By: Peter Williams, Practice Leader - IT Infrastructure Mgmt., Bloor Research
Published: 23rd September 2013
Copyright Bloor Research © 2013
SolarWinds has come a long way in a decade. A company with its roots in network support IPO'd four years ago and now boasts advanced and well-integrated suites covering pretty much the whole IT management spectrum. So where to now?
It may surprise many that SolarWinds, having had such a low marketing profile, has close to 150,000 users around the world (albeit most are in the US) and a market capitalisation of around $3Bn. In October 2012 Forbes magazine named SolarWinds the best small company in America.
I identified some historical reasons for its sustained rapid growth when I first looked at SolarWinds nearly six years ago. At that time it could not compete with the 'Big Four' (HP, Tivoli, CA, BMC) at the high end, but much has changed since. What it already had was a simpler-to-use and much more affordable offering for the mid-market and below - with software developed by engineers for engineers; they were its product champions. By then SolarWinds already had some 45,000 users with new clients being added at around 2,000 per month mostly through positive word-of-mouth in the network specialist community. This situation continued through SolarWinds' 2009 IPO.
The core of SolarWinds' business was centred on SolarWinds Orion network management platform consisting of its flagship network fault, performance and availability monitoring product aptly named SolarWinds Network Performance Monitor (NPM); this was complemented by its Engineer's Toolset to help network specialists trace and fix networking faults quickly. Since the introduction of SolarWinds NPM, the Orion platform has been extended with a series of other key products supporting: traffic monitoring, change and configuration management, IP address management, port tracking and VoIP and network quality. SolarWinds NPM's scalability is proven through around 10 users of this software now monitoring in excess of 25,000 nodes, two having over 100,000 nodes.
Besides the Orion platform, far more is nowadays included in SolarWinds' broad range of IT management product offerings, grouped into server and application management, virtualization management, storage management, and security information and event management.
Denny LeCompte, SolarWinds' SVP of Product Strategy, told me that the company does not sell solutions, but instead offers an à la carte selection of tools. So I asked: "How do users get to know and navigate around so many individual products?" His answer focused on the user interface. Whereas CA, for instance, will match SolarWinds in a check-box, "Ours is obvious." he said - meaning that users get a consistent look-and-feel so do not need months of training to learn how to navigate around the suite. Acquired applications are given the same look-and-feel by SolarWinds' common user experience team who also more tightly integrate them with other applications in the suite to yield synergistic benefits.
So what is the profile of a typical SolarWinds user? There are, of course, users of all sizes from within the Fortune 500 down, but LeCompte said the predominant group right now remained mid-market in terms of IT shop size (i.e. as distinct from company size), who typically have a stand-alone support team of maybe 5-10 persons specialising in different areas rather than a full network department. For instance, there might not be a security specialist per se but individuals would devote some of their time to this. The average user now deploys around 2½ of the main product groupings (typically including the two biggest sellers - SolarWinds NPM and SolarWinds Server & Application Monitor (SAM)).
This is the point of increasing the products and product groups of course; adding more functionality, alongside achieving a higher-than-average user retention rate, will help ensure an ever-increasing annual maintenance revenue stream from existing users.
Now, I should more directly tackle the thorny question of whether SolarWinds can now really attack the high-end marketplace. Enterprise class features at a fraction of the cost and ease-of-use and deployment, while still scaling to the largest deployments, are what SolarWinds claims sets it apart from the Big Four. So what enterprise features does it offer?
SolarWinds NPM includes dashboards, alerts, reports and expert guidance on how to monitor what - all out-of-the-box. It does network fault detection, diagnosis and resolution including before an outage even occurs. As well as automatically discovering SNMP-enabled devices such as routers, hubs and switches, it thereafter tracks their availability and uptime; it also monitors response times and provides real-time performance stats through dynamic network maps into which the user can drill down to, for instance, pinpoint a bottleneck. It also includes more advanced network diagnostic features including network route and IP multicast monitoring.
Among the features of SolarWinds SAM are: multi-vendor hardware monitoring (HP ProLiant, IBM System X, Dell PowerEdge, VMware ESX/ESXi hosts), application monitoring for nearly all applications (including MS Exchange and Active Directory, IIS, all ODBC databases), server management to isolate problems quickly, re-start servers, start and stop services and kill processes.
SolarWinds Virtualization Manager includes real-time dashboards to identify and correct performance, capacity or configuration problems as well as virtual machine (VM) sprawl - then can consolidate VMs (reducing licence costs) and optimise server space. It integrates with SolarWinds SAM to achieve application stack management at every level.
