Archive for February, 2009

Sitting at Heathrow waiting to go home

Saturday, February 28th, 2009

What a week….started Sunday night red-eye to Boston….

Prospective and existing customer meetings in Massachusetts, Connecticut, Rhode Island, New Jersey and New York on Monday/Tuesday/Wednesday. Think about this British guy driving around the East Coast, including driving around Manhattan….and you’d be right, I got lost A LOT (Hertz Never Lost is absolutely the worst GPS ever – I am a case study for the nickname Forever Lost)

Then, after running through JFK to make my flight, I arrived in London at 6am Thursday morning. Into the office for 4 sales reviews with the sales team, then train in to London for prospective customer meeting. Down to Brick Lane for a ruby for dinner and then two more customer meetings on the Friday and then, lunch with our VP EMEA talking about the year ahead.

Visited my parents on Friday night….awaiting news of my brother and his wife who, upon knowing that I was heading back to California in the morning, proceeded to deliver twin baby boys just in time for me to visit them in hospital at 4.30am this morning so that I could make it to Heathrow in time (thanks Lisa!)

Now…sitting in the Virgin lounge because the flight back is delayed. A long week but a good week both professionally and personally. Looking forward to getting home and re-uniting with my family again.

New products available

Saturday, February 21st, 2009

We have got multiple new releases coming out of engineering that we are looking for beta customers for. Looking for existing customers that can act as beta for….

Citrix Xen Server monitoring
Microsoft Hyper-V

and of course, we are in active beta with our Business Service Management offering.

Any existing customers want to try these new offerings? If so, contact your account manager or email our support team.

A tale of two companies

Thursday, February 19th, 2009

First, apologies for just throwing up Mark Hurd’s email without adding any commentary. I just finished a couple of days vacation with the kids and…..phew, now I’m home and can start to recover!!

Anyhow, did anyone notice the stark difference between BMC’s results and HP’s? BMC over-achieved on their earnings, and increased guidance…..HP disappointed and reduced guidance. Why you may wonder? They are both dealing with the same customers aren’t they?

Well, some personal comments.

First of all, BMC has been constantly cutting costs and right-sizing itself for multiple years. From what I can see they have done a tremendous job of getting the expenses under control and, I know that it is has been tough for their employees for a number of years, but now they are reaping the rewards. Also, they made a couple of big and brave bets. The Remedy purchase a number of years ago has been an absolute gold-mine for BMC and then their more recent acquisition of Bladelogic is a game changer for them. Many people have commented that they overpaid for Blade but, what did they buy? Well, not only did they buy a second engine of growth for the company in a hot space to put alongside Remedy, but they also bought a whole new culture and sales team. Everyone knows that the Blade team has taken over the business unit at BMC and this is probably the biggest single change and dare I say, a major reason for their positive results.

The stories that I hear coming out of HP on the other hand, is that they still think and act like a hardware company. The software sales team does not appear to be “top of the pile” and instead has to follow archaic and complex hardware sales procedures. Try asking HP Software for a quote….see if you can get something back in less than 24 hours. In my opinion, and please remember that these are all personal comments and after all, what do I know….but HP gave up their single best opportunity to change the culture when they tried to integrate Mercury. Why oh why didn’t they leave it as a stand-alone business and let the Mercury leadership take over HP Software rather than the other way round. Remember….when BMC acquired Remedy, they left it alone. When BMC acquired Blade, they have given the Blade team the power to get it done.

Anyhow, when you look closer at the BMC results, their growth is all powered by Remedy and Bladelogic. Their Service Assurance business (Patrol etc) is still declining pretty rapidly in a market that has been growing for many years. Let’s face it, Patrol and related products (Best1, Performance Manager, Proactivenet and multiple others), are also-rans right now.

And what about Nimsoft’s experience? Well, keep in mind that our sample size is relatively small but, we don’t see BMC in our deals because they are focused on other disciplines where they have market-leading products.

But, for HP, they are our most-replaced competitor….

I wonder…if other companies are having similar success at replacing HP as much as we are then maybe, just maybe that contributed to their poor results. An eroding maintenance base is never good for business.

Finally, I want to say that these are worrying times for many people. Job losses, salaries and benefits reduced and bad news at every turn. I wish everyone the best – just remember that sometimes the medicine doesn’t taste good at the time, but helps cure us in the longer term.

Tough times

Thursday, February 19th, 2009

From: CEO, Mark
Sent: Wednesday, February 18, 2009 4:48 PM
Subject: HP Announces Q1, FY09 Results

Employees can access a video replay of Mark?s Q1, FY09 performance review message on hpNOW .
Today, HP announced first quarter results amid one of most difficult economic downturns that any of us has ever faced. I am proud to say that we continue to execute well in this very challenging environment.

