Bill Keyworth pioneered the development of IT service management as a means of maximizing business value. In this interview, he discusses that experience and shares his views on various tech and marketing trends.
Seeing the future of business technology is a strong suit for Bill Keyworth. He was one of the first to recognize the need to connect the steadily accumulating silos of corporate technology and tie their value to their effect on the business. This vision led him to a role as a VP and research director at Gartner Group, where he created the Network and Systems Management service. He was an early proponent of ITIL and its formalized standards and best practices for managing corporate technology. Now he has returned to an analyst role with Ptak, Noel & Associates. I had a chance to talk with him about a range of his favorite topics, including technology marketing, current trends like cloud computing, and the relationship between a handful of battleship enterprise software conglomerates and their high-revving startup acquisition targets.
Note: This article is also available as a PDF download.1. Jeff: In the 1990s, you were among the pioneers who recognized the need for connecting the three areas of service, asset, and change management, and you were in a position to influence the way that would happen. Could you give some of that history? Bill: At that time, I was immersed in something called "network management frameworks," which was a system for tracking network status and comparing it with a benchmark history. We wrote up a proposal from Digital for this idea to the Open Software Foundation and ended up getting beaten out by a little company called Tivoli. Their idea was to combine the resources of 11 vendors to do what we were offering. That coordinated-efforts approach ultimately won out and Tivoli became the dominant force in management framework at the time. But the experience I gained in that area was what interested Gartner, and when I arrived there, a great number of their clients were asking about network management.
I saw the importance of these frameworks, but the processes within the IT department and the positioning with the customer led me to come up with the term "consolidated service desk," to pull the service, change, and asset management areas together. The service and financial discussions with Joe Pucciarelli, who is now at IDC in Boston, provided the basis for some of our groundbreaking research in the late 90s. Then I got a call from Peregrine, and there was the feeling of that once-in-a-lifetime opportunity to change the rules of the game. They understood the strength and significance of this whole consolidated service desk concept, which we now call "IT service management." We quickly became the dominant force in the industry at the time. There were initially three companies in Gartner's "leadership quadrant:" Peregrine, Software Artistry, and Remedy. In the three years I was with Peregrine, we acquired both of those other two companies, so we were the sole player out there saying that this integration of service, asset, and change management was going to make a major difference in the way IT management is done.
Unfortunately, right at that time Peregrine came into some legal problems and things went into a meltdown overnight. The pieces were all broken out again. HP acquired the main Peregrine solution, the Remedy part was bought by BMC, and Tivoli service desk, the Software Artistry piece, was ultimately replaced at IBM through the acquisition of MRO Software. So that's a brief history of what was going on as service management was just starting to take off.2. Jeff: One of the areas where things are shaking up today is cloud computing. Where are we in Gartner's "hype cycle" with cloud computing and what expectations should we have for what it can do for us? Bill: Well, the first problem around cloud computing is knowing exactly what the term constitutes. Everyone accepts that it means providing infrastructure as a service to speed up provisioning, and there's a significant value proposition in that aspect. But now it has morphed into something beyond that. For example, if the business community becomes willing to bypass IT and contract with services as an operating expense rather than a capital expense, that changes things. You've got to ask, "What about the business applications that use that infrastructure service?" Salesforce.com, for example, has forever changed the customer relationship management arena. But there is no clear definition, even among experts, as to what cloud computing is.
Any new technology goes through this hype cycle, though, and frequently there's a big push to deliver the new technology and then follow up later with the questions. For example, if you're committing to guaranteed availability, it means you have to include capacity planning to ensure you'll be able to meet a varied range of peaks and valleys in the demand. Capacity planning is an example of a fairly new discipline within the distributed environment. But to make guarantees to a business whose revenue is dependent on the availability of these services, you need to be able to meet that kind of resource commitment.
