Nemertes Impact Analysis: March 18, 2008

Nemertes Impact Analysis

Expert Insight On How Recent News Affects You

Terminal State: Virtualization Renews Drive to Thin Client

Microsoft (NASDAQ:MSFT) acquisition of virtual PC management vendor, Kidaro,
as well as modifications to its licensing terms for Vista, and thin-client
vendor VXL's (BSE:VXLINS) release of a sub-$200 desktop, indicate increasing
enterprise interest in thin-client solutions centered on virtualization.

Nemertes' Building the Successful Virtual Workplace research benchmark
finds that fewer than 20% of branch offices have IT staff local to them,
highlighting one of the key pressures pushing organizations to go thin:
decreased need for on-site desktop support.

Impacts:

Enterprise: Look at operating expenses including management, support and
energy costs, as well as performance, security, and compliance concerns in
evaluating virtual-PC-based thin client options for your next desktop strategy.

Vendors: Thin client makers should follow VXL's lead and show a significant
price difference between acquiring a PC and acquiring a thin device.

Investors: Smaller desktop virtualization/thin client vendors, such as Pano
Logic and SIMtone, will make likely acquisition targets for companies like
Citrix and EMC.

John Burke, Principal Research Analyst

http://www.vxl.net/media/pressrelease23.html
http://www.nemertes.com/networking_telecommunications/nemertes_benchmark_building_a_successful_virtual_workplace

Amentra Puts on a Red Hat: The New JBOSS in Town?

Red Hat (NYSE:RHT) plans to acquire SOA (Service Oriented Architecture)
systems integrator, Amentra, expanding Red Hat's JBOSS integration capabilities.
This move by RedHat highlights a trend of enterprise reliance on systems
integrators for SOA support. In Nemertes' Service Oriented Architectures and
Applications (SOAA) research benchmark, 70% of participants used
professional services in the past 24 months and 87% plan to in the next 24
months.

Impacts:

Enterprises: For organizations considering JBOSS as the basis for their SOA
platform, this acquisition provides a close coupling between developer and
integrator which may add more credence to a Red Hat decision.

Vendors: Larger providers of SOA platforms such as IBM and Oracle already
have armies of consultants performing SOA integration. Redhat's move could be
threatening to other open source ESB vendors, including IONA and Mulesource.

Investors: Redhat acquiring a specialized systems integrator could signal a
trend for consolidation. Likely targets include smaller systems integrators,
such as AppLabs, Alideo and US Tech Solutions.

Ted Ritter, Research Analyst

http://www.washingtonpost.com/wp-dyn/content/article/2008/03/15/AR2008031501326.html
http://www.nemertes.com/benchmarks/nemertes_benchmark_softwareoriented_architectures_and_applications

IBM UC Investments-A Little Competition Never Hurt Anyone

IBM (NYSE: IBM) plans to invest big in its Unified Communications offering.
Last week executives outlined their 3-year vision for competing head to head
with Microsoft (NSDQ:MSFT), announcing they would invest $1 billion dollars.
This strategy includes expanding its portfolio around Lotus Sametime, and also
building its professional-services offering.

Enterprises understand the value of UC. Seventy-nine percent of IT executives
who participated in Nemertes' benchmark, Building the Successful Virtual
Workplace, either were using or planned to deploy unified communications in
the next two years.

Impacts:

Enterprises: A welcomed announcement for businesses that have already
invested in IBM software, and now a choice for those who looked at MS as the
only strong UC integration option.

Vendors: Plan to spend money to compete! Your UC portfolio must expand to
integrate with multiple devices and platforms if you're going to keep up with
enterprise demands.

Investors: Look for IPT vendors that support both IBM Sametime and MS
Communication server. Examples include: Shortel (NSDQ: SHOR) and Nortel (NYSE:
NT)

Katherine Trost, Research Analyst

Nemertes is currently working on a Unified Communication and Collaboration
project. Please see the following link for additional information:

http://www.nemertes.com/ongoing_research/unified_communications_and_collaboration?#
http://www.crn.com/networking/206902799

BMC to buy BladeLogic; Highlights Management, Automation Centrality in New Data
Center

Management heavyweight BMC (NYSE:BMC) intends to buy BladeLogic (NASDAQ:
BLOG) for $28/share (about $800M). BladeLogic's operations automation software,
centered on configuration and change management, extends BMC's
service-management vision for a new IT into the heart of the new data center:
automated provisioning coupled to virtualization and other dense-computing
strategies.

