We recently had a 451 Group article published on us and it was, on the whole, a positive and fair summary of our capabilities.  My only comments revolve around the time elapsed between the actual interview (May) and the publishing date.  Our ADS has more than tripled from what was mentioned in the report and we have been addressing some of our weaknesses with the imminent release of up.time MDC (multi-datacenter) and the hiring of a veteran product marketing wunderkind, Saeed Khan (most recently from PlateSpin, er, Novell).

Impact Report
Uptime Software gaining system management traction across market segments

Analyst: Dennis Callaghan
Sector: Enterprise Software »»
Date: 13 Nov 2008

It may not be a household name in the IT management space, but Toronto-based Uptime Software has quietly built up a customer base of more than 500 across verticals, geographies and market segments. It will be a formidable challenger in the midmarket system management space going forward even as it needs to raise its profile and formalize relationships with complementary vendors. But in today’s challenging economy and with IT budgets constrained, lower-cost but full-featured offerings like Uptime’s will have a chance to shine.

The 451 Take
Uptime clearly has proved the market for its software, developing a significant niche in IT management without taking on the Big Four directly. We still think the company needs to increase its average deal size, raise its profile and expand its channel activities to have more formal partnerships with complimentary vendors. It will eventually need to add business service management (BSM), but with strong dashboard tooling, it’s already well on its way. Competition remains intense, but in today’s challenging economic climate, the opportunities will be there for Uptime.
Context
Uptime Software began life as a software company in 2000 after its founders had run a small systems management consultancy three years earlier. That consulting group specialized in system performance assessments, server consolidation and capacity planning studies – chiefly for Sun Microsystems server environments – for the telecommunications and financial services markets.

Consulting was phased out in favor of the software model over 2000-2001, and the new company signed up Group Telecom, Scotiabank and Vodafone as its initial customers. Then, as now, Uptime sought to fill the gap between the Big Four IT management framework vendors and low-end point management tools. Alex Bewley, who, like several Uptime executives, is a former Sun Microsystems employee, led the founding team and remains with Uptime today as chief technology officer. Sean O’Neil, a 20-year veteran of the Canadian IT industry, runs most of the company’s day-to-day activities as chief operating officer. Uptime has about 50 employees, with nearly 15 in research and development, and is based in Toronto. It claims 60% revenue growth over the last two years. Uptime has never taken any outside funding.

Products
Uptime develops a system management suite known as up.time, a monitoring and management software framework designed to provide a ‘single pane of glass’ view of cross-platform IT infrastructure, including application and Web servers, virtual servers, network infrastructure, databases, e-mail and business applications, and network storage devices.

Up.time also includes tooling that supports capacity planning and reporting, service-level agreement management, alerting and thresholding, plus extensive role-based dashboards – for IT users, IT managers and system administrators – with drill-down capabilities for problem analysis. Pricing for up.time is $695 per server with volume discounts available as well as datacenter and global licensing plans.

Customers
Uptime has more than 600 client installations at over 500 customer organizations in 32 countries. The company targets multiple customer segments, from SMBs up to the Fortune 1000. Uptime’s customers are monitoring anywhere from 100-5,000 servers, with an average in the 100-150 range, although by the company’s own admission, 90% of its customers have not moved to true business service management yet – the linking of IT service levels to the business services they support. Uptime really doesn’t support this type of technology yet either.

Average deal size is about $13,000 in North America, although the company is hoping to nearly triple that by the end of the year as it has deals in the pipeline worth up to $1m. About 60% of Uptime’s business comes from North America, with 20% from Asia-Pacific. The company claims a substantial customer base in the United Kingdom, Northern Europe, Australia and New Zealand and says it owns the telecommunications market in Cameroon.

Uptime came out of the Sun server monitoring world, and about 85% of its customers today have Sun servers in their environments. However, 100% of customers are using up.time to monitor and manage Microsoft Windows servers, and 54% have IBM servers. Less than 5% of the customer base is using up.time to monitor virtualized environments, but the company sees 75% of net new orders with virtualization management licenses.

Financial services and insurance, public sector, telecommunications and technology are the chief vertical markets Uptime sells into, although it has significant customer penetration into many other verticals, including healthcare and pharmaceuticals, manufacturing, education, media and entertainment, retail and distribution, energy, transportation, and consulting and service providers.

Notable customers include AMP Financial Services, Bank of Montreal, Century Bank, Commerce Bank, Deutsche Bank, AT&T Labs, Bell Canada West, Cable & Wireless, Cingular Wireless, T-Mobile, Baystate Health, Boston Scientific, Guidant, NASA Goddard Flight Space Center, Arrow Electronics, Frito-Lay, L’Oréal Group and many others.

Partners
There are three aspects to Uptime’s partnering activities. The company looks to fill gaps in incumbent vendors’ offerings, particularly for virtual infrastructure monitoring, capacity modeling and enterprise monitoring, although it’s not clear yet that it has formed any such partnerships. It seeks alliances with point-tool vendors and currently has them with Tevron (application performance monitoring and testing), HyPerformix (capacity management) and Splunk Inc (IT troubleshooting, log management and other applications). It partners with the vendors of the infrastructure products it supports, including Microsoft, IBM, Sun, Hewlett-Packard, Oracle, Red Hat, VMware, Citrix, BEA Systems and Novell.

Competition
Uptime describes itself as a ‘microframework’ vendor and mostly competes on midmarket deals. It sees its chief competition on such deals as Nimsoft and eG Innovations. Both those companies are also well-positioned for virtualization management, but Nimsoft added the BSM piece when it bought Indicative Software.

Uptime acknowledges some competition with the Big Four enterprise framework vendors – IBM, HP, CA Inc and BMC Software – as well as Microsoft, but says it is trying to work with those vendors to fill gaps in their portfolios, particularly around virtualization management. ‘Mid tier’ IT management vendors like NetIQ, Compuware, Quest Software and Managed Objects, which is being acquired by Novell, are Uptime’s next tier of competitors, mostly for technology replacement since Uptime can undercut these vendors on total cost of ownership.

Point vendors like Akorri, HyPerformix, TeaLeaf Technology, Argent, Altiris, Oblicore, Coradiant, Opnet, Novell’s PlateSpin and Splunk can be competitors, but they are just as likely to be partners that can integrate their offerings with Uptime’s.

Uptime positions itself as a replacement for lower-end performance monitors like SolarWinds and Cittio’s WatchTower and open source tools like GroundWork Open Source, Hyperic, Nagios Enterprises and Big Brother, believing that customers will eventually outgrow those offerings and be ready to move up to its software. Another likely competitor we see for Uptime is ScienceLogic with its all-in-one EM7 IT management appliance, which is especially strong in performance monitoring for the midmarket.

SWOT analysis
Strengths 
Uptime has an impressive customer roster across verticals, customer segments and geographies. The growth and expansion the company has enjoyed without ever raising venture capital is impressive.

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