TRAC's article from October, 2010, "BI Becoming the Key Enabler for IT Performance Management" talked about how the complexity of managing IT performance is driving the need for new analytics and reporting capabilities for IT management solutions. These capabilities are especially important when it comes to monitoring network and application performance – a deeper and wider view of the application infrastructure is vital as companies add more complex and dynamic IT services. Many organizations that use several APM solutions at the same time report that they still do not have enough visibility into application performance and, as a result, struggle with troubleshooting and repairing performance issues. The relevance of application performance data largely depends on how well they fit an organization's particular use case and thus the metrics collected "out of the box" by APM solutions may not fit the problems that they are trying to solve.

ExtraHop Networks recently announced version 3.5 of their Application Delivery Assurance system, a key part of which is a technology called Application Inspection Triggers. This capability allows organizations to define metrics to be captured at network speeds through the use of scripts that are customized to solve a particular problem. These metrics can be uniquely tailored to meet the specific needs of each organization or IT department with custom alerts and reports suited to the metrics being collected. The granularity of the collection process can be as fine as required to isolate problems, even down to collecting information about individual users, files or program statements.

What makes this announcement even more interesting is the core technology that ExtraHop uses to monitor network and application performance. ExtraHop's solutions are an interesting combination of capabilities for both network and application performance monitoring – the company provides appliances for passive monitoring of network traffic, but is different than traditional network visibility tools as it provides increased visibility into application performance, as well as the ability to monitor the impact of different infrastructure elements, such as storage or database, on application performance. The depth of information that ExtraHop's appliances capture and the fact that this information is captured in real-time make Application Inspection Triggers even more effective because of the flexibility of the metrics that organization are able to capture.

From an industry standpoint, there is no shortage of vendors that monitor application performance, but the real question is what capabilities really make the difference between seeing wider and deeper into the application infrastructure and having the ability to solve performance problems. In addition to ExtraHop, other vendors are realizing that what really makes the difference in performance management is how the data that is collected is being processed and presented to IT decision makers. A good example of a company that understands the value of making data relevant is SL Corporation, whose RTView product enables organizations to get more out of the data collected by their APM tools by aggregating it and providing an additional level of analysis and reporting. Another example is Prelert, who provides a solution that leverages data collected by other APM tools and applies a self-learning technology to improve the ability to troubleshoot and repair application performance issues.

The well-controlled and monitored application infrastructure that existed ten years ago has been replaced by a dynamic and sometimes unpredictable mixture of local servers, virtualized applications and the cloud. In order to be able to effectively manage these types of environments, organizations need to be able to do more than just monitor packets, servers or application components and ensure that performance data that is being delivered to IT staff is truly relevant. One of the key value propositions of business intelligence - the ability to deliver the right information to the right people at the right time -- is becoming a key differentiator for APM vendors and ExtraHop's recent announcement is a significant step in that direction.

Industry analysts tend to classify vendors into technology "buckets" and create "labels" for each of them, as that makes it easier to compare products, capture key trends and provide context around problems that these products are addressing. This method also resonates with some technology marketers, as it allows them to partially benefit from promotions that other vendors and media are conducting around a label of a technology bucket their product was put into.

The term "application performance management" (APM) has been one of the hottest technology "labels" over the last few years. Performance of enterprise applications impacts nearly all of the key business goals, and it shouldn't come as a surprise that technology solutions for managing performance of these applications has been very high on IT agendas. With that said, it should be even less of a surprise that technology vendors, who are involved in managing the delivery of applications to business users in any way, realized this opportunity and started calling themselves "APM vendors". However, every "hot" industry term has an expiration date attached to it and sometimes it doesn't take long for a company to go from being one of the biggest promoters of an industry term to getting to the point where it doesn't even want to be associated with it.

Back in 2008, there were more than 50 technology vendors that used the term APM to position products that they provide and that number is now down to less than 30. So, had these 20+ companies gone out of business or completely changed their product portfolios? No, but they had realized that the term APM got diluted and that it is in their best interest to separate themselves from technologies that address the same problem as they do, only from a different perspective.

