Archive for October, 2008

Lack of action

Wednesday, October 29th, 2008

Sorry for the lack of action on this blog. Been pretty tied up with (a) Deciding on our reaction to the economy (b) Getting through our first board meeting with our new investors (c) Traveling to New Orleans and then Amsterdam for our User Conferences and finally (d) Now I’m back in town, I’m sick!!

Anyhow….let’s talk….

Excitement….our new VP Americas starts next week, oh joy of joys. It’s a big name individual and another defection from what used to be a great company (Mercury) and is now HP Software. Cannot announce officially of course until next week but we are really excited to have him on board.

Economy….we’ve decided to watch our costs in some areas. This is not a reflection of actual business which has continued to be very strong (Q3 results announced soon, I promise!) but more a precautionary measure because of everything that all the analysts and experts are telling us. We’ve actually had a very good start to Q4, and the sales forecasts are really strong but, as I say, we cannot ignore all the advice that’s being given that spending will slow, it would be irresponsible of us to do so.

User Conferences…very well attended in both Europe and the US. Had Gartner presenting in the US and Forrester in Europe together with multiple customer presentations. Really interesting to listen to the online brokerage that presented, their business has “gone through the roof” over the last few weeks – they keep hitting new record trading days. It’s good to know that someone is doing well out of this mess and not just the bankruptcy lawyers.

Goldman Sachs – yes, we closed the investment at exactly the right time for Nimsoft before the market went completely mad and we are really, really pleased with the value that Goldman are already bringing to the table. This is a significant step for Nimsoft.

Also, a major analyst that uses Nimsoft for all their internal IT monitoring needs emailed me about how unbelievable our support was during a recent major event that they held. This is the best kind of present that I get – unsolicited emails singling out people or just praising the company on what we do for our customers. (I hope they tell their analysts!)

Talking of presents, my kids starting building their Christmas lists this week. Can you believe it…it’s October. My son wants an electronic keyboard, Spore, a MacBook, and the iTunes DJ software. My daughter wants a new guitar and TV in her room (preferably a High School Musical one – I went to see HSM3 this week).

Oh well, at least I know that they will change their minds a hundred times between now and Christmas and if they don’t, well dad will have to help them change.

Shall we talk about Cloud computing? Because everybody else is. Next time maybe.

Novell and Managed Objects

Wednesday, October 15th, 2008

Funny that this acquisition has really not garnered much press – bigger things happening in the world maybe.

But, someone asked me my opinion on this as it effects Nimsoft earlier, so I thought I’d share…

By the way, as with everything on this blog, it’s just an opinion – so please don’t get bent out of shape if I say something you disagree with.

I think that what Managed Objects deliver and what Nimsoft deliver is very different. MO do not do any data collection ? they are a presentation layer that sits on top of other monitoring products to bring things into a Business Service perspective. One of the issues with this approach is that it is very expensive (layering more cost on top of existing cost), very ?services heavy? – large amounts of services to implement and administer and all the customer transactions are ?big deals? – which come under more scrutiny and is more difficult to compete with the large incumbents. E.g. If I already use BMC for monitoring why not add BMC?s BSM solutions rather than going with another vendor? This is I think why Managed Objects has struggled to grow their business.

This is exactly why Nimsoft acquired Indicative. We recognize that customers want to drive budget reductions not budget increases, we recognize that yes, customers want to achieve BSM but they don?t want to spend millions of dollars in software and services to do so. We recognize that the reason that BSM has not gained greater adoption is that it is only the ?top few? that can afford it.

Nimsoft?s approach has been to start at the monitoring and data collection layer, making things simple and reducing cost. Then, moving up in to dashboards and Service Level Monitoring and then, with the Indicative acquisition, moving in to BSM. But….when we announce our BSM offering (early 2009), it will be an offering that will dramatically reduce the TCO of BSM solutions ? it will be a market changer in much the same way that NimBUS has changed the market for monitoring solutions.

Managed Objects being acquired by Novell

Tuesday, October 14th, 2008

Nothing announced yet….but you heard it here first. Should be announced soon.

One less BSM player….

User conference and the economy

Tuesday, October 14th, 2008

Let me do the good news first. Our user conference in New Orleans was a great success – we heard from multiple of our customers how they were using the Nimsoft products to achieve value, and many of those customers presented on the big stage – some managed service providers and some end users.

Thanks to all our US (and Japanese) customers that came and supported this event – now on to Amsterdam. (Someone suggested that we should link it to the Renaissance…cool idea.)

Now on to the economy….do we ever learn? Did you see the presentation from Sequoia CEO conference (happy to send you the links if you like). They are very, very concerned and have advised their portfolio companies to conserve cash, cut costs wherever possible.

Nimsoft is very well positioned given the strength of our business combined with the recent investment from Goldman Sachs but we also want to be conservative. We’re looking at “slowing down the growth” (we’ve actually been looking at this for a few months anyhow) and ensuring that we’re as efficient as we can be. I got my first email yesterday from someone who’s company has not managed to raise new money and are now in trouble…Nimsoft is well positioned to take advantage of these opportunities.

