Sanjeev Aggarwal's Blog

July 31, 2011

Dell KACE M300 Appliance Enables Small Businesses to Take a Proactive Approach to IT Asset Management

Filed under: Blogs - Sanjeev Aggarwal, Infrastructure, Small Business, SMB, TCO — Tags: , , , , , — sanjeevaggarwal @ 12:49 pm

Dell KACE recently introduced a new series of System Management Appliances targeted at small businesses with 20-200 employees. The Dell KACE M300 Asset Management Appliance is designed to deliver an affordable, plug-and-play IT asset management solution that reduces the repetitive, time consuming task of managing PC inventory and software licenses. The KACE M300 provides a robust yet easy-to-use asset management solution—saving these businesses time and money, while at the same time addressing their compliance and inventory management issues.

Perspective

Dell’s KACE systems management and deployment appliances are designed to meet systems management needs from initial computer deployment to ongoing management and retirement. Dell acquired KACE, which designs and builds systems management and deployment appliances, in February 2010. KACE solutions are available both as physical appliances (delivered as a pre-packaged hardware and software appliance) and as software-only virtual appliances, which customers can buy and load onto servers they already own.

Higher-end products available from Dell KACE (K1000 and K2000) have been available for some time. Since Dell acquired KACE, sales have spiked considerably year-over-year. However, the existing KACE offerings are designed for companies with 100 to 10,000 employees, and cost more than most small businesses are willing to spend in this area.

With the introduction of the M300, Dell is making a play in the true small business market, targeting customers that want a simple plug-and-play appliance to meet their asset management (both hardware and software) needs. The solution is designed for smaller businesses that often have a part-time IT manager, typically overloaded with installing software and keeping systems and client devices up and running, and frequently unable to keep up with the detail-oriented task of tracking hardware and software assets.

Many small business IT managers are still trying to manage assets and software licenses in a manual manner with spreadsheets. While manual tools provide a point in time snapshot of a network, the information rapidly becomes obsolete as computers are added or additional software is installed on existing computers. IT managers either end up spending too much time trying to keep this up-to-date, or end up with outdated asset inventories. Offloading the labor-intensive minutia involved in this job can free them up to focus on more important things.

Although there are some free and small business oriented solutions in the market, Dell’s strong market footprint in the market and direct relationships with existing small business customers provide it with a significant go-to-market advantage, and the opportunity to educate small businesses about the benefits of investing in IT asset management (Figure 1).

Figure 1: Benefits of IT Asset Management

Strategic Benefits
  • Reduce over-spending on IT hardware and software assets by increasing asset utilization
  • Reduce IT resources (and time) required to routinely manage and maintain IT hardware and software assets and related annual operational costs
  • Increase useful life of IT assets through ongoing configuration and upgrade monitoring
  • Increase utilization of assets by optimizing performance of IT assets
  • Reduce downtime by optimizing configurations and timely upgrades of assets
  • Reduce break-fix costs by maintaining proper asset warranty information
  • Support audit and compliance requirements and mitigate risk of non-compliance and costly legal/financial risks
  • Records and reports when new devices are connected to the network
  • Detects hazardous software packages across the network
IT Hardware Asset Management Benefits IT Software Asset Management Benefits
  • Reduce server and PC procurement, upgrade and ongoing management costs
  • Extend the useful life of these hardware assets
  • Reduce costs by redeploying unused or under-utilized hardware systems
  • Keep track of licenses and upgrades for PCs migrating to Windows7 and identify PCs that are configured adequately for upgrade
  • Easily identify PCs that need replacement or upgrades


  • Maintain an accurate inventory of installed applications to ensure legality and that software is up to date
  • Maintain a centralized report of license purchases and maintenance to ensure license compliance
  • Reduce operating system, middleware and application procurement, patching, upgrade and ongoing management costs
  • Reduce costs related to un-used or under-utilized middleware and application software licenses (for both on-premise and on-line software)
  • Optimize software assets by redeploying unused software licenses
Source: SMB Group, 2011

In line with small business requirements to keep it simple, the M300—features easy set up. The IT manager plugs the M300 into the network, and the device automatically scans and discovers all the devices on the network, obtaining information like system names, IP addresses, vendor, models numbers, memory and disk space, etc. In addition to the hardware configuration, the M300 keeps track of all the software licenses, what systems the software is installed, version of the software and level of patch updates, etc.

The M300 continuously tracks computers and software, and can report accurate information in real-time and for compliance purposes at a specific point-in-time. The web-based intuitive user interface of the appliance shows real-time information on all of the monitored parameters. It can match the installed software with the number of software licenses purchased and also authorized users who can use the software. It shows online or sends out reports and/or alerts on any of the monitored parameters. For example, an alert will be issued if an unapproved application is downloaded and installed on a monitored PC or if a new PC is connected to the network.

