Over the past several years, Attachmate Corporation has been quietly building an extensive software portfolio. With more than 13 million users around the globe, the privately owned company has been "bridging the divide between open source and proprietary source software." In its big announcement late last year, Attachmate moved to acquire enterprise open source leader Novell for $2.2 billion. The purchase is expected to close this quarter, pending the necessary legal and financial approvals.
In another key acquisition five years ago, Attachmate purchased San Jose, CA-based NetIQ for just under $500 million. The part of the business space filled by NetIQ is enterprise IT management — specifically, security and compliance, identity and access, and performance and availability.
Jay Gardner leads NetIQ as president of the business unit and is responsible for engineering, product management, marketing, technical support, sales, and operational functions, as well as the unit's market vision and business strategy. For almost two decades prior to the NetIQ acquisition, he worked his way up through the ranks at BMC Software in Houston. He served as VP of sales for North America, Global Operations, CIO, and VP & General Manager of BMC OnDemand. Before joining BMC, Gardner spent 10 years in various management and sales positions at IBM. As a result of his leadership in the technology industry, he was named as a finalist for the prestigious Gartner CIO Choice Award and was recognized by Computerworld as one of its Premier 100 IT Leaders.
Jay spoke with me recently about the challenges faced by technology end users in gaining incremental value from their additional technology investments. He believes there is no shortage of challenges when it comes to IT management and the steady stream of new developments every year. The decline in incremental benefits, he says, is a result of the plateau in the adoption curve that leads to failed expectations. He describes how that happens and how NetIQ is helping address these challenges.
Note: This article is also available as a PDF download.1. Jeff: In your conversations with technology end users, how do they describe their current challenges around maximizing the value of IT? Jay: Successes and challenges in business are usually around people and not having enough subject matter technical experts. Going all the way back to some customer conversations as the CIO at BMC, I noticed the question coming up more and more often of whether we also delivered the solutions we were offering as a service. When I sat down and talked with these customers further, I found the reason they were asking was that they didn't necessarily believe they could implement those solutions successfully using their limited internal staff. Initially, that was the driver behind the trends toward outsourcing and software-as-a-service. They saw getting to their goals as being much more related to know-how — to the support and the service. When I started with NetIQ, it gave me a whole new window into customer success. If we're able to provide customers with the resources that take that risk out of getting to the value, they can achieve success more quickly and they're going to come back to us again. The successful customer is the least expensive to sell to and the least expensive to support, and obviously, the most likely to continue to do business with. 2. Jeff: How does that fit in with the failed expectations curve? Jay: The failed expectations curve is really a financial picture of the business case where the Y-axis is value and the X-axis is time. So we're looking at this picture of a certain amount of value over a given number of years. There is going to be a certain amount of deterioration in the value, or at least a diminishing gain, as the adoption curve levels off and you go from the value of implementing to the value of maintaining and improving. What we've found is that a lot of what goes into that customer value is not just the code, but the intellectual property involved in making processes successful. That includes what goes into support, professional services, and the key people who continue to work on the solutions internally. So it often comes down to the talent in the organization that makes things happen successfully or not, and customers' initial business case expectations may not always put enough weight on taking that into account. 3. Jeff: In addition to not meeting expectations, do you see organizations getting surprised by a decline in IT value? Why don't they anticipate or avoid the diminished benefits? Jay: Their attention wanders. It can move to another project. Organizations go through reductions in staff, people leave, people retire, and the expertise they once had is lost. So keeping that fresh talent alive in the organization has to come from either constantly bringing in new hires or getting the expertise from the outside. We have recognized this as a significant need and as a result, have created offerings to complement the internal resources and technical expertise rather than requiring a scoping of a project, going out to find someone and putting them on a statement of work, which has been of great interest. Like software-on-demand or software-as-a-service, it's consulting-on-demand: lining up the subject matter expert over the phone rather than setting up a professional services contract. 4. Jeff: What are the main factors you see leading to this "plateau in value" from IT investments and how can technology-driven companies address them? Jay: Customers rarely have time to question whether they are getting the full value out of their investments. They are too busy fighting fires to even consider this question. One of the main questions my executive team and I look to quantify in speaking with customers is, "Are you getting the value you initially intended and expected when you bought this?" The customers who say yes are the ones who are going to continue to buy and renew. They always let us know. If that's not the case, they outline what their challenges are.
