InformationWeek: The Business Value of Technology

November 6, 2000

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Costly Management

Systems and network-management apps are costly and complex, and often don't work as promised, companies are often exploring

By George V. Hulme

More on systems management:

Look Before you leap into msps (10/2/00) VARBusiness: Managing Networks,Managing Relationships (10/16/00) InternetWeek: IT Pulls Back On PC Upgrades (10/9/00)

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ichael Bauer had a problem. One of his IT managers at the University of Western Ontario had reported intermittent E-mail failure. "All he said was that he wasn't getting some of his E-mail messages," says Bauer, senior director for IT services at the university. As with most sporadic troubles, network engineers were having a tough time figuring out the cause. Network administrators checked all the usual suspects, such as desktop and server E-mail settings. No luck.

Bauer had recently installed some network testing and auditing software called NetAlly from Omegon Ltd. He was planning to try out the software and decided to give it a real-world problem--his manager's E-mail snag. After installing a NetAlly agent on the manager's desktop, network engineers were able to isolate the problem, which resided with a network interface card, within an hour. "He was getting most of his E-mail and had network access. So checking the NIC would have been one of the last things you'd think to do," Bauer says. "A problem like that can send you down a real rat chase."

That's the way network-management tools are supposed to work. It's how most network-and systems-management vendors would have customers believe they work: right out of the box. In fact, most companies end up spending more money and time trying to implement them than they originally planned, and many fail to get as much out of their systems as they had expected. That's especially true of the more complicated, feature-rich network-and systems-management toolsets or frameworks.

You don't have to go far to find IT managers disenchanted with enterprise systems-management implementations, although it's hard to find ones who will talk about their problems for attribution. "We invested $9 million in a framework that took us two years to get anything of value out of it," says one IT manager at a large manufacturing company who didn't want to be identified. "We're only now, after two years, starting to get some value out of managing our IT assets better and being able to detect certain problems before they cause a failure. I almost lost my job over this."

"As much as Computer Associates and Hewlett-Packard would like you to believe that these toolsets work out of the box, none of them work out of the box," says Jim Ditmore, CIO for Ameritrade, an online brokerage based in Omaha, Neb. "Sometimes the vendors overpromise how quickly these tools can do what they're supposed to do."

Still, few companies have the luxury of ignoring enterprise systems-management software. The relentless demand of E-business, which is forcing companies to open their networks to customers, vendors, and business partners, is creating the need for 99.999% uptime, every day of the year.

"The need for network-and systems-management software has never been greater," says Rick Sturm, president of research firm Enterprise Management Associates. Companies of all sizes are turning to this software to help monitor real-time performance of systems and service-level agreements with vendors, as well as to permit network and systems consolidation through management centralization, he says.

Companies are willing to invest a lot of money in these frameworks, analysts say. In some cases, a large company can spend as much as $10 million to implement an enterprise systems-management framework. Dataquest estimates that the worldwide network-and systems-management market will reach $10.2 billion this year and will grow to over $21 billion by 2004.

But that's just the start. Market research firm International Data Corp. predicts that companies will spend $3 on services for every $1 spent on network-and systems-management software licensing fees. If true, that means companies that spend $21 million in 2004 for network-and systems-management software will spend another $63 billion simply to implement their management initiatives.

Computer Associates and its Unicenter TNG is the market leader, with 23.3% of a 1999 market of $8.58 billion. IBM and its Tivoli Systems unit follows with 17.3%. Next comes BMC Software's Patrol with 10.6% and HP's OpenView with 4.8%. A host of other companies, which mostly sell individual applications for specific functions, make up the rest of the market (see chart, p. 86).

Steve Foote, president of IT industry research firm Enswers.com, says a typical installation costs six figures, including software licensing and consulting services, and can take 18 months or more before fully implemented. Very few will work as planned, at least initially, he says.

What's the problem? Analysts say it's a variety of factors. Network-and systems-management vendors push software that's powerful, but so complicated and unwieldy that no one but trained consultants can implement it. Also, customers fail to implement the software properly, don't allocate enough money and personnel to do the job, and eventually get frustrated and quit.

"Many of these companies approach these tools as if they're installing backup software," Foote says. "They fail to plan and architect the implementation properly. They underestimate the amount of resources required to get these tools up and running. And they fail to establish goals to measure success. As a result, most of these implementations fail before they even begin."

That may help to explain why more companies are looking for alternatives. Among the approaches growing in popularity are using outside integrators and consultants to help implement the software, and outsourcing some, if not all, network and systems management. "You hear all of the horror stories, such as shops having a group of seven engineers supporting HP OpenView and they're only monitoring the network," says Roger Smith, director of IS for Manufacturers' Services Ltd., a $920 million electronics manufacturer in Concord, Mass.

Smith wanted to avoid becoming another horror story as his network grew rapidly and keeping his systems up and running in the highly competitive manufacturing business became more important. "We decided after purchasing OpenView to find someone to help us implement and monitor this," he says. His reasons? The lengthy installation time was longer than he wanted to wait, and the cost to staff a 24-by-7 network operations center would be prohibitive.

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Photo of Michael Bauer by Dwight Cendrowski

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