The panelists were:
William P. Crowell – former Deputy Director of the National Security Agency
Michael P. Jackson – Deputy Secretary, Department of Homeland Security
Jose A. Rodriguez, Jr. – former Director CIA, National Clandestine Service & CIA, DCI Counterterrorist Center

Overall, it was a very nicely arranged event on a brisk fall evening with about 100 CXO attendees; mostly large but some small government contractors and a few product companies like ScienceLogic that conduct business with military, intelligence and the public sector.

No surprise, given the financial crisis the economy is suffering from that the panelists said we also have a crisis coming on the Federal budget front. This will put enormous pressure on the way Administration thinks, and how and where to spend the $$.

Obama’s tone regarding the issues he will be confronting in the world during the election was encouraging. Make the world more non-partisan and take on the threats that we have in front of us head-on!

The panel was very upfront about current threats. William Crowell said,

“It is highly imprudent to believe that there will not be another 9-11. We have to fund and support the work to stop other attacks. We can only mitigate risk but we can’t eliminate risk. We have to try to absorb the sense of urgency and wake up every day looking at the intelligence screens as if 9-11 happened within the last couple of months.”

He added,

“They (the intelligence community) need the innovation, sense of commitment and urgency that comes from the private sector – a sense of mutual commitment to that mission.”

Predicted Priorities for investment for DHS:

1. Cyber attack as the top issue
2. Nuclear threats including dirty bomb
3. Chemical and biological attacks
4. Explosive attacks against critical infrastructure with maximum # of lives and or financial disruption / loss.
5. Large scale natural disasters – hurricane + earthquakes
6. Border penetration - identity management and border management issues

An Obama administration will spend dollars around these threat vectors. They will want to spend $$ to help state and local governments. Grants to state and local governments should significantly increase with the Obama administration, so think about how you will increase your focus on the state and local government spending initiatives.

Secure border investments – the panelists believe that the new administration will feel compelled to invest here. Michael P. Jackson bluntly said, “You have to make investments in border tools to get meaningful immigration reform.”

Panelists agreed that the 1^st year will be an intense period of scrutiny about fundamental directions. We can’t afford it all at DHS; it is dramatically under budgeted. At TSA/DOT and then at DHS, we spent about $4 Billion on technology investments since 9-11; those investments are now reaching the end of the original service life.

One gripe from the panel that I found humorous: “We don’t have a group of people who think like entrepreneurs.” It is insane how long things last when you buy things in the government. As an example, we are still replacing vacuum tubes in some of the very old FAA gear… this is well beyond what any reasonable person would think these initial investments should/would last.

Final Thoughts:
I actually think that the Obama Administration will be quite favorable to COTS software products, SaaS offerings, and creative financing initiatives from the private sector. The government just won’t have the capital budget to do everything it wants to accomplish. I would say if you look at how intelligently and aggressively Obama used technology to assist his campaign, the odds are good that this new breed of IT talent (which is already really comfortable with SaaS products, blogs, wiki’s, hosted/outsourced Cloud solutions… this team really understands the latest technology trends) will quickly work to bring these new IT paradigms to the Federal marketplace. Clearly the private sector can help the Government achieve more with lower capital budgets – beginning to provide services rather than transaction-based selling. Another clear idea is to think about leasing as a better way to work with the government which going forward will have increased budgets restrictions.

They will likely be in confrontation with members of Congress that won’t change fast enough, however the future of our nation’s ability to fight terror lies in becoming more efficient and effective. It requires the government be flexible enough to figure out what jobs and IT functions to outsource in a nimble and smart way. My prediction: this is great news for Service Providers. Overall the next 4 years should be great for our business as well as the Managed Service Provider/SaaS industry!

Congratulations to:

Apptix

Hughes

Merkle

Sourcefire

EM7 at the Merkle NOC

And we must point out that Hughes topped the Maryland Technology Fast 50 list with an astounding growth rate of 138,762% over the past 5 years! Wow, it would be tough for any company in the world to beat that growth rate, but all kudos must go to Hughes and this incredible achievement. I’m sure we’ll see them on the National Technology Fast 500 list coming out soon.

