Yesterday, several Saugatuck analysts were given an update by BMC on its progress in the SaaS market. We have been following BMC’s move into SaaS since their announcement last year (see Saugatuck Research Alert, 699RA, “BMC’s ITSM Suite On-Demand: IT Management Joins the SaaS Rip-and-Replace Derby”, 3Feb2010).

The “Big Four” in IT management (i.e., BMC, CA, HP and IBM) have dominated the market for on-premises tools for more than a decade. Recently, mounting pressures from the growth in adoption of Cloud Computing, the sluggish economy, and new, Cloud-based alternatives have challenged their positions. BMC has responded with Remedy OnDemand and RemedyForce (built on Salesforce.com’s Force.com platform). According to BMC, the combined offerings already total over 100 customers. Our perception is the Salesforce.com relationship (where SFDC is key to driving indirect sales) has been particularly beneficial for BMC.

Yesterday, Saugatuck participated in a teleconference update for IT analysts hosted by IBM. The session communicated IBM’s strategy to pursue the market opportunity in “Big Data,” and IBM’s view of the challenges posed by IT organizations striving to derive tactical and strategic insights from the data they are capturing. For Saugatuck, this session raised important questions/issues regarding why “Big Data” is a big deal in the first place.

Many articles and analyst reports have focused on the significant expansion in data collected and stored by IT organizations. The causes for such growth range from the continuing decline in the price of recording media to the increase in the types of data that can be stored (digital video, VoIP). In essence, data is increasingly being stored for two broad reasons:

Let’s emphasize right up front that Cloud services, including those of AWS and Sony, are still among the most reliable types of IT in the world. But they are, still, IT services; therefore they will suffer outages, programming errors, network problems, natural disasters, ad infinitum. Bad Things will continue to happen. Yet so many in business and IT (and the associated trade media) continue to act surprised when problems occur.

While the AWS and Sony events were dissimilar in many aspects, there are still several lessons we should take away from them together.  These are as follows:

I’ve just finished reading a series of blog posts and Tweets by analysts, journalists, and even Cloud provider executives on the partial loss of service experienced by Amazon Web Services early this morning and into this afternoon (US EDT). Bloggers and tweeters seemed to stumble over themselves in their pursuit of apocalyptic phrasing to describe the horror of losing part of a server farm. “Failure” was the most widely-used term. Even Cloud providers got into some trendy, disaster-oriented phrasing: "Right now, it looks like a complete network meltdown," according to a tweet by George Reese, a founder of Cloud services provider enStratus.

At some point, most pieces also seemed compelled to raise the negative possibilities inherent in Cloud IT usage. Betanews summed it up best with the following paragraph: “Wednesday's issues also highlight the drawbacks of taking it ‘to the cloud’ vis a vis having one's own IT infrastructure. While a considerable amount of overhead is cut out by outsourcing, companies and services who depend on it for its operations are at the mercy of these cloud computing providers when problems arise.”

What Is Happening? — Epsilon, a wholly owned subsidiary of Alliance Data and a top database marketing services provider, recently issued a press release regarding a recent data breach. Clients affected included several large U.S. companies but, according to Epsilon, only the names and email IDs of customers of these companies, as well as the email IDs of College Board students, were accessed.

EMC subsidiary RSA, a provider of security solutions, also recently announced that information that could potentially reduce the effectiveness of its security solutions had been stolen. RSA's authentication systems are currently used by over 20,000 large corporations and governmental entities, including the US military.