Executive summery

The service desk market generated more than $1.3 billion in 2008 and is expected to grow at about 10%.This market segment has experienced very little innovation in the past few years. The goals of service desk customers are primarily to improve customer satisfaction and reduce service desk staffing costs. Both of these goals are reached through implementation of process improvements or entirely new processes that streamline the work for the service desk team. Additionally, pressure to justify costs drives the need for financial measures and data to prove the value of the service desk to the organization. The market is filled with vendors that have all developed tools that look very similar. The fundamental processes of incident and problem management are comparable across these solutions, but ease of use and implementation time offer some differentiation.

Segmenting the ITSM Support tool market

The ITSM support tool market is quite mature, and vendors have had ample time to refine their offerings. There are some vendors that have either modified their go-to-market models or adopted pieces of new technology into the suite since Forresters evaluation of the service desk space in April 2008. Each technology decision should be oriented toward at least one of the five key goals of IT which are as follows: Business Integration Reduce OPEX Refine Processes Improve customer satisfaction Innovate and protect investment For those trying to keep this all straight, the good news is that the market is filled with vendors that have solid offerings to support the dynamic modern service desk function. Service desk managers who have decided to replace the existing toolset or who are replacing in-house developed solutions with commercial products have to justify their selection

Incumbent mega vendors: BMC, CA, HP, and IBM.

The ITSM support tool incumbents are the big IT management vendors. They have been in the ITSM business for years and have strong offerings for the modern service desk. While some are more complex to implement than others, their functionalities are fairly equal. There are differences in how these vendors price, package, and license their service desk solutions. From a pricing perspective, the options range from module-based pricing, where each module adds additional functionality, to a per user-based price. The packaging can be difficult to understand as well. The vendors in this section typically package their solution into a suite most of the time labeled ITSM which is comprised of multiple modules including incident, change, knowledge, service-level management, and selfservice request management functionalities. All of the incumbent vendors offer an on-demand version of their solution. These on-demand solutions are gaining popularity, and Forrester Research expects a sharp

increase in the on-demand market for the service desk space.5 Their SaaS implementations vary; interested customers should evaluate these different options by leveraging a SaaS maturity model to differentiate among the offers.

1.

Emerging leaders:

Avocent/LANDesk Software, Axios, Cherwell Software, EMC, FrontRange, helpLine, and Numara.
Seven vendors are closing in on the megavendors. They are These service desk management vendors have less visibility, less market share, and in some cases limited geographic coverage, but their scalability and functionality reach that of the megavendors. These vendors focus on the IT service desk customer and creating solutions that can be implemented relatively quickly. The solutions of these vendors have solid product functionality and features at a very competitive price.

2.

Great opportunities:

iET Solutions, ManageEngine, and Symantec.

These vendors offer great alternatives mostly for smaller enterprise customers. Some of these vendors are limited by geographic presence, sales and marketing execution challenges compared with the other players, and limited R&D budgets.

3.

Unique offerings:

InteQ and Service-now.com

These vendors have realized the trend of providing service desk offerings as a service and have introduced very comprehensive offers with extensive functionality and attractive prices. Both vendors offer their solution in a SaaS way which reduces maintenance, support, and other tasks in the service desk solution.

Service-now.com was the first vendor to introduce service desk in a SaaS model.

ITIL tool market share and its current business

BMC is #1 in the market with 38.6% market share (Includes BMC Remedy ITSM and Custom applications, Service Desk Express, Remedy Force and BMC Remedy on Demand), HP Service Manager is #2 at a little over 20%, CA Service Desk Manager is #3 at 7.2% (Source is Gartner MQ 2011 on this market share information), IBM Tivoli Service Request Manager is at 4% and ServiceNow (first major ITSM Software as a Service-only offering SaaS) is at 3%, but growing the most quickly.

In terms of ranking, we would rank the vendors using these criteria:

Interface Architecture Functionality Price (list pricing, because any vendor offers special discounts based on a wide range of criteria).