Now I would like to say that without ScienceLogic and EM7 much of this would not have been possible, but of course that statement would be an incredible stretch. What I can say is that our product and our technology has had a profound impact on the operational efficiency for HughesNet, so perhaps you can give us, using a basketball analogy, 12 assists in the game.

Interesting to note, several other award winners are in the midst of product evaluations as we speak. I think that EM7 Meta-Appliances are a strategic weapon within each of these businesses to leverage our technology in interesting ways which create huge organizational value and operational efficiencies.

So to all those companies who have won this year… a BIG congratulations from the bottom of my heart. For our existing customers who made the list this year… keep working hard so you can make it again next year. For ScienceLogic, stay tuned in: We were not quite big enough to make the list last year, however I am very excited about our growth in 2008 and am quietly confident that you will see us on the Virginia Fast 50 list next year!

Here we talk to John Proctor, who started out as one of our first customers (and the first MSP customer). And he believed in it so much, he eventually became part of the ScienceLogic team. (Remember “I’m not only the President, I’m also a client” from the Hair Club for Men?)

John shares his perspectives about the service provider world and why he took a chance on a little-known product called EM7.

ScienceLogic: What is your background? How many years have you worked as a service provider and for what types of companies?

John Proctor: I have been working with Service providers for over twelve years. I worked at a major regional service provider for six years and before that I designed and built national and international networks for ISP’s and Fortune 500 companies as a consultant for PriceWaterhouseCoopers and WorldComm.

ScienceLogic: You were one of the first customers of EM7 – why did you choose it and how did you get over the hurdles associated with using a start-up company’s product?

John Proctor: We were actually customer number five. Back in 2004 when we evaluated and purchased EM7 we could see that EM7 provided about 80% of what we were looking for in one integrated solution right out of the box. One of the things that sold us on EM7 was that the ScienceLogic founders had all previously worked for a service provider, so we knew they understood our business and our challenges. But in the end, it comes down to features. Once we compared EM7 functionality to the alternatives, it was clearly a “no brainer.”

ScienceLogic: What other alternatives were being considered?

John Proctor: Well, we had started with a few point solutions, but as our business and product offerings matured, this resulted in a growing number of point solutions. What started with 3 or 4 ended up as 14 separate tools. They all had strengths but what they didn’t have was integration and because of this they could not scale. And, if the tools could not scale, our business could not grow.

So, naturally we started looking at framework solutions, but they are expensive to buy, expensive to implement, and expensive to maintain. At one point, we even considered some open source projects. There were several that showed promise, but we would still be stuck with tools that were not integrated. So then we considered hiring developers to cobble something together that would work for our business. The only problem with this alternative was that we felt it would take 6 to 8 months before we could have something viable to work with.

ScienceLogic: What products were you using before EM7? What were your goals?

John Proctor: Before we purchased EM7 we used 14 different point solutions to deliver our products and services to the marketplace. Tools like NetCool, Openview, Argent, Heat, What’s Up Gold as well as several other point solutions, vendor specific applications and manually updated spreadsheets. And, as I mentioned before, this does not scale. This also adds a great deal of complexity when you begin to consider business continuity and disaster recovery. All these tools were vital to the delivery of our products and services. Any service provider will tell you it is all about uptime. So if the product is uptime, the tools used to deliver it have to be available 24×7x365.

Our goals were simple: scale and redundancy. As it turns out, the solution was simple as well. EM7 provided a tool that could replace the functionality of almost half of the existing point solutions and the applications that could not be replaced were integrated with EM7 to provide our staff with a “single pane of glass” to see the status and performance of each area of the business from one application. We had visibility into everything from facility systems to applications using EM7.