Priced at $2498, the M300 includes a one year warranty and supports a maximum of 200 nodes. Assuming the useful life of the M300 to be 3 years, we estimate the cost to monitor each node (desktops and servers) on the network at approximately $0.49 per month per node in a company with 200 nodes. Figure 2 shows the cost per node in smaller companies (with less than 200 notes?). Given the cost of a full time IT manager to be approximately $75,000 per year, the M300 will pay for itself in about 1 month. In addition, the M300 can relieve the pressure and any additional costs related to non-compliance in terms of number of software licenses, etc.

Figure 2: Tracking Cost Per Node, Per Month with the M300
Source: SMB Group


The M300 is compact–measuring just 1.52 x 5.79 x 5.79 inches, connects to the network via a single gigabit Ethernet port, and is currently available in the U.S. only.

Sales are both direct from Dell and via Dell partners. KACE has added about 100 new certified partners since Dell acquired it and currently has 143 channel partners in North America. KACE is aggressively recruiting new partners to help it expand its footprint and reach Dell’s large customer base in the small business segment.

Dell’s future plans include additional appliances that can be stacked on top of the M300 and will address time consuming IT management functions like OS installs, remote management, mobile devices, service desk, etc. as the systems management needs of these small businesses expand, without the need to rip and replace their current solutions and investments.

Quick Take

Cost-efficiency, productivity benefits, ease of installation and peace of mind benefits—aided by Dell’s strong clout in the market—should enable Dell to make significant inroads with KACE in the lower end of the SMB space. And, Dell’s plans to incrementally build on the current M300 offerings with additional appliances for other repetitive tasks such as installing network operating systems, imaging and data backup make sense. However, Dell can significantly strengthen its story–and sales–by:

  • Offering small businesses the option to add at least some new functionality via software upgrades to the M300 appliance. Although the small business KACE appliances have a small form factor, some companies will balk at buying additional boxes (not to mention that Dell wants to move away from its “box-provider” image!)
  • The M300 is a first in the M-series line of appliances from KACE. The M-series is designed to deliver system management technologies to small businesses that they previously were unable to gain access to due to cost or complexity of solutions.
  • Incorporating capabilities to manage non windows based clients and networked storage devices.
  • Enabling remote management features to enable channel partners to offer incremental value-added IT infrastructure management services. This would not only have appeal for customers, who like to have a one-stop shop, but for partners, that can build higher margin services on top of the M300.

Looking at the larger picture, the KACE M300 provides further evidence of Dell’s deepening commitment to small businesses. Dell continues to invest in and build innovative yet practical solutions that address real small business pain points without breaking the bank. Small businesses increasingly rely on technology to run their businesses, and Dell’s focus on supplying them with easy-to-use solutions such as the KACE M300 to help manage this technology is on the mark.

January 28, 2010

Mid-Market companies benefit from the significantly better ROI offered by the synergistic relationship between ERP and BI

Strong value in considering/purchasing ERP plus BI simultaneously/at the beginning of the implementation cycle

ERP solutions come with a reporting toolset consisting of a predefined set of reports and with general purpose query tools to generate reports from data within ERP database. Most often, these tools are difficult and confusing to use and rely on an IT team to deliver the requested report, which can take time. ERP systems provide acceptable reports on day-to-day operations but if business requirements change, these static ERP reports need to be customized. Business users need on-demand reports, which are cumbersome and expensive to deliver in a timely manner. By using BI reporting solutions, these systems empower the business user to define and generate the needed reports, freeing valuable IT (or consultant) resources in the process, such that data and time can be better exploited to make meaningful business decisions.

I have been talking to several mid-market companies that have implemented ERP solutions followed by a business intelligence solution (initially deployed for reporting from the data in the ERP solution). Their recommendation, based on their experience of deploying both solutions, is that mid-market enterprises should consider utilizing ERP and BI together (possibly through a planned phased implementation approach), a strategy that would realize significantly higher ROI versus the alternative of considering each independently of the other.

The crux of this recommendation comes from closely looking at the customizations required to make the ERP solution useful for these companies. A significant number of customizations needed in ERP systems are related to generating reports to provide detailed information (in part, similar to that previously obtained through their formerly implemented legacy systems) for decision-making and presenting it in a useful and easy-to-understand manner—a daunting and expensive proposition. Complementing a BI solution with an ERP solution makes the generation of reports required by corporate management and various lines-of-business very easy and eliminates the need for any extensive customizations (as was required to generate these in an exclusively ERP system). The right business intelligence solutions can help extract significant value from the extensive data repositories in an ERP solution. The combination of ERP and BI should also bode well for mid-market companies in the current difficult economic environment, as companies strive for maximum efficiency by looking to cut costs and realize projects that provide them with short-term returns. The companies that have already implemented ERP could benefit by focusing on BI solutions for reporting, corporate performance management and consolidation (CPM) and strategy planning.

