10 IT management start-ups to watch

Virtualization, application performance, software-as-a-service among management start-ups' focus areas

Profiles of 10 promising IT management technology start-ups whose products and services can help enterprise IT improve performance and cut costs across diverse environments.

Venture capital is becoming scarce in some tech sectors, but that hasn't stopped these 10 start-ups from delivering new tools for managing IT systems.

See a slideshow highlighting the top 10's products.

Newcomers delivering technologies designed to automate tasks, do more work with fewer resources and streamline operational processes could weather the financial storm better than some. By winning customer accounts with innovative approaches to reducing labor, improving performance and optimizing service delivery, rookies in the management market might earn scarce IT budget dollars. That's why despite venture capital investors being cautious, industry watchers say enterprise IT customers will continue to see new players in the management market.

"Innovation continues to occur for one because it is a large market -- there are a lot of applications and infrastructure that need managing -- and as technologies such as virtualization evolve in environments, we need tools to better manage and support the changes across environments," says Cameron Haight, research vice president at Gartner. "Historically the reasons to invest in management technology include reducing total cost of ownership, improving business and service quality, and responding better to customer demands. That value proposition holds true irrespective of the economic condition."

Here are 10 start-ups whose technologies hold the promise to improve enterprise IT management. (Here's our 2007 list and here's where those companies are now.)

Company: AppDNA 

Founded: January 2008

Headquarters: Chicago and London

Focus: AppTitude application-compatibility testing software helps IT professionals assess application version, operating system and virtualization options before it is deployed to a production environment. The software profiles and models various deployment scenarios and tells IT professionals the impact and technical changes the environment would undergo due to the application deployment without requiring extensive manual testing.

Why it's worth watching: As enterprise companies invest more in server and desktop virtualization technologies, products such as AppTitude will help IT managers determine which applications will perform better and maximize resource utilization on a virtual platform.

"People are trying to determine what the best delivery vehicle is for end-user applications. AppDNA checks dependencies and application attributes to gauge if an application would be suited to a Citrix thin client application, for instance," Gartner's Haight explains. "I've been somewhat surprised that there hasn't been more in the way of such assurance tools for the client environment as it evolves toward virtualization."

How company got its start: Spun out of IT consulting and software business Camwood Limited by founders hoping to develop commercial software that would ease corporate migrations on Windows platforms and promote the adoption of application virtualization technologies.

How company got its name: Reflects the idea of an application having DNA, or metadata, that can be used to help organizations best fit an application in their environment.

CEO: Mike Welling in 1999 founded Camwood and prior to that worked for GE Capital, commercially owning and delivering one of the company's largest global IT projects.

Funding: Foresight Group invested $3 million in April 2003, which Camwood used to develop the product and spin the company off earlier this year.

Who's using the product: AppDNA lists King's College London, Tube Lines (London Underground) and Newham Borough Council (host of 2012 Olympics) as customers.

Company: Apptio 

Founded: October 2007

Headquarters: Bellevue, Wash.

Focus: Developed technology, dubbed the Transparency Engine, that's delivered in a software-as-a-service model on a scheduled basis. The software measures how IT services are consumed and assigns financial metrics to the services to enable IT to establish charge-back programs or better communicate its value to the business, the company says.

Why it's worth watching: "Globalization, consumerization, new competitors and new service models are radically changing the shape of IT. IT leaders must develop greater transparency into the costs, utilization and operations of their IT services," says Barbara Gomolski, research vice president at Gartner.

Haight adds: "With virtualization, charge-back is percolating. IT is looking for ways to manage sprawl and proliferation, and charge-back can be used as a behavior-modification tool in that it makes it transparent to people what resources they are actually consuming."

How company got its start: Founded by President and CEO Sunny Gupta and CFO Kurt Shintaffer, who had previously worked together at iConclude.

How company got its name: Company officials say there is no deeper meaning to the name, but it sounded "crisp and no one else had it yet."

CEO: Gupta previously founded iConclude, a run-book automation vendor later acquired by Opsware for $62 million, which in turn was bought by HP. Prior to iConclude, Gupta ran the Java/.Net performance product management group at Mercury Interactive, also acquired by HP.

Funding: $7 million in Series A funding closed in November 2007 led by Greylock Partners and Madrona Venture Group.  Additional investors include: Ignition Partners; Shasta Venture Group; Marc Andreeseen (co-founded both Netscape and Opsware); Frank Artale (vice president of business development at Citrix Systems and former senior vice president at XenSource and CEO of Consera); and Ben Horowitz (co-founder and former CEO of Opsware).