ScienceLogic also delivers an extensible configuration that addressed uptime and redundancy. We deployed collectors throughout our network that reported back to a central pair of redundant database servers and with this configuration we were able to perform backups and add capacity without taking the system down.

ScienceLogic: Why are service providers different from enterprises? How are their needs different?

John Proctor: First and foremost, service providers face the same challenges that only the largest enterprises ever face and they also have many unique challenges that only service providers experience.

One challenge we faced was that we had multiple datacenters in different states. They were all interconnected with plenty of bandwidth between each site, but the tools were not designed to be used across the WAN. Our staff in our remote data center did not have the same access as our staff in the corporate office. Since EM7 is web-based, it immediately eliminated this problem.

Another challenge is that service providers must manage systems across multiple domains. Back in the early version of a specific tool we were using before EM7, the only way you could implement it across multiple domains was to put the same username and password on every computer that you monitored. Beyond the security concerns, maintenance was a nightmare. Anytime we had to change the password, we would get locked out of dozens upon dozens of systems. When the password was changed on the monitoring server, it would attempt to login to the remote machines and fail. Repeated attempts would result in the account getting locked. I think that vendor eventually addressed this issue, but service providers seldom find tools that were designed for their unique situations.

ScienceLogic: How is EM7 geared to service providers?

John Proctor: Enterprise IT is a trusted part of the business; they are one of the team. Service providers are outsiders that must earn trust by showing the customer exactly what they are doing.

EM7 provides a multi-tenant environment that allows service providers to manage systems across many different customers while at the same time providing the customer access to see the same information but only what’s relevant to them.

EM7 was built by service providers and even includes a few features just for them. Two of my favorites are bandwidth billing and the emergency notification system. Take bandwidth billing, for instance. EM7 provides a way to collect bandwidth utilization, store subscription information, and calculate a bill from any one of about 10 different methodologies. And at the end of the billing period, EM7 sends the completed report out to whomever you chose via email.

Another unique service provider feature is the emergency notification system. EM7 allows the provider to track what customers used their unique infrastructure components. If they have to perform maintenance on the infrastructure component or have a problem they can send an email to all of the impacted customers in a matter of minutes.

ScienceLogic: What trends do you see for service providers? What about big trends such as virtualization and cloud computing – how will they impact service providers?

John Proctor: Virtualization is really hot for service providers right now and for the same reasons as in the enterprise. Service providers run data centers and data centers must be powered and cooled. So, anytime they can use a virtual server instead of adding physical equipment it is a good thing. But then you add the complexity that multiple customers reside on the same host and you must track things like bandwidth utilizations by guest OS, and it all gets a little harder. Lucky for us this is not a problem for EM7.

I still think it’s early days for cloud computing. Depending on who you talk to, much of what service providers (especially the big ones) have already been doing with SAAS offerings and hosted applications could be described as cloud computing already. In which case, service providers are ahead of the game. But whatever the “final” definition, cloud computing actually shares many similarities with virtualization – in that service providers (or enterprises) will need to be able to manage far more “devices” in real-time with “zero downtime” expectations by customers. What this really means is that you’re going to see much more automation in provisioning and IT monitoring tools to handle the scale and speed with which things can change in the data center given vm migration and the talked-about switching between “clouds” that can be used for high availability.

Does Oracle run the world? I would have to say no but Raj (Larry Ellison is his idol) and the 40,000 Oracle customers that descended upon SF last week might beg to differ. What do James Carville and Mary Matalin have to do with enterprise software? Pretty much nothing, except for the fact that they delivered the opening keynote for Oracle OpenWorld. (And that’s the only and last politically-oriented thing you’ll hear from me as we run up to the election). For a surprisingly funny and extensive photo gallery of the eye-popping event, check out cdye1’s photostream on Flickr.