Mid-market customers using SAP Business-All-in-One as their key ERP solution have said that the extra time, effort, and money spent to customize their initial ERP could have gone towards paying for a BI solution (in several of the cases they were using SAP BusinessObjects Edge BI). Additionally, the reports they now get from their SAP BusinessObjects solutions (after integration) are more detailed and accurate than before. Other added benefits of this integrated solution—including savings on maintenance, IT administration time, integration and consulting support for upgrades, etc—largely result from the fact that SAP has already spent the time and effort to tightly integrate these two solutions providing better workflow and departmental self-service capabilities to develop and customize reports for their needs. With this solution, individual users can also more easily drill down from these reports to get deeper context to explain the factors influencing what is shown in reports beyond the visually attractive graphs and tables.

As a result, this combined SAP Business-All-in-One and SAP BusinessObjects Edge BI solution could provide significantly better Return on Investment (ROI) than each solution considered independently, and if the SAP BusinessObjects Edge BI can be paid for by reducing the customizations required in SAP Business-All-in-One, the combined solution also has a much lower total cost of ownership (TCO). With the mid-market focused Business All-in-One fast-start program from SAP coupled with the SAP best practices for the SAP BusinessObjects Edge BI for reporting and CPM solution, mid-market enterprises will be able to benefit from fast deployment, more productive and streamlined solution.

November 8, 2009

Increasing interest for Corporate Performance Management (CPM) in Mid-Market Enterprises

In today’s world overloaded with buzzwords, terms such as “Business Intelligence (BI)”, “predictive analytics” and “Corporate Performance Management (CPM)” are confusing to mid-market enterprises.

BI technologies provide historical views of a company’s business operation. Some of the enterprise –class BI solutions now include predictive analytical capabilities also. BI is a term used to describe the technology used to access, analyze and report on data relevant to an enterprise. It includes ad-hoc query, reporting, on-line analytical processing (OLAP), dashboards, scorecards, search, visualization, etc. Initially, most BI vendors lacked the ability to build models that can project in the future. However, in the past 3-4 years, the enterprise-class BI vendors have added some of these capabilities to replicate functionality offered by CPM vendors. BI and CPM are complementary solutions, and the BI platform provides a natural-basis to build a CPM solution. BI solutions are usually very complex and expensive for most mid-market companies. However, some of the more focused and template/wizards driven “Express” or “Fast-start” solutions, which are more affordable (especially if they are available in a online or appliance) and can be implemented in a reasonable amount of time – are becoming interesting for the mid-market if the vendors can show measurable benefits and short-term ROI.

In the CPM world, “predictive analytics” is generally used to refer to software solutions that automate and manage process related to corporate performance – financial forecasts, budgets, financial strategies, financial consolidation, scorecarding, and reporting. Another term used to identify CMP is BPM (Business Performance Management but this is sometimes confused with Business Process Management – two very different areas). Some CPM solutions regularly monitor some key performance indicators (KPI) in terms of actual vs. budget and, whenever a significant discrepancy is identified, help perform root causes to identify sources that could be causing this.

The BI and CPM solutions do not need to come from the same solution provider, as the two technologies are complementary and could co-exist. However, there may be economies and synergies related to getting them from the same vendor (if offered). In some instances, mid-market ERP solution vendors are now developing deeper integration to some CPM solutions (like NetSuite with Adaptive Planning).

In the current tough economic conditions, this segment is under tremendous pressures to improve financial processes, measurements and management of the mid-market enterprises. To adress the above, mid-market businesses are increasingly deploying CPM solutions to improve planning (forecasts and budgets), manage costs/optimize profits and more importantly risk and compliance.

The following companies provide enterprise and mid-market CPM solutions:

Increasing interest and deployment of these solutions by mid-market enterprises is demonstrated by the double-digit growth rates most of these mid-market solution companies are experiencing. The CPM applications are targeted at the mid-market company CFOs, C-level executives, finance team and corporate strategy teams.