Who's using the product: Alaska Airlines, Finlay Enterprises, HomeStreet Bank, Motricity, NYK Logistics and Blue Cross Blue Shield of Kansas City are listed among Apptio's customers.

Company: BlueStripe Software 

Founded: June 2007

Headquarters: Research Triangle Park, N.C.

Focus: FactFinder software, designed for VMware virtual server environments, performs an automatic discovery of the application and its components. It then details all connections and dependencies of the application, benchmarking normal behavior to enable the software to detect when performance anomalies occur.

Why it's worth watching: Industry watchers predict that application performance will become a key challenge for IT departments deploying virtualization.

"What BlueStripe proposed to do initially, the discovery of applications, is interesting, but what really would do the trick for the start-up is when they can effectively monitor applications within a container, something that very few products can actually do," says Jean-Pierre Garbani, vice president and principal analyst at Forrester Research. "Anything that helps IT in measuring application performance in virtual machines will be very welcome."

How company got its start: Management industry veterans spotted the opportunity to develop technology that could address the performance problems virtualization can introduce into distributed environments.

"The loss of visibility [in virtual environments] is breaking the current management tools, and we've developed a technology that can manage the application wherever it goes, even if part of the application is on virtual systems, part on physical servers and even if part is tied to mainframes," says Vic Nyman, BlueStripe COO and former CEO of configuration management vendor Relicore, which Symantec acquired in 2006. Nyman also held positions with IBM Tivoli software and Wily Technology, the application management vendor CA acquired in 2006.

How did the company get its name: Two company executives graduated from Duke University and two others from rival University of North Carolina, inspiring the BlueStripe name and logo, which features the two college’s shades in "The Battle of the Blues."

CEO: Chris Neal formerly worked as vice president of field operations at Wily Technology (acquired by CA), as well as held positions at Oracle and NetDynamics.

Funding: Initially self-funded; $5 million in Series A funding from Trinity Ventures in December 2007.

Who's using the product: Square 1 Bank, First Vertex Inc. and Mi-Co have signed on. Additionally, BlueStripe is working with finance and telecom leaders.

Company: DynamicOps 

Founded: January 2008

Headquarters: Burlington, Mass.

Focus: Virtual Resource Manager, or VRM, is software that installs on a virtual or dedicated server and communicates with interfaces from hypervisor vendors such as Citrix, Microsoft and VMware. VRM queries the environment to find available resources and enables IT managers to use a console to allocate virtual resources and assign permissions.

Why it's worth watching: "Essentially DynamicOps is automating virtual machine provisioning in a way that really delivers a business service, rather than just an IT management tool," says Andi Mann, research director at Enterprise Management Associates (EMA).

Being a start-up, the company will be challenged to win budget dollars against myriad management competitors, but Mann adds: "It is very heterogeneous, with support for VMware, Citrix, Microsoft (Virtual Server and Hyper-V) and Solaris (LDOMs and Containers), across Windows, Linux and Unix. It also has a lot of functionality, controlled from a very clean GUI that appears to be extremely intuitive and easy to use. So it has an opportunity to grab a good deal of business."

How company got its start: The technology was developed by Credit Suisse's Global Research and Development Group. The software has been in production for more than two years, managing thousands of virtual desktops and servers at multiple Credit Suisse data centers in four locations worldwide.

How company got its name: Company founders based the name on the premise of dynamic operations in lights-out data centers.

CEO: Rich Krueger, formerly the executive vice president of business development and international sales at Incipient, a storage virtualization company. Prior to Incipient, Krueger served as vice president of business development for LightSpeed Software.

Funding: Funded by Credit Suisse's Next II venture group.

Who's using the product: Company officials say DynamicOps has about 10 customers, with another 20 in proof-of-concept trials. They declined to name any.

Company: Hyper9 (formerly InovaWave)

Founded: October 2007

Headquarters: Austin

Focus: Hyper9 search software is software that installs on a Windows server, though the company plans to offer it as a virtual appliance in the future. The product uses five data collection methods to gather configuration, patch and other data on virtual and physical machines. To collect data, Hyper9 inspects VMware VirtualCenter database, VirtualCenter via an API, host servers, virtual machines and the sessions within the virtual machines. The software aggregates data and presents it through a Web-based interface, coupling the search results with business intelligence metrics and potential actions to take in response to search results. The company makes the search platform available for free.