But UB40, Elvis Costello and Seal aside, Oracle OpenWorld did offer training, certifications, and always entertaining speeches by Ellison. Ben Worthen’s favorite – “Larry Ellison’s Brilliant Anti-Cloud Computing Rant” delivered to analysts on Thursday. From Ben’s slightly-edited excerpt:

“The interesting thing about cloud computing is that we’ve redefined cloud computing to include everything that we already do. I can’t think of anything that isn’t cloud computing with all of these announcements. The computer industry is the only industry that is more fashion-driven than women’s fashion. Maybe I’m an idiot, but I have no idea what anyone is talking about. What is it? It’s complete gibberish. It’s insane. When is this idiocy going to stop?

“We’ll make cloud computing announcements. I’m not going to fight this thing. But I don’t understand what we would do differently in the light of cloud computing other than change the wording of some of our ads. That’s my view.”

So did everyone catch that? Cloud computing is complete gibberish and idiocy, but apparently Oracle’s already been doing enough around it to advertise the fact. I will have my cake and eat it too!

We’ve been pumping out the posts from the shows we went to – let me tell you, live-blogging is hard when you’re trying to share apparently miniscule amounts of bandwidth with 14,000 other attendees – and we have even more to share as we step back, contemplate and describe how some of the announcements, info and especially roadmaps fit into our overall picture over here at ScienceLogic.

For example, we released the results of our annual industry IT survey last week. Twice a year – at FOSE (for Government IT) and at Interop NY (for enterprises) – we take advantage of the fact that we have a big beautiful booth at these shows and offer a fabulous ScienceLogic t-shirt in return for a couple of minutes time with attendees living the problems we try to solve. Instead of telling people what their problems and priorities are, we like to ask.
Interop NY Survey - Trends and Challenges
Detailed Reports on Trends and Comparison to Government IT

And I just had to share this one because it is so bizarre. Are VMware and Paul Maritz guilty of plagiarism? You have to check this out to get even part of the picture. Apparently this guy has posted his slides (we know they are from VMworld 2007 because it says so in the lower-right-hand corner…) which prove that the “virtual datacenter operating system” idea was his idea a year before it showed up on Maritz’s keynote this year. Hmmm. And then after posting all these slides and making all the connections between his presentation and Maritz’s, he says he’s just kidding about the plagiarism. Can anyone sort this out and let me know?

I’ll tell you who wasn’t kidding when I went by their booth at VMworld – a certain chargeback vendor and VMware “partner” who was quite shocked two months ago when they walked into a meeting with VMware about future roadmap. Apparently, the slides they saw (preview of VMware’s announcement re adding extended chargeback capability within vCenter management services) were mighty might similar to slides they had given in a presentation to VMware about their own roadmap. Coincidence? I’ll let you decide. And I’ll also say, their strategy to combat this – support for Hyper-V coming early in 2009.

When I walked up on stage and accepted the Inc 500 award, it hit me square in the face that this is a rare accomplishment, and even more difficult for a product company that started without the benefit of VC funding.

Dave with wife, Anne, at the awards ceremony
Over the 2 day period, I heard from some great speakers with entrepreneurial passion, many who never had accomplished making the list. It is so highly competitive and just plain hard to do.

I loved hearing some of the speeches during the conference and getting to know other entrepreneurs that attended the conference talk about how they created their niche and ultimately built a successful company from a good idea.

Because I enjoyed hearing some of what I like to call “golden nuggets of wisdom” so much, I thought in my conference wrap-up I would pass on a few to our blog readers:

Tom Peters – Author In Search of Excellence and The New World of WOW

“Only 7% of our great nation works for Fortune 500 companies. Small businesses and the entrepreneurs are the jet fuel that makes our country fly.”

“Brand is shorthand for a collection of experiences, memories of what it will be like the next time a customer deals with you. With the advent of blogs and consumer activism, Brand is impossible to fake; it is like the temperature in the room… it is there… it exists.”

Chester Elton – SVP Carrot Culture Group

“At the casino – they train the heck out of the Valet! Why do they spend 3 months on Valet training? Because he is the first and the last person to greet and interact with a visitor during their trip! Who is your company Valet?”