If we need to, we do an analytical health check to get to the root cause, but it usually turns out to be one of a few common factors. It's often just a simple training issue, or it could be a configuration issue, where the wrong options have been selected and just need to be reconfigured. And then it may be a case where they just don't have the internal expert. So we ultimately provide a list of recommendations on what the correct approach might be. There's a great satisfaction in helping to focus attention on addressing the "plateau in value," seeing things turn around once the right resources are applied, and seeing that value equation start to change, sometimes very quickly.5. Jeff: When technology became obsolete more slowly, it made sense to find and compensate specialists to manage and maintain it over a period of years. Does the rate of technology advancement in upgrades or versions pushing to cloud applications change the way external consulting works? Jay: Right now, we're seeing this great movement toward cloud computing, hosted applications, and service-provider solutions where the hardware infrastructure, and even much of the complete software infrastructure and applications, are provided from outside the organization. Business stakeholders are driving this trend. NetIQ is helping to bolster and supplement our customers' in-house staff and expertise through consulting-on-demand professional services in a way that organizations can get the value they need to support these services without taxing capital expenditures. 6. Jeff: What indicators do you look at to determine whether you're maximizing the value of a particular technology investment or when you've overtaxed it? Jay: On the customer side, they are looking for the clear benefits and achievement of the desired results. Their measure is the ROI they see on their investments. One of the big areas for savings is automation of process. If the workloads and people costs associated with doing repetitive tasks are reduced with IT process automation, that's what brings a company tangible benefits. We are very focused on solving this with automation solutions in our products. 7. Jeff: What about success factors for the customers you're working with? Jay: From a vendor standpoint, our fundamental measure is whether our customers are buying more services and renewing maintenance. One of the things we are putting more emphasis on is compensating our sales teams on maintenance renewals. So it's not as much about just selling more licenses as renewability and sustainability of the relationship, and customers like that. 8. Jeff: Are we still in a phase of using point-product applications without the ability to knit them together and get the full benefit of their combined functionality? Jay: I see that integration between the vendors' applications being done better in mixed-vendor environments. You don't very often see that a customer buys only from HP or only from CA. It's much more of a best-of-breed approach with openness and integration between the vendor environments and platforms, and the vendors are working to make sure that their solutions can support heterogeneous environments. It's no longer an assumption that you're going to get a sweetheart deal as an exclusive provider. So I would say the benefits of combined functionality is an area where we've seen a great deal of improvement lately. 9. Jeff: Is new software, especially with high out-of-the-box application relevance, requiring less specialized expertise across the board? Jay: Well, computing is still a complex thing and requires some level of expertise, regardless of how organizations try to get around that fact. Yes, it's important to have ease of use, but not at the expense of being rich in function. As a vendor, you need to balance the out-of-the box capabilities with functionality. What we're looking for are ways to help our customer configure systems easily and appropriately, so that they can get the best customized, configured solution and move to a faster return on investment. But the simplest to install may not include the richness of function that is needed.
NetIQ may not bring the cheapest or the simplest solution, but that is balanced by the richness in function and ease of configuration and customization, as well as the additional expertise some organizations may lack. In the end, to get that success measure that we talked about, the end user has to be satisfied with the functionality, and there is a need for talent and automation in many instances to achieve desired results. For example, in a monitoring solution, we're not just talking about up or down anymore. There are a lot of factors that play into the effectiveness, security, compliance, and reporting on those areas.10. Jeff: With respect to security and compliance investments, what trends are you seeing in terms of solutions bought and value achieved? Jay: Data protection solutions remain a hot item. They protect sensitive data and when they're applied through a comprehensive security program, they yield compliance with the many regulations organizations struggle to address, whether it's FISMA, FDCC/SCAP, PCI DSS, HIPAA, SOX and NERC CIP, or others. I just met today with an executive for a financial services firm, and the amount of complexity just in the reporting required for businesses like that to meet minimum guidelines is overwhelming. One bad experience can cause a serious negative impact. They have no option with respect to ensuring that the right controls are in place for security, history logs, data downloads, and reporting when it comes to their customer data. That inherent complexity is magnified by not doing those things in house, and you start to intertwine external software service applications in a heterogeneous, multi-site, cloud environment.
If you've been to a hospital lately, think of all the reporting and the papers you sign for even a routine visit. What happens to all those documents? Does anyone ever look at them again? More important, are they protected from privileged users and external threats? The bottom line is we're continuing to complicate the data. It is proliferating at a rapid rate. It can be accessed from inside and outside the organization, and it needs to be protected. In my opinion, the increasing complexity you're seeing is likely to continue.
After retiring from BMC in 2006, Jay Gardner soon realized he missed the fast-paced lifestyle of the tech industry. He rejoined the workforce in an advisory role, and three years later received a phone call from NetIQ where he accepted an offer as president and GM. Jay and his wife and six kids are diehard Horned Frog fans of TCU. You can contact him at email@example.com.
Jeff Cerny has written interviews with top technology leaders for TechRepublic since 2008. He is also the author of Ten Breakable Habits to Creating a Remarkable Presentation.