Emergence of new categories

Being thrown into the same technology bucket with companies that are addressing a similar problem from a different perspective could be a major challenge for many technology companies. Organizations that are in this position typically have two options: 1) wait until the market matures to the point when it becomes obvious that their solution is significantly different than other products in the same "bucket", or 2) coin a new term to describe a category in which their product belongs, promote the heck out of it and hope that it will become an industry accepted term. It took a combination of these two approaches to somewhat change the boundaries of the APM "bucket". That resulted in more market awareness about the differences between two groups of products that are also addressing challenges of managing application performance, but doing it from different perspectives: end-user experience monitoring and business transaction management (BTM).

The increased interest of end-user organizations in having visibility into how their applications are performing, not only from the perspective of their IT departments but from the perspective of business users, resulted in more market awareness about the role that end-user experience monitoring solutions are playing in managing application performance. The market matured enough to become more aware of the fact that different flavors of technologies for monitoring the quality of end-user experience, such as those provided by Aternity, Knoa Software, Coradiant or AlertSite, do not compete against, but complement vendors such as OPNET, OpTier or Quest's Foglight.

On the other side, vendors that specialize in managing application performance from a business transaction perspective also found a way to raise awareness about the differences between their solutions and many other APM products. This resulted in an increased adoption of the term BTM when describing capabilities of these solutions. These solutions are taking a different approach when addressing issues with application performance, as compared to some other APM vendors, and enable organizations to monitor the performance of applications across an entire transaction flow. Some of the vendors that fall in this group include OpTier, Nastel, INETCO, Correlsense, Precise Software, dynaTrace and AmberPoint (acquired by Oracle).

On October 22, Riverbed acquired CACE Technologies, a network monitoring vendor. CACE provides solutions for network traffic capture and analysis and it is also a sponsor of Wireshark project, an open-source network monitoring tool that is being deployed by millions of end-users. CACE's products will become a part of Riverbed's Cascade business unit and Riverbed stated that Wireshark will remain a free tool.

This acquisition can impact Riverbed's market position in three key areas.

1) WAN Optimization

Riverbed has been experiencing a lot of success in the WAN optimization market and many of their competitors find it difficult to compete with data reduction and the acceleration capabilities of Riverbed's Steelhead technology. Even though WAN acceleration techniques alone are enabling organizations to improve application performance over the WAN, due to complexity of WAN traffic, organizations are increasingly looking for WAN optimization solutions that couple acceleration techniques with capabilities for visibility into WAN performance.

Riverbed responded to this trend by acquiring a network visibility vendor, Mazu Networks, in January of 2009. Even though the Mazu acquisition allowed Riverbed to add advanced network monitoring capabilities to its portfolio, it didn't significantly impact Riverbed's position in the WAN optimization market, as Mazu products were provided as a separate product offering from Riverbed's WAN optimization gear through the Cascade business unit. Riverbed did take several steps to tighten integration with Cascade solutions, but it hasn't provided both acceleration and visibility capabilities on a single platform, which is the approach that vendors, such as Exinda, Expand Networks, Ipanema Technologies and Silver Peak, have being using to create competitive advantages.

The acquisition allows Riverbed to enhance visibility capabilities of their WAN optimization solution by integrating CACE Pilot with their Steelhead appliances. CACE Pilot is a solution for analyzing network performance and using it to process data that is being collected by Steelhead appliances will enable Riverbed to provide WAN acceleration and visibility capabilities through the same platform.

Network performance monitoring solutions are not one of those “cool” technologies that get a lot of coverage in the media and these products are sometimes perceived as using an old approach to solve new problems. It’s all about capturing and analyzing packet flow data, right? Well, not really. Not many people realize how much this market has changed over the last 3-4 years.

TRAC Research will cover trends and key vendors in this market in several upcoming reports, but here is a high level overview of 4 key trends that drove some major changes in this market.

It is About Applications on the Network, Not the Network Itself

Back in 2006, I conducted a number of interviews with folks that were in charge of network performance.  The top metric that they were using in that time to evaluate how their networks were doing was unplanned network downtime. I did a similar round of interviews in late 2007 and unplanned network down time wasn’t even one of the top three KPIs that they were using to evaluate network performance (even though it was still extremely important for them). Between these two rounds of interviews, metrics, such as application response times and application availability, became the top indicators of the health of enterprise networks. These changes in end-user needs had a major impact on network monitoring vendors. They caused several major acquisitions, a lot of significant product upgrades, new vendors entering this market, significant changes in messaging and positioning and opened several new markets for vendors that were able to adjust to these changes.