Paul Bennett – Chief Creative officer IDEO – speaking on — Creating a culture of optimism:

“You need to ditch B-B and B-C Need to become P-P Person to Person.”

“You don’t buy loyalty… you earn it… this is an interesting challenge, but small allows us to behave like human beings… Going off script and doing something human is a great place to start.”

“Stop obsessing about ROI and start obsessing about ROC! Return on Customer/Consumer is much more powerful than ROI!!!!”

“Happy people, unabashedly doing, happy things, makes for happy companies, which create happy businesses which enable happy cultures… IN WHICH THRIVE”

Marilyn Carlson Nelson – Chairman and CEO Carlson Companies – A family owned $40 Billion empire including TGI Fridays, Radisson Hotels…

“My leadership was tested terribly - after 9/11 the travel industry was particularly harmed. It was an extraordinary time for Carlson. “

“Put tactics around these strategic initiatives”

• Whomever you serve, serve with caring
• Whenever you dream – dream with your all
• Wherever you go, go as a leader
• And never, never give up
• Whatever you do – do it with integrity

“That builds trust, trust builds relationships and relationships build results.”

=============================================

Actually, I took about 40 pages of notes throughout the two days… So I can’t say that this will be my last summary post on the Inc 500/5000 conference, but I can say that the conference did leave a strong impression about how I can help shape the future of ScienceLogic in an even more positive way.

Interop NY 2008 was up considerably in size from the show in 2007.  According to Lenny Heymann, the GM of Interop, this is a trend that they expect to continue.  My personal experience was that the size of the vendors was also up this year.  I think there were so few startups that “Startup City” was pulled from the show completely.  In any case, the show floor was full and there was plenty of attendee traffic to go around.

Definitely helping out from a traffic and draw perspective was the addition of the Web 2.0 Expo - Interop was co-located with both Mobile Business Expo and the Web 2.0 show. It seems like that buzzword still hasn’t lost most of its luster.

From the InteropNet perspective, the main feeling was one of being rushed.  With the show only lasting two days, and the InteropNet team only having a couple of days of ramp up time, everything was compressed into a much shorter period than in Las Vegas.  While this would normally be a challenge, it’s an even bigger challenge at the Javits where the InteropNet team was allowed to do almost nothing ourselves because of union rules.  You’d be surprised how frustrated you can make a network guy who’s told that he has to stand there and watch the electrician plug things in, rather than just doing it himself.  The only thing faster than the InteropNet team getting the Interop NY network up, was my pedicab ride to the InteropNet Booze Cruise.

In any case, everything came off without a hitch, and EM7 performed flawlessly catching a couple of power outages that last day and alerting everyone before the batteries on the UPSes had a chance to run down.

Over the next couple of weeks I’ll analyze the data from the show to see how many tickets were handled, amount of bandwidth consumed, etc and we’ll do a comparison to Interop Las Vegas.

We’re (both ScienceLogic and me personally) looking forward to Interop 2009.

John talked about Microsoft’s mission, his perspectives on key industry trends and market opportunity; he touched on Cloud Computing and Virtualization and took some Q&A from the audience of Managed Service Provider executives.

One of his first proclamations - Microsoft has really embraced the heterogeneous environment. Really? How in the world is Microsoft going to help convince IT line managers, or mid level managers to believe this statement? I think they have a long way to go to achieve this vision with any credibility in the marketplace.  I do know that they are making small strides.

Microsoft has been widely credited with some very good blogs that are self critical and introspective. They have also been quite active in the standards boards within DMTF and many others such as Open WSMAN and CIMON (Open Pegasus). Microsoft in February published 30,000 pages detailed technical specifications – protocol documentation for Exchange, since that time they have published another 15,000 pages. They have had over 224,000 downloads since February 21, 2008. Thus they are trying to be more open by making some of these secret sauce protocol resources directly available on the web.

So for now, I will take a very cautious wait and see approach to this proclamation. Time will tell.