Another example is service level management, where you make commitments to the end user, and the price is based on that service level. So management stands to be a contributing factor to the elimination of hype around cloud computing. Do I think it's pure hype? No, I think cloud computing is a legitimate technology whose time has come. But there are some things that cloud providers aren't paying adequate attention to in terms of the demands of the business customer, and one of these is management.3. Jeff: To go back to the topic of defining terms, how do you see the relationship between network management and system management? Bill: Interestingly enough, when I was hired by Gartner 15 years ago, they wanted to call it all "systems management." At that time, systems had to do with the processors, and networking was just a subcomponent of it. Then we started getting into the realm of systems that were networked, and that became known as "the system." So we started calling it "networked systems management," where a system includes a large number of components that are networked together. It's a lot of semantics, but network management is a critical piece of service management, as well as the system itself, the application, and the data storage, and the important thing is to manage all of those components as an integrated system. 4. Jeff: What fundamental question does business service management answer? Bill: Last year, when we started the BSM Review, we found there were a lot of competing definitions for that term. For the large part, the vendors have been allowed to do the defining. For example, BMC took an early lead with the term BSM but has focused it on traditional IT service management processes, which are closely connected with ITIL and tie into the configuration management database — the CMDB. On the other hand, IBM has pushed back and said it's much broader than that and they're promoting "integrated service management" to better align business and IT. IBM does have a product line called Business Service Manager, which deals with application performance monitoring. Then you have HP, which emphasizes "business technology optimization," and CA, which presents "service portfolio management."
Right now, we've delivered a BSM maturity model that includes IT activities, technologies, metrics, processes, best practices, and people with meaningful context for the business technology user. It involves the whole package of what it takes to deliver technology to the business community. So far, most of the work around BSM has been driven from the IT perspective, as in "If you reach X level of maturity in how you deliver technology, you're going to reach business maturity." That's just not true. The business needs a stable, predictable environment.
Think of a utility company that generates power and needs to be secure and reliable. Then compare that with a retailer who needs a significant online presence. Their needs for business service management are totally different. The utility company wants a stable, secure environment, while the retailer wants to establish competitive differentiation and accessible, collaborative discussion with its customers. The important element is that the business drives the maturity discussion, and IT responds to that need. The decisions have to continue to happen on the business side, as a result of the success with which the technology meets their needs.5. Jeff: ITIL gives us a common language and the means to establish best practices. How would you compare the United States with the rest of the world in the acceptance of ITIL? Bill: ITIL is enormously beneficial in making recommendations on how to accommodate best practices and processes. It is not a strict methodology or a check-off list you can follow to systematically solve problems. IT departments are going to use different elements of ITIL based on their business needs. I think one of the handicaps of ITIL has been people looking at it and saying, "Here is the path to a Malcolm Baldridge Award for BSM success." It's a set of best practices to learn from and interpret for your unique environment.
Europe got involved in the late 90s, and North America did not. I would get process questions at Gartner from the European community, and I could refer them to ITIL, and they were familiar with it and receptive. In talking to North American customers about best practices or processes, I found that they were looking for a hammer — a tool to solve problems. Now I think North America has caught up in terms of the basics. Europe is much more mature in its view of ITIL processes, and version 3.0 is a major step forward. Especially in its creation of a common language, ITIL has done a great deal of good.
One of our BSM Review experts, Malcolm Fry, can apply common sense and humor to talking about ITIL. I was just talking with an IT director this morning about the Japanese idea of "kaizen" or continuous improvement. You crank up the assembly line until something stops working and then you identify it and fix it. Then you crank it up again and speed it up until something else fails. And as you continue to do this, you get significant improvement in the manufacturing process. Malcolm's idea of ITIL Lite is that kind of focus on finding the area of greatest pain, the greatest wedge between you and your business customer. Get that resolved, and then move to the next pain point. That approach allows you to prioritize and not let ITIL become this behemoth project management experience with a two-year wait until you see any tangible return.6. Jeff: If you were to step back into your role as research director at Gartner, what main trends and questions do you think IT directors should be asking themselves as we head farther into 2010 and 2011? Bill: The primary question would be, "What is the biggest frustration of business with technology?" and then satisfying the business requirements so that the business understands the benefits of IT, like system availability. It's Boolean at that point; people can't work when the system is down. There's a lot of frustration with IT at the moment, and the cloud computing option is an example of how business is considering alternatives to dealing with IT as an obstacle. The success of Salesforce.com is a result of marketing bypassing the technology department to get the tools it needs to do its job. The trend is going to be for business to define what it needs, and the alternatives have to be packaged in that context. Another trend is that a few megavendors in service management offer a tremendous breadth of solutions. That's great, but I think the innovation that will drive the way business service management is delivered will ultimately come from smaller companies, and then those will continue to be bought up by the bigger companies. 7. Jeff: Let's say a company sees the value of a configuration management database. They look at the Wikipedia definition and it says you can use a CMDB to keep your metadata current, and they want to do that. Can they realize the value of a CMDB without pursuing the whole ITIL framework? Bill: Sure, they can do a CMDB without ITIL, but they will still have to find a way to address the processes that ensure that they are capturing, discovering, and monitoring their environment along the way. For example, there are change management processes that need to be implemented to be sure that what you have is current. Without a change management piece, you could go out and make the assessment today, and it could be different tomorrow. It doesn't have to be the ITIL change management process, but you need to do some kind of change management. And best practices in other areas, like discovery or authentication, are additional recommendations you will need to consider in one way or another. 8. Jeff: After spending a good deal of time in marketing, how would you compare the marketing of technology to marketing other products or services? Bill: Well, I know a lot of what I did in my MBA program had nothing to do with what I do in the real world. When I studied marketing in school, there was an emphasis on consumer-oriented marketing. There wasn't a great deal of background on business-to-business marketing at the time. One of the main things I've found about technology marketing is that most often it's a B2B discussion, which is focused on vertical markets and value propositions to entities within the corporation. Product brands for consumer-oriented goods, like Cheerios or Ford, is very different from branding in technology.
