A guest post from Rhett Glauser, Service-now.com director of communications. Rhett has spent a decade talking and writing about the IT management industry from the perspective of companies like Service-now.com, Symantec, Altiris and Lineo. These days he spends most of his time communicating the benefits of modern IT service management applications, software-as-a-service, and IT best practices like the IT Infrastructure Library. For more info, Google “Rhett Glauser”. We invited him to post his thoughts about the recently announced BMC help desk offering.
Yesterday BMC announced they decided to try and build their very first IT service desk application. Since they purchased their first two service desk apps, we consider Service Desk Express on Force.com to be the first ITSM app they will build all on their very own. Wait a tick, BMC is building this app on Force.com and it seems Salesforce.com is doing all the heavy lifting. So they have a little help from a friend.
In a major coup for Salesforce.com, and cloud computing / SaaS generally, the old guard ISVs are FINALLY acknowledging there is a better way. Force.com has become the platform of choice for at least BMC and CA. We’d make the argument that the platform is the core secret sauce of any business application. BMC just outsourced their secret sauce to another software vendor, not that there’s anything wrong with that assuming they don’t have any other options. Again, this is great news for Salesforce.com and SaaS momentum.
But for BMC does this spell the end of an almost two-decade run for Action Request System (ARS), their own development platform? So much for eating their own dog food. We always assumed customers pay an application vendor for their expertise in building software. So far, BMC has taken customer investments and purchased a couple of technologies and outsourced the development of another to Salesforce.com.
It is no secret that these are desperate times for many legacy enterprise application vendors. Service-now.com has been taking significant business from BMC, HP, CA and IBM by providing a powerfully simple, customer-friendly enterprise ITSM app. The big four have not had an answer for modern SaaS and even after yesterday’s announcement, BMC will still be looking for an answer in the enterprise market.
To understand the present situation we have to understand the history. BMC has spent the last few years dancing around a dual go-to-market strategy for their Magic (Service Desk Express) technology and Remedy acquisitions. Publically, Service Desk Express was to be the SMB offering while Remedy was to be the enterprise play. Privately, Service Desk Express got the short end of the R&D investment stick and is at best a BMC afterthought. Its revenues have declined since being acquired because BMC has incented Magic customers to switch to Remedy.
Enter BMC IT service desk application number three. Given what we know about the current version of Service Desk Express, why not rebuild it in the cloud and see what happens? This move probably won’t threaten the Remedy cash cow.
BMC doesn’t have anything to lose…or do they? They need to be ready for the onslaught of questions about the focus of BMC development resources and about their even more complex go-to-market strategy. These questions will come from both Remedy and Service Desk Express customers and channel partners.
Yesterday BMC was giddy at the thought of being able to tell customers and prospects, "Now we’re like Service-now.com!" We welcome them to the SaaS party but let’s be very clear about which party they’ll attend.
For many reasons, BMC can’t rebuild Remedy in the cloud and they would be crazy to position Service Desk Express on Force.com against Remedy. So by default, Service Desk Express won’t compete against Service-now.com in the enterprise ITSM market.
As far as we’re concerned, BMC just squandered an opportunity to truly compete with Service-now.com by not going all in. Does BMC have another SaaS trick up their sleeve? We doubt it. For legacy software vendors, SaaS is not an easy nut to crack for business, organizational, technology and cultural reasons. We will continue to take significant market share from BMC Remedy by simply providing IT organizations an option that makes their lives easier.
Either variety of BMC Service Desk Express is clearly not a threat to Service-now.com. BMC will become familiar with Zendesk and Beetil as two examples of extremely innovative IT service desk SaaS vendors who target the SMB. These vendors understand customer service and support, have a culture that fits the model, and have legit, modern SaaS applications for SMB IT service management. As far as we can tell, the real Service Desk Express on Force.com competition already has many passionate and satisfied customers, and for good reason.
Cross posted on the Service-now blog.
Good commentary. I especially noted your “For legacy software vendors, SaaS is not an easy nut to crack for business, organizational, technology and cultural reasons.”
I hover between being surprised about his and unsurprised. Surprised they still find it so hard, but unsurprised because it’s a typical structural change which has killed larger organisations in the past for all the well known reasons.
I’m no expert on Remedy – would you mind explaining this comment more – “For many reasons, BMC can’t rebuild Remedy in the cloud and they would be crazy to position Service Desk Express on Force.com against Remedy.”
Thanks, Walter Adamson @g2m
http://xeesm.com/walter
Walter,
A few years ago BMC acquired the majority of market share in IT service desk applications when they purchased Remedy from Peregrine Systems. It is a two-decade old technology that has been loved and hated by thousands of IT organizations around the world.
Until recently, there were only a couple of other equally old ITSM technology alternatives from HP and CA. Service-now.com entered the market about five years ago with a new, modern SaaS alternative and has been taking market share from the big 4 IT software vendors ever since.
First there was Salesforce.com vs. Siebel and then there was NetSuite vs. SAP. Service-now.com vs. the big 4 IT software vendors is the latest chapter in the story of modern SaaS changing a software vertical for the better.
The principals are different but the principles are all the same. BMC can’t rebuild Remedy in the cloud for the following reasons:
– Declining maintenance and service revenues attached to the on-premise model are still a cash cow. BMC is afraid to touch the revenue that makes up the vast majority of the BMC Enterprise Service Management revenues even though new license revenue is dropping significantly. BMC answers to shareholders and investors who keep a close eye on the cow and anything that threatens the cow.
– The BMC culture is one of acquire and maintain. Rapid, agile and iterative innovation is a foreign concept to most legacy software vendors.
– The BMC sales and marketing organization was built to support an on-premise perpetually licensed application. It takes time and space to turn a super tanker. Their channel organization and partners are generally no different.
– The Remedy technology is almost two decades old. Do I need to say more? Modern SaaS is just as much about the licensing and delivery model as it is about the modernity of the application.
I hope this answered your question. Best regards,
Rhett
Service-now.com
@rglauser
Rhett is right, Walter. There is no way that BMC can take Remedy for the cloud without rebuilding it. That is going to be an engineering feat! Not sure if they want to take that route right now. I do believe that it is high time these companies reinvent themselves for the coming age!