Introduction

As part of its annual IT spending intentions research, ESG recently completed a survey of 611 IT professionals working at midmarket (i.e., 100-999 employees) and enterprise (i.e., 1,000 or more employees) organizations across North America and Western Europe.[1] With organizations citing increased use of server virtualization, managing storage growth, and information security initiatives as major 2011 IT priorities, investments in related infrastructure management software are sure to follow. Indeed, as shown in Figure 1, 82% of organizations surveyed by ESG plan on increasing or maintaining their annual spending on management software.

Large Shops Lead the Way in Infrastructure Management Software Spending

As shown in Figure 2 and Figure 3, 2011 plans for infrastructure management software spending vary significantly by company size with larger organizations leading the way. For instance, while 38% of enterprise organizations plan to increase spending on management tools, just 23% of midmarket organizations will do the same (see Figure 2). Likewise, while a mere 16% of organizations with less than 25 production servers say they will increase their management software spending in 2011, some 41% of organizations with more than 100 production servers will do so (see Figure 3).  Taken together, this data clearly shows that IT organizations must make increased investments in management tools as their environments grow and become more complex and difficult to manage.

As part of this survey, ESG asked a number of questions designed to create a “psychographic” profile of the organizations surveyed. One of these questions pertained to how the respondent viewed his/her organization’s overall purchasing pattern for IT products and services, i.e., did they consider their organization to be a “leading-edge consumer,” an “average consumer,” or a “laggard consumer?”[2] ESG’s analysis found that there is a significant correlation between this designation and an organization’s management software spending plans. As shown in Figure 4, “leading-edge” IT consumers are vastly more likely than “average” or “laggard” organizations to be increasing their infrastructure management software investments. ESG believes that these organizations represent advanced, cutting-edge customers that are most sophisticated in terms of implementing management processes and tools and a more automated IT management environment.

Specific Areas of Management Software Investment

ESG also asked respondents to identify the specific areas in which they plan to spend their 2011 infrastructure management software budgets. As organizations continue to increase their use of server virtualization technologies to consolidate infrastructure and create more agile and dynamic data centers, additional investments in management tools are being required for security, network infrastructure, and virtual servers (see Figure 5). Simply put, virtualization technology is driving the need for new tools that can adapt to highly dynamic environments and still provide the same levels of security and management customers are used to in the physical world. Note that it is the “leading-edge” IT organizations that are investing most heavily in virtual server management tools (see Figure 6), a trend identified and analyzed by ESG in other recent research.[3]

While virtualization is providing IT organizations of all sizes with innumerable benefits, the simplicity of provisioning servers in virtual environments can turn tracking virtual machines and application dependencies, as well as preventing “server sprawl,” into a logistical nightmare. As such, one-quarter of organizations (25%) cited IT asset and inventory management tools as a key area of management software spending in 2011. It is also worth noting that nearly one in five respondents (19%) identified infrastructure power monitoring and management tools as a likely area of investment, indicating that end-users need more sophisticated tools and processes to ensure data center power and cooling efficiency.

When ESG further analyzed specific 2011 management software spending priorities by company size (as measured by number of employees), several interesting themes emerged (see Figure 7):

• Midmarket organizations are still focused primarily on “the basics.” As such, server and storage management tools represent this segment’s two top spending priorities.
• Storage management appears to be more of a priority for the midmarket: 28% of midmarket organizations say they will make investments in storage management tools in 2011 compared to 17% of enterprises. ESG believes this discrepancy can be explained by the fact that enterprise consumers most likely have storage management solutions already in place for SANs and other networked storage environments. For their part, as midmarket organizations experience significant storage growth—especially related to new server virtualization environments—they may be finding the need for new tools to support a rapidly growing networked storage environment.
• Enterprise-class organizations are much more likely to buy advanced management solutions such as IT asset/inventory management, cross-domain configuration management, IT chargeback, and business service management. ESG believes this is due to larger organizations transitioning to more highly-virtualized, dynamic (or “private cloud”) environments. Indeed, respondents that cited “increased use of server virtualization” as a top 2011 IT priority were nearly twice as likely (35%) to have plans for IT asset/inventory management tools as were respondents that did not view virtualization as a major 2011 initiative (18%).
• Nearly one in four midmarket organizations will stick to management tools that come bundled with existing products. However, ESG believes these organizations’ appetites for more sophisticated third-party management solutions will increase as their IT environments grow and become more fluid thanks to the influences of virtualization and cloud computing.

The Bigger Truth

ESG’s 2011 IT spending intentions survey indicates that more than 80% of IT organizations will spend the same or more this year on infrastructure management solutions as last year. While the top focus areas of security, network, and virtual server management are fairly consistent across all organizations, IT vendors would be well-advised to dig a little deeper and understand how specific priorities and spending plans vary by company size and organizational profile.

It is also be important for would-be management software vendors to understand how organizations are currently justifying their IT investments. As discussed in ESG’s spending report,[4] organizations are still focused on reducing operational costs where they can, but the gap between lower costs and business process improvement as the gating factor in deciding on a given IT investment is narrowing. Management vendors, therefore, should be able to demonstrate how better management will allow the same or fewer resources to manage growing environments and how advanced management solutions that provide increased levels of automation can actually improve business processes.

From an end-user perspective, as organizations mature their virtualized data center environments, their management solutions will need to mature accordingly. Capabilities will need to progress beyond basic monitoring and management to deliver increased data center automation and orchestration. Organizations should thoroughly investigate solutions to understand the capabilities available today as well as what is on their vendors’ product roadmaps. Such evaluations should include any partnerships that will deliver the requisite functionality.

[2] Complete definitions of these categories are as follows:

• Leading-edge consumers – we stay on top of the most current technology trends and purchase related products as soon as they are available.
• Average consumers – we stay on top of technology trends but generally wait to purchase related products until they have proven acceptance in the market.
• Laggard consumers – we don’t really stay on top of technology trends and tend to make investments only after those technologies have been widely accepted in the market.

[3] See also ESG Research Report, The Evolution of Server Virtualization, November 2011.

[4] See ESG Research Report, 2011 IT Spending Intentions Survey, January 2011.