There's also the chasm in technology marketing, as Geoffrey Moore points out. You have early adopters and early majority and late majority, and your messages to each of those are entirely different. At Peregrine, we had been selling into the enterprise IT market, which is horizontal and sophisticated. I would be talking about change management with an early adopter. They were the only ones interested in that. I had to talk about service or asset management with the early majority prospect.
Technology companies go through different stages. Starting out, it's product-driven, and they just want to get one customer. They believe the world is going to beat a path to this better mousetrap, and you need to get the product developed. But then you get to the second phase, where you are revenue-driven and you do whatever is necessary to drive sales. You want lots of customers, and you accept anyone as a customer. The sales organization is driving the company at that point, and they are looking for leads and demand-generation marketing. The third stage is where the company gets to a market-driven approach. You understand what the customer is looking for, and you are all about making the customer the driving force. Marketing is very strategic at that point. The messaging is focused on the problem of the customer, and your sales force transitions to becoming farmers rather than only hunters. Which stage you are in has an enormous impact on how you handle your marketing. So it goes from product focus to revenue focus to customer focus, and each of these has a different value proposition.9. Jeff: I'd like to get your take on metrics. What you measure is what you get more of, so do you find that most of the companies you are working with are measuring the right things? If not, what should they be measuring? Bill: The IT departments I've worked with are very focused on metrics. I think they do a good job of satisfying the areas they are being measured on; but if they were using the right metrics, there wouldn't be this disconnect between business and IT. So to answer your question, most companies are using the wrong metrics. There is a basic set of metrics you need to adhere to in order to run an effective IT department, and those are being used in most companies. The business doesn't care about that set of metrics. But if you explain that having two or three nines of uptime means an hour or two of downtime a month, they know they don't want to accept that. Going to four or five nines has an incremental cost associated with it. Now we're speaking the same language.
Another area is the time to deliver a project. The business usually needs the capability now, if not yesterday, and is not thinking in terms of 18 months. So you reach an agreement in terms of a deadline and are reporting on progress along the way. The business understands automating things is good, yet in some areas IT will need to explain why a certain metric is relevant. For example, an increasing number of changes will heighten the likelihood of incidents that need to be resolved. If that connection between changes and uptime isn't understood by the business, the business doesn't care about unresolved incidents. What we need are metrics that tie technology to business, and the important thing is to find a common vocabulary, primarily for the business community. It's not about finding a magic metric, but an understanding on the part of the customer and the business of what metrics IT is using, and whether IT is measuring the things the business people care about.10. Jeff: For students in school now who are deciding which programs to pursue for a career in IT, what kinds of things would you like to see given more importance and how has that changed over the last five or 10 years? Bill: I see the opportunities overall becoming more significant. When you go to school, you learn about coding and programming and project management, and there's an emphasis on the specific technologies. The people I know who have had long-term success are the ones who have been able to take those skills and become translators to their more nontechnical colleagues and friends, roles like customer relationship manager or business liaison. This person has to understand the technology and its nuances and underlying issues. The advantage is in being able to hear in nontechnical terms and then use the technology to address the problems. That skill will always be needed.
One great example of this is Fred Luddy, who was CTO at Peregrine and then started Service-now.com four or five years ago in San Diego. He can talk fluently with an engineer about the bytes, tradeoffs, and constraints, and then go to the board of directors or customers and tell them what it means in terms of business value. He gains your absolute confidence through the clarity of his understanding of both worlds. It's most common that people who communicate well don't understand the technology, and the technology experts don't communicate very well. So bridging the two worlds is an invaluable skill. I've always considered myself fortunate when I have some of those people working with me.
Bill Keyworth is the editor in chief of BSM Review (www.bsmreview.com) and can be reached at email@example.com.