How were majority of these mid-market companies addressing the financial planning issues until now? Majority of these companies are using Excel spreadsheets. Using Excel, has significant accuracy limitations and  the amount of time spend on the planning process. It also denies the organization a collaborative, connected and productive planning process. Mid-market organizations need to take a more objective view to replace Excel based planning and replace them with CMP solutions. Some basic analysis on time (and accuracy achieved) spent on Excel planning and the results achieved will quickly show the benefits and ROI that can be achieved by CPM solutions – these can be split into the “hard” benefits quantifiable by replacing Excel and the many potential “soft” benefits derived from using a CPM solution.

July 31, 2009

Prognosis on SAP’s Business ByDesign – SaaS based ERP solution for the core mid-market

I came across a good analysis on some aspects of SaaS vs. on-premise vendors and solutions in the smoothspan post Why Do SaaS Companies Lose Money Hand Over Fist?

After reading through the post and various responses, I have some comments that could shed more light on the SaaS vs. on-premise topic and how this relates to SAP’s continued focus on Business ByDesign.

  • The global ERP market opportunity driven by the large number of SMB/mid-market companies. In the U.S. there are 11 times more mid-market companies and on a worldwide basis the number is 13.5X.

     

    # of U.S. Companies

    # of Worldwide companies

    Enterprises (1000+ empl.)

    9,000

    52,000

    Mid-Market (100-1000 empl.)

    100,000

    700,000

    Ratio – Mid-market/Enterprise

    11X

    13.5X

     

     

  • The enterprise market is heavily penetrated by ERP type solutions, mostly on-premise solutions. The U.S. mid-market has less than 42% ERP penetration. This penetration of ERP solutions is much lower outside the U.S. Existing SaaS solution vendors until now have primarily focused on the U.S. market, with less than 15-20% international sales (other than Salesforce.com). SAP being a global company, has the potential of ramping up fast in the international markets which is very under penetrated, where SAP already has established relationships and market presence (significantly more than any of the SaaS vendors). This presents a significant upside revenue opportunity for SAP in the mid-market (especially in the 100-500 employee segment which is outside of the sweet spot of other SAP midmarket solutions – BusinessOne and Business All-in-One).
  • One also needs to look at the Total Cost of Ownership (TCO) of SaaS vs. on-premise solutions. A recent paper investigated details on this, The TCO of Cloud Computing in the SMB and Mid–Market Enterprises; A total cost of ownership comparison of cloud and on–premise business applications. Thee general conclusions are:
    • Considering a 4 year TCO, works in favor of the SaaS ERP solutions when the number of users is less than 400 users. Beyond these numbers of users, the on-premise TCO starts to become better (lower). These would be mostly enterprise companies, who favor on-premise solutions.
    • When considers a TCO beyond 4 years, on-premise solutions are better (lower). Again, these tend to be larger companies.
  • Most of the SaaS vendors like Salesforce.com and NetSuite have a much higher sales and marketing expenses ratio (~ 54% of revenue as shown in the smoothspan post Why Do SaaS Companies Lose Money Hand Over Fist?) primarily driven by their direct sales model. For Business ByDesign, for which SAP is promoting a channel driven model, this percentage should be lower.
  • R&D spending of 16% by SaaS companies – the strategy that needs to be explored by vendors looking to develop SaaS products, they need to seriously consider SaaS platforms like force.com (from Salesforce.com) and QuickBase (from Intuit). The developers that have used these platforms, have significantly reduced both their initial R&D spending and also their product development timeframe, brining SaaS solutions to market in some cases 1-2 years sooner. These SaaS/cloud platforms-as-a-service were not available when SAP embarked on development of ByD (or would they have used one, even if it was available…I am sure they have developed a significant internal expertise with this development experience). It is prudent for SAP to control the roll-out of Business-ByDesign until the product, delivery and channel kinks have been worked out. Prediction – Past experience with German engineering should alert the ERP market that in 2010, SAP will probably deliver a successful mid-market SaaS ERP solution for the core mid-market.

Reviewing the above, including good reviews from the current customers of Business ByDesign, it would be prudent for SAP not to scale back efforts on the roll-out of Business ByDesign – as strategy they have consistently communicating to the market.

July 9, 2009

Business Intelligence (BI) – Does it have a place in the SMB and Mid-Market Enterprises?

The recent demise of LucidEra has brought forward the discussion of the need for BI in the SMB and Mid-Market enterprises (companies with 1-999 employees and revenues usually less than $1 billion). My take is that this was based on the limited BI value LuidEra offered and the current difficult economic conditions vs. their SaaS based business model. With the explosion of BI solution targeted at the SMB & mid-market, the BI industry is inundated with newer solutions and scaled-down versions of existing enterprise solution targeted at this segment. I have also seen several discussions on the potential increase in adoption of BI solution based on these solutions being delivered in a SaaS model to address the IT resources and infrastructure in the SMB and mid-market companies.

