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 emulation technology was originally designed to help network managers, IT operations teams and developers to create lab environments that simulate their actual network conditions for testing application performance in pre-production. These solutions allow organizations to use historic network performance data to create virtual testing models that generate information about expected levels of performance and help eliminate network performance bottlenecks before applications go into production. Providers of this type of technology include: Anue Systems, Apposite Technologies, iTrinegy and Shunra Software, while OPNET provides a somewhat similar solution for building network models. End-user organizations are reporting that the accuracy of simulated network environments created by these technologies is around 95% and that, somewhat quickly, these solutions pay for themselves. Some organizations that I have had the chance to speak with reported that their network emulation products have paid for themselves four times over in just labor costs alone, as they significantly reduced the number of incidents with application performance in production that IT teams had to deal with.

Network emulation technologies have been around for a while and even though they provide some measurable business benefits for organizations, they never reached wide-spread adoption in the enterprise. One of the main reasons for this is that many organizations are interested in using these solutions only when they are planning new technology rollouts or making changes to existing applications and, therefore, larger organizations that are building a lot of custom applications and have new rollouts almost on a weekly basis have been the main beneficiaries of these solutions. On the other hand, organizations that have only a few new technology rollouts per year have not been able to justify making investments in network emulation solutions. Vendors in this space have been trying to make their solutions more accessible to end-users by providing their capabilities as a managed service or adjusting pricing models, but the key obstacles for the wide-spread adoption of this technology still remains.

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.

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.

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.