The market for Web performance solutions has experienced significant changes in 2010 and many of the trends that have been driving new dynamics in this market are expected to be even more accelerated in 2011.

Traditionally, these types of solutions have been predominantly deployed by large Web properties (media, entertainment, social networks, etc.) and organizations that are either using their websites to generate revenues or rely on Web portals to share information internally. However, changes in the way that business users are accessing corporate data are causing Web applications to became more than just revenue generating, branding or collaboration tools. In 2010 we have seen applications that are being accessed through Web browsers and delivered over public Internet become more critical beyond business-to-customer (B2C) environments, as organizations are increasingly using these applications to communicate with their employees and partners.

End-user organizations who participated in TRAC’s recent survey reported that they anticipate 11% of overall network traffic that is currently being delivered over corporate private networks to be delivered over public Internet in the next 12 months. Deployments of SaaS applications, more organizations considering and deploying Infrastructure-as-a-Service (IaaS) models and looking to achieve cost savings by leveraging advantages of public Internet are increasing the importance of managing Web performance. As organizations are becoming more dependent on the performance of Web applications they are also realizing that some of the same trends that are driving increases in the importance of these applications are also posing new performance management challenges.

New challenges of managing Web performance are forcing both technology vendors and end-user organizations to respond, which in turn is driving new dynamics in this market. Based on TRAC’s recent research, we identified ten areas that are significantly impacting how different flavors on Web performance management solutions are being deployed and managed, as well as some of the capabilities that are becoming more important in this market.

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).

Web experience monitoring solutions have traditionally been drawing interest from industry sectors that conduct most of their business online. With the proliferation of public cloud services and SaaS applications, more internally facing business-critical applications are being delivered across the public internet and accessed through a Web browser. Having full visibility into the performance of these applications requires capabilities for monitoring performance from outside of the corporate firewall, which increases the importance of and creates new usage scenarios for Web experience monitoring solutions. These new opportunities in this market have caused new vendors to enter this space and try to challenge a market leading position that has been held by companies such as Keynote Systems and Gomez (a division of Compuware).

This Solution Overview report from TRAC Research examines the technology capabilities, strengths, and weaknesses of Catchpoint Systems, a company that has recently entered the Web experience monitoring market.

Click here to download the report

Today, Keynote Systems and dynaTrace announced a strategic partnership that would allow end-users to leverage these two solutions in an integrated fashion. This is the second strategic partnership that Keynote has created in this space over the last two months, as they formed a similar type of relationship with OPNET Technologies that was announced on July 22. These partnerships might be confusing to some, as it might seem that these three companies are essentially doing the same thing: to monitor the performance of business-critical applications. However, while Keynote is specializing in monitoring the quality of end-user experience and performance testing for Web applications from the outside of the corporate firewall, OPNET and dynaTrace provide solutions for monitoring application performance across enterprise infrastructure inside of the firewall.

The general perception of solutions for end-user experience monitoring, such as the one that Keynote is providing, is that they are very effective in identifying when business users are experiencing problems with application performance, but they are not as effective in drilling down into parts of the application delivery chain to isolate and resolve the root cause of the problem. On the other hand, tools for monitoring the performance of internal infrastructure, such as OPNET or dynaTrace, are able to monitor the transaction flow of applications across the network and into the data center, and provide a deeper dive into how applications are performing, what is causing performance problems and how they can be prevented and resolved. TRAC’s recent report “10 Things to Consider When Evaluating End-User Monitoring Solutions” revealed that the ability to integrate tools for monitoring the quality of end-user experience with tools for monitoring enterprise infrastructure is one of the key aspects of having full visibility into application performance. With that said, there is a clear value that end-user organizations can experience when products that include robust capabilities for application performance management (such as OPNET and dynaTrace) get integrated with one of the leading solutions for end-user experience monitoring from outside of the firewall (Keynote).

However, in order to evaluate a true significance of these partnerships, they should be analyzed in the context of some of the key dynamics in this market.

One of the emerging trends in IT performance management is that the proliferation of SaaS and cloud computing technologies are changing how organizations go about using and managing IT services. These trends are adding a new dimension to service level and performance monitoring and organizations are increasingly expecting a similar level of flexibility from their management tools as they are getting from their SaaS and cloud deployments. This also opens up new opportunities for management vendors to differentiate themselves from the competition and increase their presence in new markets by acquiring technologies that are well positioned to address new management challenges.

Our recent article highlighted two technology companies that are likely acquisition targets based on their technology, alignment with key market trends and the ability of their solutions to fill in technology and go-to-market gaps that larger vendors currently have. In part two of this series, we are covering two additional companies that meet the same criteria.

Again, this listing is not based on any inside information.

TRAC Research recently conducted a podcast with Vik Chaudhary, VP of Product Marketing at Keynote Systems. Vik provided his insights about key trends in the Web Experience Monitoring market, the top capabilities end-user organizations are asking for as well as the impact that technologies such as SaaS and the Cloud are having on this market.

This podcast also includes topics such as KPIs that top performing companies are using to measure the quality of Web experience, the importance of Web Monitoring tools beyond business-to-customer (B2C) environments, and the best practices for dealing with changes in end-user expectations.

Here are some of the key insights from this podcast.

“Key performance metrics that high performing websites are measuring are: page download time, content generation time, time taken by a browser to render an application, geographic uniformity, load handling, peak availability and outage hours.”

“Top two capabilities that end-users are asking for are: 1) Monitoring performance of applications from a perspective of mobile users and; 2) Web monitoring capabilities that pinpoint both the third-party components on your page (ads, common login components, Web analytics, etc.) and an individual Web servers and infrastructure components that are causing performance problems.”

“The Web Experience market in 2009 has matured tremendously. What we see is that both IT operations teams and business managers are recognizing that the need for accurately monitoring performance of applications. They want to do monitoring of these applications by using synthetic approach, which is something that Keynote does, but they also want to do more of real end-user monitoring”

Click here to listen to the podcast

Over the last 2-3 years, the term “Application Performance Management” (APM) became an integral part of marketing messaging for more than 70 technology vendors. Even though solutions provided by all of these vendors are helping to improve the speed and availability of business-critical applications, these vendors are providing solutions that are significantly different. These solutions could range anywhere from network performance monitoring to application acceleration, Web management and even managed/carrier services.

However, the APM as a general concept has become relatively easy for decision makers of end-user organizations to digest, as it hits all key pain points that IT organizations are dealing with. As a result, multiple vendors were more than happy to jump on this bandwagon and position themselves as players in this space.

Other than the language in their press releases and marketing collateral, these vendors really have nothing else in common. Technology wise, how similar are the offerings of F5, NetQoS, Keynote Systems and OpTier? They are not similar at all.