We grew revenue 1 percent year-over-year, or 4 percent in local currency, and you need to look at these numbers a little differently this quarter. For the first time in a long time, the dollar was strengthening, so the currency conversion was actually a headwind for us. We also continued to show strong operating leverage with non-GAAP operating profit up 10 percent year-over-year. This was a solid performance, and I thank all of you for your efforts.

But really, Q1 was like a tale of two companies.

HP Services ? as a result of EDS and TS ? had a strong quarter, delivering virtually all of the local currency revenue growth and more operating profit than any other business. It?s gratifying, because this performance was possible because of the hard work we?ve been doing to restructure those businesses.

When you take HP services out of the mix, it?s a very different picture. PSG had revenue down 19%. ESS had revenue down 18%. IPG had revenue down 19%. In fairness, across IT and even other industries, product businesses are struggling in this economic climate. And we did gain share in key market segments. PSG and ESS gained roughly 1 and 3 points of share, respectively. In IPG, quite frankly, we still have work to do across a number of dimensions like inventory, both owned and channel inventory.

In an environment like this, there?s no margin for error and no tolerance for inaction. To give you a little insight into my world, after we report our earnings, we engage in a dialogue with analysts and investors. They?re going to ask what we?re doing in light of the current environment to right-size these businesses.

The math is pretty straight forward. From a productivity standpoint, you?re supposed to reduce headcount on par with declining revenue. If you believe the environment isn?t going to improve, you should take a bigger cut to get in front of the problems. You can do the calculation, as easy as I can. We have about 100,000 people in our product businesses, with revenue down roughly 20%, and an environment that may not get any better in 2009.

I?ll be asked by investors, ?Where?s the job action, where are you taking out this roughly, 20,000 positions?? Well, I don?t want to do that. When I look at HP, I don?t see a structural problem of that magnitude. There are pockets where restructuring needs to happen, and areas where actions will be taken as part of our ongoing workforce optimization process. But at a company-wide level, I don?t believe a major workforce reduction is the best thing for HP at this time.

I think we are fundamentally sound, and when the economy picks up, I want HP to be strong, and to take share and to outgrow the market. I said it last quarter, my goal is to keep the muscle of this organization intact. But we do have to do something?because the numbers just don?t add up and we need to have the flexibility to make the right long-term investments for HP.

So we are going to take action. We have decided to further variablize our cost structure by reducing base pay and some benefits across HP. My base pay will be reduced by 20 percent. The base pay of Executive Council members will be reduced by 15 percent. The base pay of other executives will be reduced by 10 percent. The base pay of all other exempt employees will be reduced by 5 percent. For non-exempt employees, base pay will be reduced by two-and-a-half percent. Additional efficiencies, including changes to the US 401(k) plan and the share ownership plan, will also be implemented. Of course, the implementation of all of these actions is subject to compliance with local laws and regulations. Follow-up communications will detail the timing and the plans in your location.

This does not change our pay-for-performance strategy at HP. If we outperform, and there is a chance we will, then we will increase the total amount of variable pay. In fact, the financial flexibility we?re gaining helps put us in a better position to compete and to win in the marketplace, and fund the bonus program this year based on pre-adjusted salaries. If the company performs well, if our individual businesses perform well and if you perform well, then you could potentially make up the difference with your bonus. I can’t promise you anything, but I tell you…there is a chance…if we get this right.

To be clear, these actions don?t make up for all of the decline in revenues. We?re also benefiting from the tough actions we?ve taken over the last few years. People always asked, ?Why are we so focused on getting costs out in good times?? Now?is why that work was so important. We?ve been able to bank some of those savings, and we?re making a withdrawal, which along with the actions we?re taking today, I hope, will get us through this recession.

Again, there are no guarantees. If the environment gets worse, if the downturn lasts longer than we?re assuming, if our performance declines, we?ll have to reassess. But for now I believe this is the right thing for the strength of HP.

I know this is a tough time. But if we get this right, HP can be the kind of company that not only has led, but will extend its leadership. We can emerge from this recession in a powerful position to create value for our customers, our shareholders and our people for years to come.

Thank you.


The polarizing effect of the downturn

Thursday, February 12th, 2009

Saw this article in the WSJ this morning….Silicon Valley is definitely suffering right now. I live in a small town called Los Gatos, and normally it is somewhat immune from the broader economy (i.e. lots of rich people live here….I just snuck in through the back-door!). But, this time around I’ve noticed that multiple of the stores in the town have shut-down, there is empty spaces on the high street, we are seeing Short-sales and disclosures and my kids school wrote to us the other day to say that they were likely going to have to reduce their staff as property tax receipts were expected to be lower.