SolarWinds Storage Manager provides automated multi-vendor storage performance and capacity planning and management, with storage usage analysis and space reclamation support. Among its performance features is the isolation of hotspots in the SAN fabric and, critically, it provides mapping of VMs to the physical storage they are using. LeCompte confirmed that SolarWinds Storage Manager can see all the way through from the VM to its virtual storage, highlighting two VMs addressing the same data when one has little activity while the other is thrashing trying to get access. Such meaningful diagnostics are needed to maintain a healthy IT environment.
SolarWinds products' ability to easily scale to installations with hundreds of thousands of devices has come through improvements to the underlying software; they now meet the needs of the largest distributed installations but still maintain the ease-of-deployment and use that has made SolarWinds among the most popular vendors for the mid-market.
SolarWinds is also differentiated from more traditional enterprise offerings by its product development and release cycle. Product features are influenced primarily by its active on-line user community, thwack. "We rely heavily on user feedback and are strategically incremental with our product development." said LeCompte. The company provides non-disruptive migration to new releases which come out every six-eight months (more often than other high-end players).
In SolarWinds' business model, there are no plans for outside sales personnel to compete head-to-head with the Big Four. Instead, it makes each product grouping easy to self-evaluate before purchase without a need to involve expensive outside consultants (unless the board wants the peace of mind of a comprehensive comparison report, which might well still recommend SolarWinds). An internal sales force handles potential clients, over the phone and/or using web-meetings (some backing a reseller relationship) and also provides quotations and closes the business; sales engineers provide more technical help to customers. All of this contrasts with each of the Big Four who rely on significant revenues from their own consulting and services for evaluation guidance and implementation.
Needless to say, some areas still need addressing. For instance, LeCompte said "We have a toe in product security" pointing to plans to beef this up. So far it includes server and domain controller monitoring for failed logon attempts, real-time and in-memory event correlation to immediately respond to security breaches and the ability to kill unexpected processes and close breached systems with instant action taken against hacking attempts. Various other analyses are also offered.
More features are also planned for application management and SolarWinds is not yet heavily addressing the cloud (as take-up for cloud in production is not great). As for Big Data, LeCompte agreed with me that it is still a buzzword as yet awaiting nicely-packaged solutions. He added, "Our users are typically late adopters" - indirectly endorsing the company's continuing commitment to enhance existing products and add new ones based especially on end-user feedback.
Conversely, SolarWinds is now working to build much greater brand awareness, especially internationally (outside the US). Every IT department in the world could potentially use some of its à la carte portfolio, giving it a massive opportunity if it can get on companies' radar. LeCompte confirmed some key messages which I can accept: SolarWinds has long-since ceased to be a niche player by building a very broad IT portfolio of products, and all of these are easy to use, feature-rich, scalable and cost-effective to deploy.
When I looked at the company six years ago, it lacked this product spread and scalability but was already on the right track. Its expansion has probably obviated an earlier risk of being swallowed up by a large infrastructure vendor. Rather, with a large product portfolio and major cost and user-friendliness advantages over the Big Four - underpinned by revenues from a huge existing user base - there is no obvious reason why we should not soon talk about the high-end infrastructure management market in terms of the Big Five.
Posted: 24th September 2013 | By Kate Brew :
I worked for SolarWinds briefly, before being lured away by a startup. Their business model is brilliant and disruptive to competitors - they deliver consistently good quality products at a fraction of the cost of alternatives. This is due to the points you make: they listen carefully to what customers need and deliver what is needed at an affordable cost, due to their ultra-efficient business model. I've never worked for a company in IT that consistently delivers what customers need the way SolarWinds does.
Posted: 24th September 2013 | By Cuca Beludo :
Sounds like a marketing piece!! Hope it didn't cost them much since they're stock just went down about 40% in the last 6 months!!
Posted: 9th October 2013 | By Kate Brew :
Just noticed this comment from Cuca Beludo. Hate to not deliver drama, but there was no reason for me to make this post except for sharing what I learned at SolarWinds and concurring with some observations in the article. SolarWinds is not the type of company to do the sort of thing you suggest - very above-board from everything I've seen. I'm a bit nonplussed at the insinuation. I did go ahead and buy 100 shares of the stock subsequent to reading this article and making my post, because, as you say, it is at a good price point. My 100 shares are down a couple of bucks, but the market is also down... Sorry, no drama here.
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