a non-Microsoft VM product would need to gain significant market share, then application vendors would need to feel released from OS specific development constraints.  And, then, they'd have to choose non-windows guest OS alternatives as their development platform.  This could take years if ever.

But, to play devil's advocate, why might application vendors do that?  Because non-windows OS's may be cheap or free, higher performance, more reliable, customizable etc.  Nonetheless, it's a chicken and egg problem.  Application vendors won't be truly free to choose until ESX or some other platform gains a large market share.  And, data-center managers may be slow to standardize on a VM until there are significant application advantages.  Or until VM environments are so easy to manage that it makes sense to run them even when most apps are still on Windows.

As Virtual Platforms become more and more prevalent, the level of network and systems management complexity grows.  For example, historically one physical server meant one OS.  In a virtual world, one physical server might be running many different OS's and applications -- so, for a systems administrator, there's more to manage. 

Systems management, therefore, could be a significant enabler for rapid proliferation of virtual OS environments.  As the leading systems management appliance vendor, KACE has been working to deliver best-in-class support for virtual environments since our first product shipped in 2004.  In fact one of our very first customers has been using KBOX to manage over 2500 virtual servers for the past 3 years.  And, since then hundreds of customers have signed up to use KBOX to manage physical and virtual environments worldwide. 

We started with some simple features to enhance the management of guest OS environment to offer a viable alternative to server and PC management software. Today our products support guest OS management and inventory, VM Server and Guest provisioning as well as our newly announced and patent-pending vState Management Technology capability.  vState Management is an innovative new technology that allows you to keep virtual guest OS environments in sync on your network.  So, if you have 1000 virtual Windows XP machines in an R&D lab and you'd like to keep them all configured the same way, vState allows you to scan all machines and update the virtuals that drift from the gold master.  So, if 25 machines have an application or file that's not included in the gold master, then vState Management will remove them (or add them if the converse is true).  This can add to the overall stability and reliability of the machines as they remain homogeneous and, at the same time, save a ton of time by eliminating the need to completely re-image those machines. By doing so, we are providing an alternative to PC management software to save systems management professionals time and money.

Can Microsoft Survive Virtualization?  I wouldn't bet against them, but virtualization players like VMWare are off to a good start.  And, afterall, most monopolies or near-monopolies are swamped over time by innovation.  Whether Microsoft survives virtualization or not, it's clear that systems management will play an increasingly important role going forward as this new computing paradigm takes hold.  And, of course, we're pleased at KACE to play a role in helping businesses and governments stay ahead of this new systems management challenge, as well as creating some learning materials for helping you understand the alternatives to PC managment software. 

To learn more about what we're doing in the area of virtualization and systems management visit our recent press release or visit our page on virtualization and KBOX technology.

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Additionally, I asked a colleague to give me some feedback on this post before pushing it out and he sent me links to two interesting articles on this topic that I had not seen before:

• "The Future of VIrtualization and What That Means for CIOs" in Information Week
• "Could Virtual Systems Replace Windows" in PC World

On-Shoring?

This blog entry was inspired by a well-written article by Denise Dubie of Network World called "Study: Could Onshoring Become the New Offshoring?"

Any college economics professor will tell you that -- at a macroeconomic level -- the workforce responds to changing circumstances by reallocating its resources to maximize its outcome.  So, for example, if a manufacturing facility shuts down in one city then, over time, the local people will rebound by finding new opportunities in new locations or with new employers.  Or, if better jobs are available in a new field or geography, workers tend to find ways to fill these new jobs even at great personal cost.

This has proven out many times on a large scale.  For example, the migration of farmworkers to the West Coast during the Dust Bowl of the 1930s (chronicled by Steinbeck in The Grapes of Wrath).  Or, the migration of gold-seekers during the Gold Rush in California during the 1840s and 1850s.

Similarly, there's been a lot of hype around global outsourcing whereby engineering and IT jobs are moved to lower cost providers off-shore (e.g., India, China).  In Silicon Valley, the place I call home, many have said that outsourcing to India-based entities will severely drain the economy of high tech jobs.  Indeed, most firms today outsource some of their engineering or QA activities to firms offshore.  However, an interesting phenomenon called "On-Shoring" has grown up alongside the traditional off-shore, outsource model.

Denise paints an interesting picture in her Network World article -- that talented IT and engineering resources are able to serve remote clients from lower cost domestic locations.   

We've seen this at KACE.  At our company, we have most of our core engineering resources in the US focused on developing innovative new products.  We supplement those resources with some off-shore QA resources.  However, importantly, we've seen a trend whereby we've attracted some very talented engineering resources in the US to work on KBOX technology as full-time KACE employees from remote domestic locations (e.g., Boston, Tuscon, Detroit) as opposed to our corporate headquarters in Mountain View.   

I attribute this to a variety of factors including economic factors such as affordable housing, as well as to social factors such as access to strong public school systems, as well as to the general availability of technology that make remote work efficient and economical.