For the tech start-up, it seems as though you are in one of two categories. Either you (a) Have cash, make positive cash-flow and therefore you are a potential buyer of the some of the distressed companies or (b) If you don’t have or are losing money, then you are seen as a company that needs to find a buyer. Clearly I am generalizing but you can almost see it in the eyes of the investors and banks – in the first 5 minutes they are sizing you up to see whether you are a beneficiary or the walking dead.

It’s very humbling to see what is going on. Fortunately we fall very much in to the first category. We completed additional funding from Goldman Sachs in September last year and we are growing very fast and making money….that means that we are getting lots of smaller companies knocking on our door to see if they “join forces” and we may well take advantage of some of those opportunities if it can help our customers and ourselves.

Anyhow, we have always tried to run a tight ship at Nimsoft which is not always the easiest thing to do with employees “why can’t I fly direct rather than taking a connection….it’s only $500 more” but it is in times like these that everyone becomes thankful.

Anyhow…read on….

More Tech Start-Ups Call It Quits
As Funding Dries Up, Fledgling Silicon Valley Firms Are Shutting Down; Fears of Chill on Innovation


The deepening recession is speeding up the shakeout in Silicon Valley, forcing droves of start-ups to shut down or sell themselves at fire-sale prices.

Many start-ups survived last year by slashing costs and deferring development projects. But as demand for their products continues to deteriorate and funding dries up, these young firms are now running out of lifelines. Many are calling it quits, recalling the dot-com bust earlier this decade.

‘You’re going to see a major shakeout,’ says Martin Pichinson, a wind-down specialist, above. Jeff Yasuda, below, plans to shut down his music site,

In recent weeks, start-ups with names such as Attune Systems Inc. and Reactrix Systems Inc. have wound down their operations. Others including Guava Technologies Inc. have sold themselves off for sums far less than what their investors spent on them.

“Start-ups are failing faster and you’re going to see a major shakeout,” says Martin Pichinson, a managing director of Sherwood Partners, a Mountain View, Calif., firm that specializes in winding down start-ups. Since mid-January, his firm has shut down an average of three start-ups a week, up from just one or two closures a month in September, he says.

Among the companies that Sherwood is currently closing is Allux Medical Inc. The Menlo Park, Calif., firm, which made devices to treat dermatological problems, had raised more than $11 million in funding. In December, Sherwood also closed down Reactrix Systems, a Redwood City, Calif., interactive media firm that had raised more than $45 million. Mr. Pichinson declined to detail the shutdowns.

Jeff Yasuda, founder and chief executive of San Francisco-based online music start-up Fuzz Artists Inc., plans to shut down his Web site on Friday after deciding he couldn’t drive enough visitor traffic to it to make it a viable business.
Turning Out the Lights

As he winds down, Mr. Yasuda has cut his staff to four people from 12. He still has some money from investors and is working with his remaining staff to preserve a service called, which lets users share short messages about music.

“It’s just brutal,” says the 36-year-old Mr. Yasuda. “Had the markets been different, I would’ve been able to raise a lot more capital and maybe I could’ve given it more of a shot.”

The troubles aren’t limited to Silicon Valley. VuBotics Inc., an Atlanta maker of software for wireless devices, filed for Chapter 11 bankruptcy protection in November, while nTag Interactive Corp., a Boston maker of high-tech name tags, filed for Chapter 7 bankruptcy protection the day after Christmas.

That such shutdowns have reached tech start-ups shows how far the recession has spread from its Wall Street and housing-sector roots and how it now could slow innovation.

Start-ups are typically where innovative products and services are created, says Richard Mammone, a professor at Rutgers University who has also started several tech companies. In normal conditions, the market rewards the best young companies and only the nonviable ones go bust. But in this economy, “it’s not survival of the fittest,” he says.

Venture capitalists pulled back sharply in the fourth quarter as credit markets seized and stock markets collapsed. Venture capitalists invested $5.54 billion in U.S. start-ups in the fourth quarter, 27% less than the third quarter, according to data compiled by VentureSource.

Rich Brenner, who runs a Cupertino, Calif., firm that specializes in restructuring start-ups, says this downturn is hurting Silicon Valley companies differently than the dot-com bust, when Internet companies that “should have never been funded” disappeared almost overnight.

