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Tivoli Systems Inc. was acquired by IBM in March 1996 for $743 million. At the time, Tivoli had 300 people, and the SystemView group of IBM had over 1,000. Dr. Franklin Moss took over as President and CEO. Tivoli is managed as an independent IBM company today, focused on the applications management market. On the one-year anniversary of the merger, Moss recently spoke with ADT Editor John Desmond.

How does Tivoli define application management?

Application management is the process of managing a company's entire computing environment from the perspective of their business applications. It begins with making all business applications management-ready, so that when the time comes to put them into production, the process is easy and quick.

The first step is to empower the application team to easily create the links to the Tivoli Management Environment [TME10] that are required to manage those applications. Today, there is a significant gap that exists between application developers and systems managers in organizations. We aim to close that gap down.

Is your TME10 a standard?

We believe it is a de facto standard. It also has been developed on all industry standards that are appropriate. It also has become the center of a movement in the management industry to achieve the definition of a standard framework. There are literally dozens of management vendors ranging from Compuware and Platinum Technologies to Boole & Babbage, Remedy Corp., Legato, who integrate with it.

Is there any equivalent to the OMG in this world, a neutral, third-party organization driving the standard?

Tivoli is driving TME10. We've made all our critical application interfaces, however, open and available through industry organizations such as the Desktop Management Task Force, to make sure all our interfaces for managing desktops are consistent with the standards they are creating.

"Off-the-shelf and in-house applications are being deployed
at an enormous rate in 1996."
Frank Moss

In addition, we have created a concept called the Management Working Group under an organization called 10/Plus, in which our partners are taking the lead in developing APIs for interfacing with the TME10.

Their interfaces are forming a de facto industry standard for interfacing with network and systems management products.

Are any of the development tool suppliers involved or committed yet?

Yes. The first one is Powersoft, which has worked with Tivoli to develop a capability called Tivoli Manager for PowerBuilder Applications. That is a set of tools that, beginning in February, will be available through the PowerBuilder channel. It will enable PowerBuilder developers to make their applications Tivoli management-ready. That's just the tip of the iceberg. We'll be working with the Visual Age folks of IBM and we are working with Forté, Oracle, Informix and a list of others, totaling eight or nine, in the two- and three-tier A/D tool community.

The work we've done in that area is encapsulated in an interface called the Application Management Specification (AMS), the interface between applications and TME. This forms the basis for our work with all these application development tool vendors, as well as off-the-shelf client/server application package suppliers.

For example, we supply a module for SAP R/3 that automatically makes SAP R/3 implementations manageable by TME. That product has been shipping and is being used by a number of customers.

Is there any cooperation between Tivoli and Microsoft?

We've worked in the past on integrating Microsoft's SMS package with TME, and producing a gateway between the two products. We're also interested in the Microsoft tools, Visual Basic and future tools as we look out toward the Internet, and how those can be AMS-enabled. We're currently in conversations with Microsoft about how that might best be done. That's the most I can say about that right now.

Is there any cooperation with Computer Associates?

Not to speak of.

Why not?

We don't think they have anything to offer us.

You don't?

No. Certainly since the merger [of Tivoli and IBM Systemview products], the need has been dramatically reduced. One of the purposes of merging with IBM was to put into our bag of tricks, mainframe management software. We currently share the number one market share position with CA in the mainframe management marketplace.

It's no secret that we compete head-on with CA. We'd be happy to talk with them about integrating with some of their A/D tools and off-the-shelf applications when they come around to the conclusion that TME is the de facto systems and network management solution. I suppose that's down the road a little bit.

As far as integrating with Unicenter, Unicenter is closed. It doesn't really offer us the kind of hooks and open APIs, which are public, that we feel are the kind we want to work with. We generally try to work with vendors who are happy to put their interfaces into the public domain.

How is your business doing?

Our business is exploding right now. We've had a terrific quarter and year. We are not only being very successful in North America, previously the focus of Tivoli, but most recently have been very successful in Europe, and in Latin America and the Far East. In the distributed business alone [TME10 products], not the mainframe business, the order and sales level in December 1996 was approximately two times the size of Tivoli's revenue in 1995. So in one month in 1996, we doubled our entire year's revenue for distributed products. The rate of growth and size of that market is tremendous right now.

Why?

First, the market for systems and network management in the heterogeneous world is unlimited today. It's being driven by adoption of off-the-shelf client/server applications like SAP R/3, PeopleSoft, Lotus Notes, and new two- and three-tier A/D tools like PowerBuilder, Forté and Dynasty. Off-the-shelf and in-house applications are being deployed at an enormous rate in 1996. So the market is there.

Secondly, our success is attributable to a dramatic scaleup in the resources that we have to bring TME10 to the marketplace. At the end of 1995, we had approximately 80 Tivoli salespeople. At the end of 1996, as a result of the merger, we had 350 people. At that same time, at the beginning of 1996, we had approximately 50 people available to work in a post-sales capacity with customers. We now have 500 people doing that and that number is growing.

Can you comment on trends in the user community of TME users?

Our buyers fall into two categories, roughly speaking. One is an infrastructure group, generally under I/S, in the process of trying to retool the networks, the computing platforms and the management software to accommodate the explosion of client/server and Internet applications.

The other target customers for us are in business units in the process of rolling out specific applications and who need management solutions to do that. These are two very different groups of buyers, but their goals are largely the same. They are trying to reduce the total cost of ownership and are begin driven by systems and network management. They need to get that cost down because it is exploding the cost of ownership. They are also trying to get applications out of the labs and into production.

So how has the merger with IBM gone for you over the past year?

It was an amazing and a bold concept for the small company to swallow the large one, but we were able to accomplish that because the management of IBM more than stood behind their word, and the folks in the pre-existing Tivoli and SystemView group we merged with are the best people in this industry.

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