The KBOX products that we sell within the Systems Management arena help support this growing de-centralized workforce.  As workers become more distributed (both domestically and globally) they still require high-performance computing and reliable systems -- and it's not economical to put an IT resource in close proximity to every end-user or every server.  So, KBOX appliance products enable systems administrators to remotely provision, inventory, update, patch, configure, secure and repair remote desktops and servers from anywhere. 

Thanks to KBOX, IT professionals and the machines they manage can enjoy a close working relationship from an administration standpoint even if they're worlds apart in the physical world.

Move Over SaaS, Make Room for AbSD

There’s a new kid in town sharing the spotlight with SaaS.  AbSD (Appliance-based Software Delivery) offers a similar, disruptive approach for delivering core business applications.  This new model of software delivery offers many of the same benefits as SaaS models and a few additional benefits that create an advantage for certain types of applications.

Rise of SaaS Originally Fueled by Mid-Market Buyers

SaaS application delivery models first emerged in the late 90’s.  And, by now, the story is well known.  The cost and complexity of installing traditional software-based enterprise applications had spiraled out of control.  Siebel, SAP, Oracle and others represented the old-guard approach.  Upstart organizations like Salesforce.com, Eloqua, NetSuite, LucidEra and others struck out at the very core of these models by offering hosted software models.   

The capabilities of these SaaS offerings remain substantially similar to their Client/Server predecessors.  CRM systems manage customer relationships whether delivered by SaaS or Client/Server.  A parallel statement could be made for ERP or BI offerings. 

Instead of offering new features in the traditional sense, SaaS models focused on ease-of-use, rapid time to deployment, centralized and automatic application maintenance and data backup.  In addition, most SaaS offerings price on a subscription basis which helps new customers avoid large upfront costs.

The benefits offered by SaaS hit a nerve with businesses that couldn’t afford or spend the time to deploy monolithic, traditional software systems.  The early growth came from mid-market companies and, over time, these mid-sized enterprises voted with their budgets on a large scale.  And, of course, now SaaS is widely accepted as the premiere software delivery model for companies of all sizes.

AbSD Finds Its Place Alongside SaaS

Appliance-based Software Delivery has crept on the scene over the last decade. The characteristics of an appliance-based software product include many of the same qualities found in SaaS:

• Easy installation and configuration
• Web-based interface
• Automatic application data feeds, maintenance, and upgrades
• Automatic data recovery and backup

In addition, AbSD offers several characteristics not found in SaaS:

• Dedicated hardware for a single application and customer
• Secure, on-premise deployment architecture
• Traditional upfront purchase or subscription license or hybrid

Early examples can be found in the consumer space.  TiVo, for example, is simply a Linux-based computer dedicated to the application of digital video recording.  The box is extremely easy to set-up, it’s easy to use and it mixes on premise capabilities with data feeds (i.e., programming guides) served up from a central location.  Moreover, there’s a mixed purchase model; some upfront fees with a modest on-going subscription.

In some cases, AbSD in-roads have come in direct competition with SaaS.  For example, SugarCRM offers a SugarCube appliance product that offers Salesforce.com-like functionality in a box.  That makes a lot of sense for some customers.  They can get a reliable, secure, on-premise solution at a cost that’s comparable or less than a comparable SaaS offering.

In other situations, AbSD has made inroads where SaaS doesn’t make sense because of security considerations or architectural reasons and, therefore, traditional software-only vendors remain entrenched.  Companies like KACE in systems management, Cast Iron Systems in application integration, and IronPort in messaging are proving that AbSD can be extremely attractive to customers for three key reasons:

1. Incumbent solutions are too difficult or time consuming to implement
2. Security concerns are too great to risk an off-premise SaaS solution
3. Alternatives are too expensive to purchase and implement

Bell Weather Adoption of AbSD within Mid-sized Enterprise

As it turns out, the mid-sized enterprise has proven to be fertile ground for this new paradigm once again.  The information technology staff within a typical mid-sized business wears many hats and, therefore, responds well to solutions that offer good business value with an emphasis on fast time to production, affordability and ease-of-use.

In the mid-sized segment, businesses have historically under invested in heavy-weight enterprise infrastructure.  Now, AbSD removes the time, cost, and complexity barrier.  And customers are buying it.  From where the customer sits, appliance means secure, reliable, all-in-one, automatically maintained and updated, and affordable – it’s all part of the appliance allure.

You know you’re getting through to the market when venture capitalists are beginning to see it.  When my phone rings, I’m hearing more potential investors saying things like “We’ve invested and won with SaaS companies; now we see that appliance-based models offer the same value proposition and open up potential in segments unreachable by SaaS.”

Indeed, move over SaaS, make room for AbSD.

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For additional information on AbSD visit an interview with Marty Kacin, KACE CTO or view his recent webinar on the topic.