Why it's worth watching: "Hyper9 is addressing one of the biggest problems in virtualization -- the complexity that is apparent in virtual machine sprawl and inconsistent configurations," EMA's Mann explains. "Hyper9 allows operators and administrators -- even less skilled staffs -- to find and compare detailed virtual machine configuration information and even control the virtual machines themselves with stop, start, pause, migrate, clone, snapshot and other capabilities."

How company got its start: Company founder and CTO Dave McCrory, who formerly worked at virtual automation vendor Surgient, wanted to develop a system the would quickly deliver the relevant data IT managers needed to more quickly solve performance problems and better understand the components of their virtual infrastructure.

How company got its name: The hyper prefix means "over, above and beyond" and denotes the top layer or super level, as in hypervisor. Nine represents the top or limiting number, denoting the upper boundary.

CEO: Chris Ostertag, also president, formerly worked as vice president of worldwide sales and field operations for data encryption and compliance vendor Credant. Prior to that, he led Sun's worldwide team of more than 4,500 technical sales experts.

Funding: $8.5 million in funding from Matrix Partners and Silverton Partners in October 2007 and an undisclosed amount in an addendum to the earlier round from Maples Investments in August 2008.

Who's using the product: While they couldn't reference customer names publicly, company officials say they expect to have more than 100 companies using the product by year-end.

Company: New Relic 

Founded: January 2008

Headquarters: Menlo Park, Calif.

Focus: RPM, or Rails performance management, software is delivered as a service. IT managers install a plug-in on the Ruby on Rails application they want to manage and the application delivers performance data back to New Relic for presentation and correlation. RPM has three paid subscription levels (Bronze, Silver and Gold) and RPM Lite, which is free.

Why it's worth watching: Ruby on Rails is the open source Web application framework du jour for Web 2.0 applications, and industry watchers expect it to take a similar path as Java 2, Enterprise Edition, which took the place of many C++ applications in customer environments. Plus the company founder and CEO Lewis Cirne headed up Wily Technology, which was considered an innovator in Java application management.

"New Relic is doing for Ruby apps what Wily did for Java apps, but with a twist. They are doing it from a cloud perspective," says Gartner's Haight. "Data from plug-ins on Ruby applications flows to them and they present it in a portal, which gives the company a lot of insight into this application type that hasn't seen much play in the enterprise yet."

How company got its start: Following CA's acquisition of Wily in 2006, Cirne says he turned his attention to disproving some misconceptions around Rails applications, such as that they can't scale for the enterprise. "I focused on starting a company that could help Rails go mainstream as a serious business application, and I believe providing performance management will help," he says.

How company got its name: Cirne plugged his full name into a Web site anagram generator and one of the results, New Relic, stuck.

CEO: Cirne founded Wily in 1998 and developed its flagship performance monitoring solution, Introscope. Most recently he was an Entrepreneur in Residence at Benchmark Capital. He holds seven patents, including four related to Wily's core technology.

Funding: $3.5 million in Series A funding closed in February 2008 from Benchmark.

Who's using the product: New Relic claims more than 700 customers in production, of which over 50% are paying for service. Named customers include Ourstage, Shopify, iOffer and 37 Signals.

Company: PacketTrap Networks 

Founded: May 2007

Headquarters: San Francisco

Focus: The Perspective platform can be used to monitor network performance, manage faults and report on device availability data. It's targeted at organizations with between 100 and 5,000 employees. (Compare Network Monitoring and Management products.)

Why it's worth watching: PacketTrap offers a "high-end product suite that starts with a free set of tools that is great for hands-on troubleshooting and administration," says Jim Frey, senior analyst at EMA. The company also "leverages a large community of customers to participate in and drive the direction of the product," he says. And the company "has spent time developing some very valuable advanced policy and intelligent baselining features that commonly only come with much-higher-cost solutions."

How company got its start: Company founders took on network performance management for the midmarket because they didn't see any products that could solve managing virtualization, VoIP and other emerging technologies adequately for customers that might not be considered enterprise size. Aiming squaring at SolarWinds as the top competitor.

How company got its name: Derived from capturing packets to manage network and application performance.

CEO: Steve Goodman previously served as vice president of the Storage and Business Continuity Business Unit at SonicWALL.

Funding: $5 million in Series A funding from August Capital in October 2007.