In Nemertes' research benchmark, The New Data Center, we found the
highest efficiencies in data center management, ratios above 50 servers per
administrator, require use of automated provisioning systems such as
BladeLogic's.

Impacts:

Enterprises: IT, under increasing pressure to come to terms with management
automation, should actively pursue options for integrating automation with
management tools.

Vendors: Smoothly integrating sophisticated automation tools into monitoring
and management suites will become increasing important as the pressure to
automate in the data center increases; ramp up your development efforts, look
for partners, or start shopping.

Investors: Smaller provisioning/automation companies with hot products, such
as FastScale and Cassatt, will become attractive targets for acquisition.

John Burke, Principal Research Analyst

http://www.bmc.com/BMC/News/CDA/hou_PressRelease_detail/0,3519,8573740_8630060_105771178,00.html
http://www.nemertes.com/platform/tooling_up_for_the_new_data_center

EMC + Infra = ITSM?

EMC (NYSE:EMC) intends to acquire IT-service management (ITSM) provider,
Infra. Organizations are scrambling to better manage their infrastructures and
many are looking to ITIL (IT Infrastructure Library) and its framework for ITSM.
EMC's acquisition follows a trend highlighted in Nemertes' Security and
Information Protection benchmark, in which improving performance,
availability, management and the implementation of IT services management are
the top priority for 62.2% of IT-executive participants.

Impacts:

Enterprises: If EMC successfully integrates Infra's solutions into the EMC
product portfolio, enterprises should be better able to manage EMC
virtualization and provisioning in the data center.

Vendors: Integration of Infra could make EMC more competitive. However, Infra
is a niche player and therefore, ITSM heavyweights such as IBM, HP and CA should
take notice, but not be worried.

Investors: EMC is pushing hard to expand from being seen as a storage vendor
with specialties such as RSA and VMWare to an IT Infrastructure player. Infra
follows acquisitions of Pi and the attempted acquisition of Iomega (NYSE:IOM).
Look for additional acquisitions by EMC in the services-management area.

Ted Ritter, Research Analyst

http://www.nemertes.com/products_services/research/benchmarks/nemertes_benchmark_security_and_information_protection
http://www.informationweek.com/story/showArticle.jhtml?articleID=206902871&cid=RSSfeed_IWK_All

Converging Wireless

Privately held companies OnRelay and Agito Networks both made announcements
last week that lend credence to the notion that the enterprise wireless and
carrier wireless domains are converging. OnRelay announced that it will soon be
offering a hosted MBX (Mobile Business Exchange) solution that will allow
businesses to offer complete business PBX capabilities to wireless phones
running on carrier networks. Agito announced that it has won the Innovation
award from VON Magazine for its development of an intelligent gateway that
allows dual mode phones to roam between campus and carrier networks.

As Nemertes' latest research benchmark, Advanced Communications
Services, illustrates, wireless domains are converging into a
next-generation wireless architecture that will ultimately blur the distinction
between enterprise wireless and carrier mobile wireless. Although, fixed mobile
convergence (FMC) promises some of the same capabilities delivered by carriers,
Agito and OnRelay prove that if the carriers continue to ponder potential FMC
service offerings, enterprises will move to fill the void armed with their own
technologies.

Impacts:

Enterprises: It is clear that vendors are moving to provide solutions that
allow the enterprises to leverage their wireless infrastructure investments to
achieve mobile convergence capabilities. Such solutions will allow enterprises
to save money on wireless roaming while extending the corporate voice/data
network to mobile employees.

Carriers: The implication is clear: either deliver solutions that the
enterprises want, or they will build their own.

Investors: Wireless integration technology has yet to really find itself in
the market. If this sort of technology catches on, there are many start ups that
will benefit. This is a market to watch.

Mike Jude, Senior Analyst

http://www.agitonetworks.com
http://www.onrelay.com/index.php?id=11
http://www.nemertes.com/market_analysis/nemertes_market_analysis_mobilitywireless?#

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