Finally, I saw this opening quote from the Gartner conference in Florida this week…

?A financial era is ending. This age of conspicuous consumption is over, and the age of conspicuous frugality starts now,? said Whit Andrews, vice president and distinguished analyst at Gartner. ?The world has changed, and your role, as an IT leader must change as well.?

My only question is….where was I during the period of conspicuous consumption?

I thought that ended in 2000 – we have certainly never gone back there!

On my way to the Big Easy

Tuesday, October 7th, 2008

On a plane to New Orleans tomorrow….

Our name for the user conference this year is the Big Easy. Not very original given the location of New Orleans but we felt it reflected our product and its ease of use pretty well – “finally an alternative to the Big-4 – the Big-Easy” <<

But…here’s the thing. The European user conference is in two weeks time and is in Amsterdam. So…what can we call it?

I’m sure there could be some interesting ideas given the location but I’m looking for help. Anyone got any ideas….feel free to add them as comments if you do.

If we get a killer/fun idea I’ll personally send someone a bottle of something.

Woo Hoo – we're excited!!!!!

Tuesday, October 7th, 2008

Goldman Sachs Leads $12 Million Investment in Nimsoft

Fastest Growing Systems Management Company Announces Second Round of Funding

REDWOOD CITY, Calif. ? October 7, 2008 ? Nimsoft, the fastest growing systems management company, today announced that the company has completed a funding round of $12 million led by new investor Goldman Sachs with follow on investments from Series A investors JMI Equity and Northzone Ventures. The company will use the funds to continue its growth and help achieve its vision of becoming the world?s leading enterprise systems management software company.

?Nimsoft has an innovative, well-run business model with a strong management team,? said David Campbell, Vice President, Principal Investment Area, Goldman Sachs. ?To operate modern data centers, it is critical for IT customers to have robust systems management software that is easy to deploy and maintain to ensure they are providing the right level of service to their businesses. Nimsoft has a proven track record of delivering this functionality to both large and small enterprises and managed service providers (MSPs) around the world. We are pleased to invest in Nimsoft to enable further growth as a leading enterprise systems management provider.?

?Despite the tough economic times, we were overwhelmed with interest from multiple prestigious investors,? said Gary Read, president and CEO of Nimsoft. ?An investment from Goldman Sachs is further recognition of the strength of our business model, product performance and future business opportunity. With the global market experience and formidable resources of Goldman Sachs added to the existing knowledge of our initial investors JMI Equity and Northzone Ventures, we are confident we will continue to grow a highly successful business.?

According to Gartner Dataquest, the worldwide revenue for IT operations management software was $12.9 billion in 2007, representing 13.5 percent annual growth.1 Nimsoft extended its position in the Gartner ?Magic Quadrant for IT Event Correlation and Analysis, 2007? and has expanded to 700 customers in 30 countries. With revenue growth of 534 percent over the past four years, Nimsoft is the fastest growing systems management company in the world due largely to its easy-to-use performance and availability monitoring software that offers a fast and compelling Return on Investment.

An InformationWeek product review ranked Nimsoft the ?Best of the Best? among nine application performance management (APM) solutions. APM is a critical segment of systems management because it monitors the performance of the customer experience ? in addition to core IT infrastructure performance. InformationWeek reviewers noted Nimsoft was ?a real leader? in service level management for its ?flexible and robust SLA reporting engine? and ability to ?report SLA performance granularly ? which many APM tools are unable to do.?

Lead Goldman Sachs investor David Campbell will join the Nimsoft board of directors and provide strategic counsel for the company?s ongoing development and growth. Peter Arrowsmith of JMI Equity and Torleif Ahlsand of Northzone Ventures will continue to serve on the Nimsoft board of directors.

Size matters?

Monday, October 6th, 2008

In a bad economy, what happens to the vendors? Who wins, who loses? Where do customers go for value yet security?

First, let’s talk about the big guys? They like to go elephant hunting…they need to win big, big deals because the expectations are so high from their investors. But…the elephants start to disappear in a down economy (it’s the big deals that get scrutinized and canceled by the CFO first). So the mega-vendors try to get aggressive on price to compete for smaller budgets but…these vendors have a fundamental problem…their products require tons of services and support, which means no matter how low the software price is, the cost of ownership is still very, very high and cannot be reduced.

Surely then customers go to smaller vendors where they can typically reduce their costs and reduce their budgets? Well yes and no. One of the issues with the small vendors in a down market is that many of them don’t survive. They cannot drive the revenue to make them profitable, the investors don’t have the appetite to keep adding to their investment and so they end up being sold off cheaply.

So, where does the customer go to (1) Reduce their costs but (2) Keep their risk to a minimum.

The answer is that customers still need to find the smaller vendors to be able to reduce their costs and cut budgets, but they also need to ensure that their vendors are well funded, have good investors for the long term and have good established customer bases and recurring revenue streams from multiple different types of customers.

More tomorrow….