Automation's the Name of the Game

Automation makes all the difference in a data center, which is why BMC, CA, HP, and IBM are spending heavily to get in on the action.

Strange things are happening in the field of data center automation, where Big Enterprise stalwarts BMC Software Corp. and CA Inc. recently made strategic moves: BMC with last month's acquisition of data center automation specialist BladeLogic (valued at an eyebrow-raising $800 million) and CA, just last week, by a deal with IT process automation specialist Opalis Software Inc. to shore up its own data center automation stack.

Why the focus on data center automation (DCA)? Why are management powerhouses such as BMC and CA -- not to mention Hewlett-Packard Co. (HP) and IBM Corp. -- making such efforts to flesh out their data center automation stacks?

Industry watchers say it's all part of an overall move toward automation at all levels. "The key trend in IT management software spending will be the widespread adoption of IT process automation technologies across the whole IT management software spectrum," write Jean-Pierre Garbani and Thomas Mendel of Forrester Research.

There's a financial incentive, too. "Organizations around the world will spend more than $140 billion dollars this year running data centers," said BMC president and chief executive officer Bob Beauchamp, in a statement that coincided with BMC's acquisition of BladeLogic. In Beauchamp's account, automation is what separates data center winners from losers.

"Automation is the only way IT can bring this spending under control and still meet the reliability and time-to-market requirements of their businesses," he argued. "BMC's acquisition of BladeLogic will create the new IT Service Automation leader, unique in its ability to provide these critical capabilities. It is a natural and very significant next step in our vision of Business Service Management."

Actually, BladeLogic is BMC's second big DCA-related purchase. Last July it purchased RealOps, a best-of-breed automation specialist. What's more, BMC last October picked up a tangential player: compliance and governance specialist Emprisa Networks.

CA's move, on the other hand, comes after months of speculation about when -- not if -- it would take the data-center-automation plunge. There were rumbles last month, for example, after BMC ponied up $800 million for BladeLogic: sources indicated that CA -- which had maintained a mostly measured mien in an otherwise convulsive data center automation space -- might get a lot more voluble in the coming months.

Last week's deal with Opalis is one example. CA also touted a recent Forrester Wave market survey which lists it as a "Leader" in the DCA segment. The Forrester report isn't all roses for CA. Lead analyst Evelyn Hubbert ranked Hewlett-Packard Co. (which catapulted into automation superstardom with its acquisition last summer of DCA powerhouse Opsware) as the overall market leader -- followed closely by BladeLogic and BMC, which (as of last month) are now one company.

For the record, CA trails IBM -- and clocks in ahead of competitors Novell Inc. and mValent Inc. -- in the overall data-center-automation segment, according to Hubbert and Forrester. It does, however, place among the DCA top five, and last week's deal with Opalis could help it improve its showing.

Why Opalis? CA officials stress there are already multiple integration points between that company's IT process automation technology and CA's own data center (or workload) automation solutions. That should make it easier for CA to incorporate Opalis' technology into its nascent DCA product line. The Opalis technology uses a so-called "enterprise services" architecture to automate processes and workflows. That makes it very partner-friendly, according to officials from both companies.

Collectively, the Opalis software addresses most of the major management issues, including virtualization, provisioning, ITIL, disaster recovery (DR), consolidation, and -- of course -- security.

Competitively, making some kind of move was essential for CA, which Forrester says sits atop the list of "megavendors" in the systems management space. With BMC demonstrating an estimable ability to put its money where its mouth is -- i.e., its stated goal of being tops in the business service management (BSM) segment -- and with HP and IBM both either notching acquisitions (HP with both Opsware and Mercury Interactive) or kicking off ambitious R&D efforts (Big Blue, with its still-gestating autonomic computing push, as well as its academic partnerships) -- the pressure is on CA to act.

It must act quickly. "BMC Software, CA, HP, and IBM are increasingly dominant at the top of the pile. The four megavendors are increasing their share of the IT management software market by acquiring smaller companies," write Forrester's Garbani and Mendel. "In 2007, they represented 43 percent of the market. HP's acquisition of Mercury alone represented a significant gain in market share for the big four. All four companies now cover a portfolio that spans all 12 IT management software categories."

Over the last three years, however, CA's market share has declined (albeit by just 1 percentage point), as has BMC's -- even as both IBM/Tivoli and HP have grown. (HP, in particular, has nearly doubled its share of the IT software management market since 2005.) In this respect, the Opalis deal lets CA neatly plug a hole (that of IT process automation) in its still-coalescing DCA product line without spending a lot of cash (à la BMC and, especially, HP, which paid $1.6 billion for Opsware last July) in the process.

Also in the Fray: BMC

Likewise in the fray is BMC. With its BladeLogic, RealOps, and Emprisa acquisitions -- not to mention its acquisitions of Marimba and Remedy a few years ago -- it's well-positioned to challenge HP for DCA market supremacy.

However, BladeLogic -- which Forrester once ranked as the number three independent DCA player -- is a special feather in BMC's cap. "With several integrated products, [BladeLogic] automates the lifecycle of data center server and application environments with disciplines such as asset discovery, software provisioning, patch distribution, configuration management, and compliance auditing," writes Andi Mann, a senior analyst with Enterprise Management Associates.

"[BladeLogic] also provides specific differentiators, such as close ties between its application release management capability and BMC's closed loop change management capabilities, fast implementation and time to value, and particular competence in configuration audit compliance and remediation."

The upshot, EMA reckons, is that BMC -- assuming it's able to successfully assimilate the BladeLogic assets -- could become a DCA juggernaut.

"BMC continues to lack some specific capabilities [such as storage automation], [but] this acquisition brings it into a very competitive position against HP, while putting significant competitive pressure on other vendors … [such as] IBM and CA … [who] both have strong lifecycle management solutions," says Mann, who notes that the market success of both Opsware and BladeLogic "is testament to [the] historical inability [of established players such as CA, HP, and IBM] to fully satisfy market needs."

The acquisition was also notable for another reason, Mann argues: it takes an attractive player -- and potential acquisition target off the market (thus rendering it inaccessible to BMC's competitors) -- and at the same time creates a DCA gap of sorts.

"While several vendors brand themselves as 'Data Center Automation' providers, such as Stratavia, Levanta, Opalis, etc., they deliver a different subset of DCA disciplines from Opsware or BladeLogic," he indicates. "With no quality acquisition targets that match Opsware or BladeLogic, CA and IBM need to focus primarily on internal development to remain competitive in this space. Other aspiring solution vendors such as Symantec and EMC face being squeezed out of this space altogether."

Industry seer Gartner Inc., for its part, picked up on a similar thread: namely, the inability of conventional systems management offerings to address changing customer needs. In this respect, Gartner analysts argue, BMC's acquisition of BladeLogic represented a major "concession" of sorts.

"[T]he acquisition … represents a concession by BMC that it has been unsuccessful in leveraging its own technology in this market -- in this case, from the Marimba acquisition," write Gartner analysts Ronni Colville and Donna Scott. For this reason, they argue, "BladeLogic will be BMC's primary strategy for managing data center server configurations, while Marimba will continue its focus on PCs and distributed servers.”

BladeLogic, Colville and Scott maintain, addresses "the full life cycle of server provisioning and [configuration management] in its flagship Operations Manager product." In addition, they note, BladeLogic gives "BMC a new buying center entry point that had escaped the company until now -- the server engineering/administration group."

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