Trends

• Rapid growth continues
• Hosting Competition has a new face
  • Platform gorillas (amazooglesoft)
  • Ad supported Web 2.0 hosters (Google, Facebook,)
• Utility Cloud Computing models are expanding to non-traditional hosting companies
  • Wells Fargo vSafe - hard to believe that a big bank would start to offer a SaaS offering
  • New tools and markets digital ribbon, CohesiveIT

IDC Data shows that growth of SaaS ISV’s is the biggest layer of growth. The fastest growing services are complex, custom applications. IDC says this area will be bigger than the hosting area in the next 5 years. John said that Microsoft is spending a lot of time, money and energy on this right now.

John said:

“when Microsoft thinks about the building blocks that make-up the cloud, virtualization is a core piece of the puzzle. However you also need also identity services, Operating system with standard set of libraries to tap into… or remote storage that application developers will tap into.. Developers will consume these set of services, but you will also need a set of tools to manage your physical, virtual and geographically distributed datacenter infrastructure.” (that is where ScienceLogic comes in!!)

He went on to say,

“In some ways, virtualization enables decentralization – allows you to move from data centers, enables fast scaling out, business to move from on premise to the cloud and off again…. Automation is very important – this will help you scale your business – this is core to your future success.”

He talked about a new breed of knowledge worker: He called them Digital Natives (compared to grey haired guys like me who are left out of this category).

Definition of a Digital natives? A young adult who has grown up with cellphone, web based applications, Facebook account, as their primary mode of communications.

John commented that we are 5 years into a 10 year journey. Only 12% of all servers in the world are virtualized today… in the next 4 years it will double to 25%. This is the time to think through how this business will affect you.

‘Virtualization without good management is more dangerous than not using virtualization in the first place.” Thomas Bittman, Analyst Gartner

Patching and provisioning nightmare – no scalable administration – sprawl chaos.

John posed a question to the audience: How do you partner to provide the ISV support in application development with specific market needs… partner by keeping the hosting to SaaS solution providers up and running and provide the quality of service that their customers expect…. Complimentary services of storage and backup is a big win with a huge market-upside over the next 5 years..

John said that Microsoft continues to make  huge investments with Managed Service Providers.

• Investing in the windows hosting platform
• Hyper V and SQL2008 GoLive program - getting beta code out to service provides to find as many bugs as early as possible.
• Software + Services (S+S) incubation center program
• Partnering for cloud platform market offers
• Cloud platform guidance and best practices

During the Q&A, David Burns from Cincinnati Bell asked the very best question… “when are you going to make it easier for the Service Provider market to deal with the Microsoft Service Provider Licensing Agreement (SPLA) quarterly statistics pull and change the SPLA pricing to be more efficient and creative for the new Virtualization and Cloud offerings you have talked about?”

John’s response: “We hear your frustrations loud and clear and are working on some new ideas for the future version of SPLA.” My interpretation – “Dear Service Providers don’t expect anything new or easier to deal with in the next 6 months!”

His closing remarks: “Cloud is evolving = very early stages, lots of hype, but think of how this evolution will effect your business and how you can plug into it.”

Yesterday, they posted a terrific blog post about what they saw at Interop. Fortunately, ScienceLogic was one of the technologies that they highlighted from the show. I have written earlier posts about how difficult it has been to gain smart, insightful coverage for our solutions with technology media.

I have to say that they really got it! And it feels so good. We know that we have a bit of a hidden gem of a product here at ScienceLogic and will be working overtime in the coming months to take our business and products to a “Blue Ocean” environment that will shock and surprise many others in the media. However Sevick and Wetzel will be amongst the first to get a close-up on why and how we will deliver a new paradigm to this marketplace in 2009!

A few excerpts from their post:

“We noticed yet more specialty network management vendors, leading us to wonder how the market can support such a plethora of them, and we felt empathy for IT teams that have to master yet more interfaces.”

