10 management companies to watch

The time is right for these up-and-comers that promise to take the labor, cost and complexity out of managing today's advanced IP networks, applications and data centers.

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BMC, CA, HP and IBM had better watch their backs.

"It is the right time for a more unified, easier-to-use management solution," says Robert Abbott, a principal with venture capitalist firm Norwest Venture Partners, which has invested in such start-ups as Kace. "Enterprise networks and data centers are so complex and fragmented that IT professionals need to reduce the time spent managing devices, servers and desktops. They want simplicity in their management environment today," he says.

A group of start-ups intend to revamp the current landscape of network, systems and application management tools with easy-to-deploy, low-cost -- in some cases, free -- products that can address more quickly the most pressing issues of today's IT managers. Despite the race among the management heavyweights to fill holes in their product suites through acquisitions, newcomers are stealing the spotlight with software and appliances that reduce manual labor, speed problem resolution and simply make it easier to manage networks of all sizes.

"Eighty percent of what large enterprise spend in IT goes toward maintaining and operating the current infrastructure, rather then investing in new projects," says Stephen Bowsher, general partner at InterWest Partners, a venture capitalist firm that has invested in Symphoniq, for one. "Venture capitalists go where the dollars go, and it's clear people are still spending on management technologies."

Here are 10 management companies topping our list as ones to watch:

CiRBA

Founded: March 1999 Richmond Hill, Ontario, Canada Gerry Smith, president and CEO, previously with Compuware and ChangePoint. $5 million investment from EdgeStone Capital Venture Fund II in February 2006.

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What does the company offer?

CiRBA's DCI (Data Center Intelligence) software detects detailed configurations, changes and differences across heterogeneous environments; stores them in a central repository; and lets network managers analyze empirical data to identify risks, problems, and optimization opportunities.

Why is it worth watching?

As interest in data center consolidation continues to rise, enterprise IT managers could look to CiRBA for a tool that accurately inventories their systems, those systems' utilization, and changes to the systems and the impact on performance and availability.

How did the company get its start?

Founded in 1999 to help data center operations managers "get a handle" on their environments.

Where did the company get its name?

CiRBA loosely translates to configuration item request broker architecture, a play on CORBA.

Who's using the product today? CiRBA lists Aetna, Bell Mobility (a division of Bell Canada), Interac, Lawrence Berkeley National Laboratory, Rogers Wireless and TD Bank Financial Group among its customers.

FiveRuns

Founded: February 2005 Austin, Texas CEO Steven Smith, previously CTO of Tonic Software (acquired by Altiris Software) and senior vice president of R&D at Neon Systems. $2.95 million investment from Austin Ventures in October 2005; currently securing second-round financing.

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What does the company offer?

FiveRuns Systems Management uses a software-as-a-service delivery model and monitors systems running Apache, JBoss, Linux, Macintosh OS X, Microsoft Windows, MySQL, Sun Solaris and Tomcat. Customers download client software, and FiveRuns hosts the management server at its data center.

Why is it worth watching?

At $60 per server, per month regardless of the number of CPUs or applications running on the server, the price may be right for customers who want to offload the task of monitoring and get started quickly.

"It's really an instant-results thing for customers," says Gary Chen, an analyst with Yankee Group.

How did the company get its start?

Smith saw a gap in the "stagnant" market to which the "big players couldn't scale down," and an opportunity to build a hosted service for small and midsize business (SMB) customers to monitor critical IT elements.

Where did the company get its name?

FiveRuns is the name of a creek in southern Alabama where Smith and his father used to fish.

Who's using the product today?

The company kicked off a beta program earlier this year, in which 1,500 potential customers downloaded the software, and invited 300 active testers into the program.

Kace

Founded: February 2003 Mountain View, Calif. CEO and co-founder Rob Meinhardt previously worked as a principal with R.B. Webber & Company (RBW), a strategic management consulting firm. $8 million from Norwest Venture Partners in May 2005; $3 million from Sigma Partners in July 2005.

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What does the company offer?

KBOX IT Management Suite, which is software packaged as an appliance for easy installation and maintenance. It targets company departments or SMBs. The initial appliance family automates daily tasks on servers, desktops, laptops, routers, switches and printers; a second product set performs provisioning.

Why is it worth watching?