Who's using the product: Frontier Materials, Enviance and the City of Dublin, Calif., are listed among PacketTrap's customers.

Company: Porttracker 

Founded: December 2007

Headquarters: Basingstoke, England

Focus: Packages its network management software of the same name on an appliance that enables network managers to quickly track and report on what is connected to the network for troubleshooting, security and capacity-planning purposes. The product builds a view of the switch-port inventory and is designed for companies with more than 1,000 ports.

Why it's worth watching: "Porttracker is an example of a technology of high priority to security management teams, in terms of visibility into actual network activity," says Scott Crawford, research director at EMA. "Porttracker provides information as to what is connected to the network and where, which helps to correlate detected activity with known network nodes. This helps improve the accuracy of security event correlation, helping to improve the signal-to-noise ratio of network visibility."

How company got its start: The founders began developing the technology and appliance in late 2005 to help reduce the challenge of "port wastage," which company officials say can cost companies in a big way.

How company got its name: Based on the technology's ability to track what is connected to a network down to the port..

CEO: Julian Rigg has previously held senior management positions with Wall Data, Cisco, Quadritek and Lucent.

Funding: Privately funded.

Who's using the product: The company's Web site lists the University of Hertfordshire, for one.

Company: SevOne 

Founded: February 2005

Headquarters: Newark, Del.

Focus: Performance Appliance Solution (PAS), http://www.networkworld.com/news/2008/061008-sevone-performance-problems.html first released in June 2008, comes packaged on five appliances that range in capabilities depending on the size of the environment to be managed. PAS captures performance data for capacity planning or ongoing monitoring and management by using such standard protocols as SNMP and Cisco's NetFlow to collect network traffic data and measure how VoIP application traffic is impacting network performance, for instance. (Compare Network Capacity Planning and Network Design products.)

Why it's worth watching: "SevOne offers a product that is carefully crafted, packaged and priced to hit a growing market segment that is interested in a value-priced (or relatively inexpensive) but functionality rich product," says Rich Ptak, found and principal analyst at Ptak, Noel and Associates. "The company identified specific pain points and came up with what appears to be a technically strong solution whose installation, implementation and payback period seem to go easily and start promptly."

How company got its start: Company founders wanted to develop a network and application performance management product that could scale to meet the demands of large enterprise companies and service providers. The company developed a peer-to-peer architecture for its appliance technology enabling it to handle more transaction volumes and monitor performance across large distributed networks.

How company got its name: Named after the slang for the "severity one" performance problems network managers face

CEO: Michael Phelan, previously founder and president of consulting/storage networking integration firm StorNet, which was sold to Vanguard Technologies in 2000.

Funding: Self-funded until July 2006, then it raised $1.5 million of outside capital in a transaction led by Osage Ventures of Philadelphia. Other investors included John Ryan, the founder of SunGard; Jonathan Brassington, CEO of Liquidhub; Adrian Stone, CEO of Sureplan; and Lawrence Phelan, managing partner of Phelan Hallinan & Schmieg.

Who's using the product: SevOne lists Comcast, HBO, Credit Suisse, Hawaii Telecom and JPMorgan Chase among its customers.

Company: Zyrion 

Founded: December 2007

Headquarters: Sunnyvale, Calif.

Focus: Traverse is a business service management (BSM) product with a "strong network management foundation" for companies in the midmarket that might not be able to afford several management applications, company officials say. The software installs on a server and discovers the environment, and customers designate the business services they wanted managed.

Why it's worth watching: Industry watchers say Zyrion is a start-up with a mature technology. "They are a polished-up relaunch of the NetVigil product, which was originally offered in the market by [CEO Vikas Aggarwal’s] first company -- Fidelia," says EMA's Frey. They have some new features, and some very credible functionality via their business containers that will be of great value in bringing BSM to the midmarket."

How company got its start: Following a series of acquisitions with previous companies, company founders focused their energies on building a company that could address BSM and managing technologies such as virtualization for midmarket companies.

How company got its name: Founders liked the name Orion, but say it is over-used in the IT industry. When Zyrion was suggested, they decided it was close to what they wanted and also had an available domain name.

CEO: Aggarwal previously founded Fidelia, which Network General acquired in 2006 to incorporate the BSM technology into its network suite. NetScout bought Network General in 2007

Funding: Privately funded

Who's using the product: Alexander Open Systems in one of the 10 or so customers Zyrion is working with.

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