New Business Model Service Versus Product

At present, software vendors still generate the majority of Web site management products, which have comprehensive capabilities that provide testing, internal performance benchmarking, and site monitoring management tools. However, those considering an investment in an enterprise management system should consider the new business model in town. While vendors have traditionally productized enterprise management, the market for network, systems, and Web site management can now be segmented into service and software.

Luminate, for example, initially sold enterprise management as a product, but is now trying to reposition it as a service. As it moves from a pure enterprise application software provider to a service provider, it is managing applications and the Internet infrastructure. The MSP offers a series of services that let IT managers monitor the health of their E-business infrastructures, using a small downloadable tool and a subscription to Luminate.net.

The MSP is giving away a sizable piece of its offering by letting customers download its Mamba performance monitoring tool for free. The MSP expects that buyers will then plug into more advanced tools online for a monthly fee.

Mamba's package of Web server software and Java servlets tests events, performance, and availability. It can automatically discover network assets and do real-time testing — without a major deployment and without installing agents. Thousands of copies of Mamba for SAP R/3 have already been downloaded. Luminate also offers Mamba for Windows NT and Mamba for Oracle databases. Prices range from $50 per server per month for the Windows version, to $350 per server per month for R/3, to $500 per server per month for Oracle.

To motivate Mamba users to become paying customers, Luminate provides small software bundles called "energizers," by which the software communicates with Luminate.net. When customers plug into the Luminate.net site, they obtain expanded views of the data that Mamba collects, including graphical reports of performance over weeks or months. They also receive daily e-mail hotlists, which indicate trouble spots in the enterprise.

Via Luminate.net, subscribers can drill down into specific reporting areas, and access a library of help and support files. The service allows customers to monitor effectively, and retain important data, which would otherwise be very time-consuming and difficult to do.

For its part, major MSP Keynote has an approach that sells only services — not software. And NetSolve offers management services that focus specifically on network performance and availability, rather than application behavior. As for the main enterprise management vendors, they will either buy management service companies, or provide a management service with their own tools, as an offshoot of their services organization, thereby productizing it. However, this is not their strong suit.

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