Peter Solvik, managing director of Sigma Partners and former senior vice president and CIO of Cisco, sits on the board of directors. Norwest Venture Partners' Abbott says, "The fact that Kace delivers its products as appliances is unique, and the company has reached a critical mass of customers."

How did the company get its start?

Meinhardt saw an opportunity to serve the SMB market with automated network and systems management software delivered as an easy-to-install appliance.

How did the company get its name?

Meinhardt and Marty Kacin, co-founder, president and CTO, wanted a four-letter URL, and played off the latter's name.

Who's using the product today?

Kace lists the California Department of Housing and Community Development, Coinstar, New England Motor Freight and Freedom Mortgage among its customers.

Klir Technologies

Founded: November 2000 Seattle Co-founder and CEO James Maiocco previously worked as a corporate technology and business attorney. $8.7 million from Ignition Partners and MK Capital in June 2005; $3.2 million from several angel investors.

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What does the company offer?

Klir Analytics, hosted IT management software delivered as a monthly subscription service. It also just announced a free version of its entry level product.

Why is it worth watching?

The company is partnering with vendors and industry analyst firms and using Web 2.0 technologies to subsidize the cost of its software, making it available for free to customers managing a maximum of 25 devices.

How did the company get its start?

Founders acted on the opportunity to deliver software-as-a-service and provide a product to address the majority of IT management issues without expense and labor upfront.

How did the company get its name?

Klir is the phonetic spelling of the word clear.

Who's using the product today?

Klir lists CACI, ISI and Planet Beach among its customers.

Persystent Technologies

Founded: February 2002

Location: Tampa, Fla.

Management: President and CEO Ray Weadlock, previously served as CEO of Fortress Technologies.

Funding: $7 million in Series B round of funding, led by Valhalla Partners; $1.6 million in Series A funding by Inflexion Partners, Tall Oaks Capital and Village Ventures.

What does the company offer?

Persystent Enterprise software automatically resolves system issues with every PC boot, reducing the need for IT staff to visit desktops. It operates before the operating system loads on a client machine, after the machine loads its basic input/output system. The company says it works transparently to the end user.

Why is it worth watching?

"Customer service is an invisible monster; it can make you or it can break you," says Dick Hamann, vice president of IT and resources and CIO of Seminole Community College, outside Orlando, Fla. Tapping an automated feature that lets him shut down PCs after-hours is saving Hamann some "$65,000 per year in utility bills alone."

How did the company get its start?

While company founders were working on a problem for Compaq, they noticed desktop support requirements took up too much time and they created ways to reduce the manual efforts.

How did the company get its name?

A play on the company's value proposition, for instance, persistent performance, availability and compliance of enterprise desktops.

Who's using the product today?

Persystent lists Seminole Community College and Tennant Company among its customers.

Q1 Labs

Founded: February 2001 Waltham, Mass. CEO Shaun McConnon, previously served as CEO of Okena (acquired by Cisco) and Raptor Systems. $4 million in initial funding from BDC Venture Capital and New Brunswick Investment Management; $14.4 million in Series B funding led by Polaris Venture Partners and Menlo Ventures in November 2003; an additional $11 million from existing investors and new investor Globespan Capital Partners in June 2004.

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What does the company offer?

Its QRadar -- the radar in QRadar stands for real-time anomaly detection and resolution -- network behavior analysis system detects and responds to anomalous network behavior; builds real-time network-asset profiles and correlates events from enterprise security products.

Why is it worth watching?

Network behavior analysis software is the next wave of security tools that couple traffic monitoring and analysis with intelligence on known and unknown threats to better secure internal networks.

How did the company get its start?

Three technical experts, and later Q1 Labs founders, from the University of New Brunswick solved UNB’s security problem by inventing new technology to reduce the number of hostile attacks on UNB’s computer network.

How did the company get its name?

The founders turned for inspiration to the place that turned out the "coolest technical gear on the planet": the laboratories of Q, who armed James Bond with the tools and equipment he needed to survive in a hostile environment.

Who's using the product today?

Q1 Labs lists Borgess Health Alliance, Cornell University, Harvard University, NASA and the U.S. Army among its customers.

Spiceworks

Founded: January 2006 Austin, Texas CEO Scott Abel, previously co-founded MotiveFunding: $5 million in Series A round of funding led by Austin Ventures in June 2006.

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What does the company offer?