Creative Destruction

Joseph Schumpter popularized the notion of Creative Destruction with his 1942 book Capitalism, Socialism and Democracy.  His vision of Creative Destruction simply holds that "innovative entry by entrepreneurs is the force that sustains long-term economic growth even as it destroys the value of established companies that enjoy some degree of monopoly power. (source Wikipedia)"

So, innovative new companies and products that revolutionize distribution models or affordability measures or operational efficiency or ease-of-use or any other factor that renders old-school models obsolete may unseat established competitors in a marketplace.  Well-known examples include:

• Southwest Airlines changing the economics (both for customers and the operator) of short-haul air travel undermining the position of major air carriers
• Walmart using technology, efficient store operation and centralized purchasing power to unseat Sears, K-mart and other national and international retailers
• Amazon.com using the internet to eradicate local retailers and large-scale booksellers
• Salesforce.com used it's "no software" delivery model to interrupt the enterprise software daydreams of Oracle, IBM, Siebel and others
• iTunes and iPod using advanced industrial design and advanced web-delivery to at once eliminate the local music-seller and the fledgling Windows/MP3 industry

The point is that industries continually evolve and transform themselves.  New entrants can innovate in well-established industries to disadvantage large and powerful incumbant players.  In a nutshell, KACE has set out to apply the principles of Creative Destruction to unseat established players in systems management.  Companies such as Altiris, LANdesk, OpsWare, Microsoft SMS and others have become reliant on business models that are too expensive, encourage over-pricing, excessive professional services and deliver overly complicated product. 

Our vision at KACE is to save our customers an unprecedented amount of time and money in the area of systems management.  We've innovated by delivering an appliance-based product that eliminates the time, cost and complexity barrier of traditional systems management.  By using the latest technology and software design principles we've been able to reduce the deployment time of a full-featured systems management platform and reduce the man-power required to operate the system -- all at an affordable price -- "deploy in a day at a third the cost". 

Today, hundreds of customers manage hundreds of thousands of end-point computers and servers with KBOX appliance-based products.  Illustrating, yet again, that Creative Destruction is constantly at work delivering a winning combination of price and performance in the marketplace.

New Ground

I've met a lot of people who say they'd love to start a company if they only had an idea for something that hadn't been done before.  And some take this to an extreme.  For example, I've heard more than one person quote Charles Duell, US Patent Commissioner in 1899 who allegeldy said, "Everything that can be invented has been invented." (see this interesting article in USA Today on bogus quotations) With 20/20 hindsight it's clear that such a position was bogus then.  What's surprising now is that even today many people find it difficult to see opportunity when it's all around us.  In essence, they believe that everything worth doing has been done.

Sure, the mouse trap has been pretty reliable for a century or so.  And, the ten speed bicycle hasn't changed much since I was a kid.  Iced tea is iced tea; coffee is coffee; burgers are burgers; economy cars are economy cars; desktop PCs are PCs and so on.  Or are they?

I believe that you need to look beyond the obvious to understand the business value of breaking new ground.  If you bake business model, branding, design, market reach and other concepts into the mix, it's easy to see that innovation isn't so much about product per se, it's about a combination of factors that add up to value in the mind of the buyer.  After all...

• Starbucks didn't invent coffee
• McDonald's didn't invent the burger
• Honda didn't invent the automobile
• Nantucket Nectars didn't invent iced tea
• Dell didn't invent personal computers
• TiVo didn't invent video recording
• and so on

These are examples of companies that made it big but didn't really break totally new ground.  They innovated around a business model, a feature, a design concept, a distribution model or some other factor that made a big difference in value from the perspective of the customer.

It's easy to identify new parallel examples in today's technology business community.  Facebook, didn't invent the facebook, they revolutionized it.  You Tube didn't invent web-based video, they revolutionized.  In fact, Google didn't invent search or online advertising, they revolutionized it. 

And, there are less obvious emerging players as well.  I like the idea, for example, of N-Computing revolutionizing how we deliver computing power to our families, our schools and emerging nations.

Similarly, KACE is all about making a huge difference in the large, existing systems management market.  When we started this company in 2003, it was easy to see that incumbent players like Altiris, LANDesk, Microsoft SMS and others had missed a big opportunity to bring powerful systems management capabilities to the mainstream Fortune 100,000 companies that comprise the mid-sized enterprise market in the US.  In fact, at that time, no single vendor occupied the famed upper-right quardrant of the Gartner Magic Quadrant.

We have a market-driven approach to leading the market for systems management appliances.  Our vision includes delivering easy-to-use, comprehensive systems management appliances that install in about a day and cost about one third of software alternatives.  This value point is very compelling for systems administrators who wear many hats and face on-going resource constraints in the face of growing systems adminstration requirements. 

It's a new twist on an old problem... it's breaking New Ground.

Rob Meinhardt
CEO, KACE