This time tech companies aren’t at the epicenter of the bust, and failures will take time to play out. Still, “the needle has shifted precipitously in the last six months and now we’re starting to see more and more companies strategically stalled,” Mr. Brenner cautions.

Attune , a Santa Clara, Calif., software maker ceased operating in December even though employees say the firm had money to keep going through early 2009.

Alan Kessler, Attune’s chief executive, says start-ups of Attune’s size are highly dependent on partnerships with larger companies and when the markets tumbled, many of those bigger companies “froze.”

As a result, Mr. Kessler says he decided the most realistic route for the 25-person company was “to pursue a path to wind down.” In November, he announced Attune — which has raised more than $14 million in funding — would shut down.

“You fight the good fight and do the best you can,” says Mr. Kessler, who last month rejoined 3Com Corp. as a senior executive.

Other start-ups are being pushed by their investors to sell themselves off, even at depressed prices. Jonathan MacQuitty, a venture capitalist at Abingworth Management Ltd. and a board member of Guava Technologies, says he recently encouraged the bioscience company to sell itself.

Demand for Guava’s products — instruments that do cell-based analysis — have tapered off as pharmaceutical and biotechnology companies reined in their spending, says Mr. MacQuitty.

So earlier this month, Guava agreed to sell itself to Millipore Corp. for $22.6 million; investors had put more than $50 million into the Hayward, Calif., company. The sale price was little more than Guava’s revenue, which totaled about $22 million in 2008.

“It wasn’t a particularly attractive price but at the same time, if Guava tried to persist, it would have taken a lot of time and money to wait out the current situation,” Mr. MacQuitty says.

Overall, 15 U.S. private companies backed by venture capital were sold in January for an average price of $5.7 million. That’s down sharply from the average price of $44.2 million that 26 venture-backed U.S. companies fetched in January 2008, according to research firm 451 Group.

For some companies, the shakeout is an opportunity. DemandTec Inc., a San Carlos, Calif., maker of online software for retailers, last month acquired Connect3 Systems Inc., a Cerritos, Calif., start-up that also makes software for retailers. DemandTec bought Connect3, which generated about $8 million in annual revenue and no profits, for $12 million.

Dan Fishback, DemandTec’s CEO, says his firm had long been interested in purchasing Connect3 but last year would have had to pay twice as much. Now “it’s a buyers market,” Mr. Fishback says.

Double Webcast tomorrow

Wednesday, February 11th, 2009

Should be a fun day tomorrow…

First at 11am Pacific Time, we are sponsors of the MSPmentor unveiling of the World’s Top 100 Managed Service Providers. Register here to join us, together with MSPmentor, and leading MSPs Fusion Storm and Longview Systems.

Then, at 2.40pm Pacific Time, I am presenting at the Thomas Weisel Technology and Telecom conference that will also be webcast live at this address.

Also jammed full of meetings between these events with various external parties – it’s a busy week – Texas and back in a day today!

It's Nimsoft official…..thanks HP

Thursday, February 5th, 2009

Yep – we have gone through every single one of the 162 new customers we signed during 2008 and looked at who we competed with and, in the case of a replacement, who we replaced.

Congrats to our friends at HP – we beat them in more competitive evaluations than any other vendor and we also replaced them more times than any other vendor as well. Double first prize….wonder where I should send the trophy to….any ideas?

Customer satisfaction – unsolicited feedback from a customer (an MSP)

Wednesday, February 4th, 2009

These messages make my day!

Sachin did an AWESOME job while he was here, thank you very much for coordinating that. We were able to get through our agenda, sort out the outstanding issues and have started our rollout to clients.

Also a special mention for the Support teams, we are very impressed with their focus on resolution and customer service. In addition, the responsiveness of Sachin and the Support team in listening to our feature requests and passing them on to the Dev Team was excellent

Thanks again and we look forward to seeing you and your team again soon

Weight Loss

Wednesday, February 4th, 2009

OK, so I’m seriously fed up. I’ve been on a diet for 3 weeks, working out/running every day and I’ve not lost a single pound of weight. Darn it!

My oh my!

Tuesday, February 3rd, 2009

I love Joe Panettieri’s MSPmentor blog……check some of these out regarding Kaseya’s CEO….

Wow – there looks to be a lot of pretty unhappy people out there – have you read the comments?

In case anyone is wondering, I have never been investigated by the SEC although I did have my tax returns for 2004 audited by the IRS (b*******) and they made me pay extra because, even though I provided them with 2 full boxes of documentation, some receipts were missing.

We’ve got the MSPmentor100 unveiling coming up on February 11th – tune in for the webcast