Spiceworks IT Desktop software, free for download, manages networks with as many as 250 devices, providing inventory, status and monitoring data on network systems, without requiring IT managers to distribute agents to managed devices.

Why is it worth watching?

The bulk of its revenue will come from the clickable ads featured in its IT Desktop console program. Users get the software for free if they tolerate such adware.

How did the company get its start?

Founders believed that existing tools provided more than IT managers needed to solve a majority of their daily problems, so they researched the market and decided to couple management capabilities with a Web 2.0, community-like application.

How did the company get its name?

The founders viewed the network and systems management market as an area that "desperately needed spicing up."

Who's using the product today?

About 5,000 users in 80 countries have downloaded and participated in an beta-testing program over the summer, among them are such companies as Nanocoolers and Pluck.

Splunk

Founded: The three founders joined forces in October 2002 and incorporated the company as Splunk in November 2004. San Francisco Michael Baum, co-founder and chief executive splunker, previously a co-founder of Collation, acquired by IBM's Tivoli software, Arthas, acquired by Yahoo and Reality Online, acquired by Reuters. $10 million in Series B funding from JK&B Capital and existing investors in January 2006; $5 million in Series A funding from August Capital and Sevin Rosen Funds in December 2004.

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What does the company offer?

Splunk Server is software that searches across logs, message queues, configuration files, SNMP traps and database transactions to correlate events more quickly that could be related to a failure -- and that network managers would typically have to search manually.

Why is it worth watching?

The company's software can be used as a complementary tool for existing network and systems management products, helping IT managers leverage existing investments. And Splunk was wise to make an open source version available earlier this year, further reducing the cost for customers adding it their tool kits.

How did the company get its start?

Company founders were frustrated in building and managing data centers and wanted to make navigating IT infrastructure "as easy as surfing the Web."

How did the company get its name?

The word Splunk is derived from the term spelunk, which is a verb meaning to explore natural caves.

Who's using the product today?

Splunk lists Dow Jones, FedEx, Sony and the U.S. Postal Service among its customers.

Symphoniq

Founded: January 2003 Palo Alto, Calif. CEO Hon Wong, previously co-founder and board member at NetIQFunding: $8.7 million from first round of funding in January 2003; $8.3 million from second round in June 2006; major investors in both rounds include the founders and Interwest Partners and Greylock.

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What does the company offer?

TrueView software monitors application performance from browser to back end to automatically detect, diagnose, and pinpoint problems.

Why is it worth watching?

InterWest Partners' Bowsher says, "Symphoniq can get to the root of a problem quickly by using automation and making people smarter, and that is critical because right now too much effort is invested in identifying problems."

How did the company get its start?

Former NetIQ executives, thinking about solving performance problems with Web-based applications, started Symphoniq.

How did the company come up with its name?

Part a play on symphony, based on how TrueView orchestrates the complex moving parts of Web applications to let them work in concert, with an "IQ" on the end to pay homage to the company's NetIQ roots.

Who's using the product today?

Symphoniq lists Milliman and Wallop, a start-up spun out of Microsoft IP Ventures, as its customers.

Uplogix

Founded: December 2003 Austin, Texas CEO Barry Cox, previously with AlterPoint, where he was responsible for product design and release management of its network device configuration management product. $7.0 million round of Series B financing from Adams Capital Management and returning support from existing investors in April 2006; $3.6 million in first-round funding from Fayez Sarofim & Co. and individual investors in July 2005.

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What does the company offer?

The company's family of Envoy and EMS network management appliances enables out-of-band connectivity -- meaning if the network goes down, the devices can still be reached -- to support remote offices, and automates several processes for diagnostics and recovery, reducing the need to staff distributed locations.

Why is it worth watching?

"Deploying staff to remote locations is costly and disruptive. The ROI of this type of technology will be invaluable as more companies look to consolidate data centers," says Dennis Drogseth a research vice president with Enterprise Management Associates.

How did the company get its start?

Founders were convinced there had to be a way to manage the edge of the network without relying solely on the network to do so.

How did the company get its name?

The name comes from "the logic to increase uptime for networks." They were listening to Stevie Ray Vaughn on the radio playing "Little Wing," a Jimi Hendrix song, and were inspired to end the spelling of the name with an X.

Who's using the product today?

Uplogix lists Prairie View A&M University and RigNet among its customers.

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