“Application performance management and application acceleration vendors were well represented. Such products play well in today’s climate because they allow enterprises to get the most out of existing IT investments instead of buying more “stuff”. One particularly interesting vendor we talked to was ScienceLogic. They are integrating IT infrastructure and application monitoring into a single, not-very-expensive platform that will serve mainstream business well. This is smart, and we predict they will give the CA’s, BMC’s, HP’s and IBM’s of the world a run for their money.”

Check out the blog post here and keep App Performance View on your radar..

Dan described the Managed Hosting and colocation sector as “on fire” The sector is humming – incredible growth, outstanding execution, blowing away expectations. I must say, looking back 5 years ago after the tech bubble collapse, I can’t believe how strong the sector bounced back from those very difficult times.

His presentation was focused on a future, and a longer view for the industry. The HTS conference is packed this year with the largest attendance of Datacenter owners, Managed hosting and colocation companies ever to attend this conference.

• Demand steady or increasing in all markets, driven largely by capex constraints and greater awareness and choices.
• Supply is growing more slowly in the past 18 months as the credit crunch has hurt the ability of providers to expand ( it is very hard to get mortgages, loans only on new datacenter projects). Expansion build-out of existing shells is occurring, but very little on spec.
• Demand Growth of 15% in 2008. (Steady and increasing in the out years) However after supply growth peaked at 7.5% in 2007 supply growth now has slowed to 5%
• Dan believes that supply growth will pick back up again in 2011

Conclusions – supply is tight, demand is high and growing…this very good news for the industry.

• Some other trends:
  • The green initiatives are more than just a trend as datacenter owners who don’t figure out how to maximize power efficiency will be painted as villains.
  • Internet traffic and services consumption are linked as Internet traffic growth has been doubling every year (2005-2007)
  • Prediction: 2011 -2012 - internet traffic will get an exaflood – it is coming with a new breed of applications (set to boxes HD Video, games, etc.) that will drive new traffic patterns. Growth driven by consumer broadband + applications (HD video) applications, which in turn will drive demand for Managed Hosting / Colocation Services…

Managed Hosting Services Highlights

• Incredibly fast growth 30%+
• $10 Billion worldwide revenue by end of 2008
• We’ll keep growth pace until at least 2011
• Good news, Dan believes that fears about slowdown in growth are wildly overblown.

Why is managed hosting growing so fast?

• Demographic shifts – new breed of IT employees that embrace outsourcing
• Growth in internet applications (SaaS) The acceptance and growth of browser based applications has been enormous!
• Ambiguity between web hosting and managed hosting has turned positive

Dan’s Key success factors managed hosting and services

• High margin services – and not too many – it is so tempting in our day to day business when a customer comes along and wants to come and give us money for a unique on-off service… at this point the answer has to be no – or do it through a partner.
• High level of support delivery is critical – don’t cut pay in support people or outsource support to save a nickel… what you are selling is support. Keep doing this well or you will head into a bad place… just as examples in retail like Home Depot and others who have struggled with customer service challenges – the whole business starts to slide into the toilet… High levels of support delivers a strong word of mouth buying cycle

Final thoughts, the industry is healthy and will continue to thrive. Customers are looking for the one stop shop, one company that is a trusted advisor to the customer. As customers place more eggs in the Managed Service bucket, the industry will need to tighten-up those SLA’s. Today some parts of the industry have been getting away with loose SLA’s… as customers get more sophisticated and have more on the line, they will become more demanding and require robust multi-component SLAs and back-it –up.

What’s really set me off this morning is the back and forth on the flight time. I know that there are many things that can cause a flight delay, but to move the departure time, in both directions, four times within one hour, how is that possible? I can only imagine the reaction of ScienceLogic customers if we announced the release date for the next version of the product and then proceeded to change it four times that week. There really isn’t another business in the world, other than the airlines, that could get away with this.

Assuming I eventually get to Interop NY, I will be on the look out for vendors that are working on ways to send me to my next meeting over Gigabit Ethernet!