Product \ Parameter BMC Remedy ITSM 7.6.4 HP Service Manager 9.2 CA Service Desk Manager 12.5 BMC Service Desk Express 10.1 Service-Now 11.5

Functionality

Architectur e

Pricing

Interface

Sales Team

Implementation Community

2 1 3 5 4

1 4 5 3 2

4 5 2 1 3

2 4 5 3 1

4 2 3 4 1

1 2 5 4 3

SWOT analysis:
Strength Weakness Web focused Market leader in SaaS offering solution (IT 3.0) Comprehensive offers Extensive functionality Attractive prices Easy Up-gradation to later releases Multiple module readily integrated to one another Strong hold with MidMarket customers Service-now is a small start-up which is largely unproven with only 145 customers, and many of the initial customers started under the initial friends and family program, getting their solution free if they agreed to test drive the application. SaaS model has its own limitations low security, unproven scalability and reliability. Data security and privacy

Opportunity Cloud computing market Social media trend Extend market opportunities for small enterprise 3rd Party Integration

Threat Open Source threats Authentication and information leakage Security Third party integration policy A SaaS offering like Service-now might appear to be a cost-effective option in the short run, but in the long term, an on-premise solution like HEAT and FrontRange ITSM proves to be the most economical when considering the overall TCO.

Key differentiators as indicated by the company

Service-now.com is an On Demand IT Service Management solution licensed by subscription. Combining ITIL version 3 recommendations with Web 2.0 technology, company offer a solution that is thoroughly modern in its delivery, price, and value, approachable and attractive, integrated and complete, youve never seen IT management done like this before.

Conventional IT service management software is notoriously difficult and costly to deploy. Servicenow's SaaS approach claims to cut that time and cost by as much as 50%. Founder Luddy also cites

the company's organic product development as a key differentiator to vendor suites made up of components bolted together through acquisition. Organic product design and a commitment to customer service set Service-now.com apart from legacy vendors. Service-now.com was designed as a SaaS application from the very beginning, which lets it do things that legacy applications cant. Its design makes it easy to run in any Web browser even on new platforms like the iPhone, Google Android and the iPad and include multi-touch support for these devices too. The latest release of Service-nows software offers mobile access from a Blackberry or an iPhone or any Windows Mobile device. Since its delivered over the Internet as a service, Servicenow.com shoulders the burden of application care and feeding, allowing customers to focus on delivering good service to the business. Customers receive access to software updates automatically with the ability to preserve customizations they have made along the way. The company relies on feedback from its customer base to grow. Service-now.com product updates are issued three times a year and often feature new capabilities and applications were created with the customer at our side. An in-depth community site and product wiki keep customers engaged with us and their peers. Since Service-now.com is a service provider that happens to provide an IT management application, customer satisfaction is crucial.

Pricing:

Service-now.com develops and maintains the code, and customers can either connect to the vendor via a VPN or download the code to their networks. Pricing ranges between $50 and $90 per seat per month, depending on modules and people using the software.

Future Technology incorporated and implementation approach

ServiceNow is widening its portfolio beyond ticket tracking in IT. The company is moving into more speculative lines of business such as platform as a service (PaaS): opening up its platform to build request-driven workflows (chains of work that involved several people, a defined process and approvals along the way). Like Remedy before it, ServiceNow's core system is a big workflow engine--both outfits have productized around managing tickets and requests. ERP for IT essentially means running IT like a business. It is probably clich but this new economy demands a transformation in which the IT organization knows how much its services cost or can accurately visualize project status and plan resources accordingly. Getting more granular, ERP for IT means creating and publishing a comprehensive portfolio and actionable catalog of services provided by IT. This portfolio approach considers labor costs, materials,

and real-estate values, while also evaluating long-term costs for network bandwidth, maintenance & licensing, help desk calls, trouble tickets, etc. It is within this context that Service-now.com sees its software as becoming ERP for IT. We believe that an IT department regardless of size or complexity requires a single system of record for all processes being used to provision, upgrade, repair, support, and manage the business services and the underlying infrastructure upon which an organization depends. This single system of record is our vision for providing clear visibility into what is being done in IT, for which parts of the business, with what priority, as well as the risks associated with that work. It will be sufficiently comprehensive for the most technical manager to understand the impact of pending changes being made in seemingly unrelated areas, yet simple enough to use that a non-IT employee finds value in it for reporting issues, ordering new services, getting news, and knowledge about the business.