By guest authors Shaloo Shalini and Pablo Chacin
In the following interview, Sramana talks to Mark Settle. Read on for insights into how cloud computing is shaping up large enterprises such as BMC and the industry in general.
Mark Settle joined BMC Software in June 2008 as CIO. Prior to BMC, he served as the CIO of four Fortune 300 companies: Corporate Express, Arrow Electronics, Visa International, and Occidental Petroleum. Mark has worked in a variety of industries including consumer products, high-tech distribution, financial services, and oil and gas. During the early stages of his career, he was the director of a systems integration business unit within Hughes Aircraft Company. Settle’s formal training is in the geological sciences. He received his bachelor’s and master’s degrees from MIT and a PhD from Brown University. Settle is a former Air Force officer and NASA program scientist.
BMC Software, Inc. (NYSE:BMC) is a provider of enterprise management solutions that empower companies to manage their IT infrastructure from a business perspective. Founded in 1980, the company’s primary focus is on business service management. Its solutions span enterprise systems, applications, databases, and service management.
BMC has about 6,000 employees worldwide, with corporate headquarters in Austin, Texas, and global operations with multiple offices in the United States, India, Israel, Singapore, and the Netherlands. Its product development centers are located in North America, India, and Israel. With market presence in 124 countries across the globe, the company’s total revenues for fiscal 2010 were $1.91 billion.
BMC figures as one of the BusinessWeek’s Top 50 Performers in the S&P 500 with a 153% five-year return on investment (Bloomberg Businessweek, June 2010)
SM: Mark, as a thought leader for your company, how do you visualize the progress of cloud computing within the realms of your organization? Has it gone beyond pilots and evaluation phase?
MS: It consists of three components. The first is leveraging SaaS-type applications to help run your business.
For an organization with our kind of background – $2 billion company with 6,000 employees, global operations, and product development centers in North America, India, and Israel – if you look at the enterprise-level applications we use to run our business, we have 120 applications in our portfolio. About a quarter of those are SaaS applications. We employ salesforce.com. We also employ another application called OpenAir to support our professional services group at BMC. We use SuccessFactors for succession planning and other tasks.
We have such a large footprint in our overall portfolio that we needed to fully integrate the way we monitored and managed those applications, much like the way we would keep a homegrown or a licensed application on premise. We use a synthetic transaction generator to ping those applications and run static transactions on a regular routine basis so that we can automatically detect any degradation in performance or cutoff in availability. That way, we can be proactive and reach out to the vendor, indicating to them that we have some issues.
Some parts of the organization have limited exposure to SaaS applications, and they have almost a novelty role in the organization, but I would characterize BMC as a mainstream adopter of SaaS.
SM: When you say that 25% of your applications are in the cloud, what is your forecast for the next two, five, or ten years? Is it going to grow well beyond the current adoption percentage?
MS: Yes, I think we will continue to grow. Similar to most of the other hype cycles that have occurred in IT, such as freeware, Linux, search, and so forth, in the beginning there is lot of hysteria about all the concerns, but over time the new delivery channels and the new capabilities are accepted and become mainstream.
It is my belief that salesforce.com was the tipping point in the development of the SaaS market, and they have grown explosively from $5 million in 2001 to $1.3 billion this year. Even through the global recession, the SaaS providers had banner years; their revenue grew. Yes, I fully expect the footprint to increase, but we don’t have any kind of target that we are shooting for.
SM: What kind of application do you see yourself moving into from SaaS point of view in the next leg of adoption?
MS: We are implementing a tool called Alepo for our marketing campaign. Alepo is an AppExchange partner of salesforce.com. We will probably continue to use the diversity of SaaS tools in our HR and corporate service as well.
SM: What about analytics?
MS: Not at the moment. But that is an interesting question. I have seen incredible press around that lately.
[Note to readers: You may want to refer to IDC report with SaaS analytics numbers here.]
I don’t fully understand that, because one of the limitations of SaaS is the volume of data you have to move back and forth, right?
SM: What is your perception on data here? Is that still a barrier, because you already have CRM applications with data existing in someone else’s system?
MS: A lot of the SaaS people want you to send more of your related data to them for analytics and reporting. Like most companies in this situation, we have adopted the opposite strategy, which is to copy data from the SaaS provider into our own data warehouse and federate that with the other internal data and then do the reporting out of your own data warehouse.