Business Intelligence is all about gaining 360 degree insight into a company’s business, and helping company executive make decisions based on the facts as opposed to information in Excel spreadsheets or gut feel. Business intelligence can offer significant benefits to small and mid-sized organizations. The problem becomes sifting through the plethora of solutions to select offerings that meet the SMB’s needs. SMBs don’t have the required resources or time to do this.

The key question that needs to be addressed is – what are the BI related need of the SMB and mid-market companies and weather these needs are being met by these BI solutions? The solution delivery model is secondary to the key question. This segment of companies is realizing that business decisions need to be made on more than excel spreadsheets and gut instinct.

SMBs don’t understand data warehouses and BI, as it is applied to large enterprises as they do not have staff that can make sense out of the reporting provided by these standalone BI tools nor do they have IT resources/budgets to integrate standalone BI applications to data from various business applications and business processes. SMBs understand BI in the form of dashboards and reports with drill down capabilities. They need solutions that can provide quick real-time insights and ROI that can have measurable business results. How can the use information from the past to more accurately predict the future or to look at real-time data to more efficiently utilize the existing resources or inventory; make changes to enhance business process or operational efficiencies?

In my recent interaction with business solution vendors that focus on the SMB and mid-market, BI solutions are now available and embedded as part of a larger business solution – integrated business solution like NetSuite; SAP (based on Business Objects acquisition) – Businessone, Business-by-Design, Business All-in-One; Oracle Business Intelligence Standard Edition; other ERP and CRM solutions (Salesforce.com) .

SMB and mid-market companies need to first investigate the BI capabilities that are already provided by these applications or modules that are already integrated and can be easily add-on to their business application solutions. It does not matter whether these solutions are cloud-based (SaaS), hosted or on-premise; utilizing these exiting BI functionality will provide much easier implementation and ROI compared to bringing in new vendors. Most of the vendors mentioned provide easy to use dashboards with BI analytics capabilities to enhance operational efficiencies, analytical and predictive analysis, risk analysis, forecasting, etc. Business application vendors need to increase their focus on their BI solutions as a key value proposition to the SMB and mid-market.


 

July 7, 2009

The Compelling TCO Case for Cloud-based business applications in SMB and Mid-Market Enterprises

A 4-year total cost of ownership (TCO) perspective comparing cloud and on-premise business application deployment

Small and medium businesses (SMBs) face a tricky dilemma in today’s tough economic climate. It’s no longer business as usual; companies need to figure out how to survive through the current downturn, and get on track to capitalize on new opportunities that will emerge as the economy starts to grow again. They need business solutions to help them to manage more efficiently day-to-day, and also the intelligence they need to move the business forward.

As SMBs weather through turbulent economic storms, total cost of ownership (TCO) is often top of mind when evaluating new business applications. Many customers have become interested in how cloud computing or software-as-a-service (SaaS) can help lower their costs by eliminating upfront capital investments and ongoing maintenance costs associated with on-premise solutions.

Hurwitz & Associates recently completed an in-depth study comparing TCO of cloud-based business application and equivalent on-premise solutions.

Cloud computing essentially eliminates the need for customers to buy, deploy and maintain IT infrastructure or application software individually. Regardless of the application, the cloud computing vendor takes responsibility for all of the infrastructure required to run the solution–servers, backup, software, operating systems, databases, updates, migration, power and cooling, facility space, etc., and associated internal and third-party staffing costs. Because cloud computing vendors manage all of their customers on a single instance of the software, they can amortize costs over thousands of customers. This yields substantial economies of scale and skill, and lowers TCO.

Key findings from our analysis include:

  • Overall TCO for cloud-based integrated solution suite is significantly lower than a comparable on-premise solution. This holds true for both SMB and mid-market firms.
  • IT Infrastructure costs (hardware, software and maintenance) account for about 10% of the total cost of deploying on-premise business applications.
  • The cost advantages of cloud computing slowly taper off as the number of users increases beyond mid-market to larger enterprise companies.
  • Application subscription costs account for two-thirds of the total solution cost in the cloud computing model, where the subscription fee encompasses underlying IT infrastructure and personnel costs required to manage business solution. In comparison, business application costs comprise about 27% of total cost in an on-premise situation.
  • Costs for internal IT staff and/or value-added reseller (VAR), consultant or systems integrator (SI) resources required for application implementation and support represent a significantly higher percentage of total cost for on-premise solutions than for cloud-based business solutions.
  • Pre-integrated front and back office functionality in the integrated business application offering contributes to reducing integration complexity and lowers application implementation costs.

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