Battlecard - Microsoft System Center vs IBM v11

Microsoft Server Virtualization and Management versus IBM management stack Competitive Discussion Guide- May 2014 Introduction

market strategy: where to sell their products, what they need to acquire to complement their portfolios, and what they need to shed or put on the back burner.

This discussion guide provides guidance for Microsoft ® field sales representatives to discuss customer concerns about server and cloud environment management and how solutions from Microsoft can help address those concerns. This document provides information and facts to help field sales representatives compete effectively against IBM Data Center and Cloud Management solutions. Use this guide to: ▪ Initiate sales conversations with technical decision makers (TDMs) and business decision makers (BDMs) to identify sales opportunities. ▪ Understand key messages and strategies for positioning Microsoft Hyper-V™ and Microsoft System Center. ▪ Sell Microsoft System Center against IBM Cloud Management Solutions. Use this discussion guide in conversations with: ▪ TDMs: Information Technology (IT) Administrators, IT Managers (IT Implementers), VP of IT, Director of Technology, Director of IT, and Chief Architect ▪ BDMs: President, CEO, Chairman, and COO

1 | IT Operations Management Market Land Escape Historically, the ITOM landscape has been dominated by four vendors: BMC Software, CA Technologies, HP, and IBM. Gartner refers to these vendors as the Big Four. These vendors continue to expand their portfolios through acquisitions and some organic investments. However, software infrastructure vendors like Microsoft and VMware are also broadening their portfolios to include management solutions that provide deep-stack management. This shift in the management vendor landscape brings new challenges to IT organizations to assess the breadth and depth of management solutions or suites to determine when and where best-ofbreed, good-enough and portfolio integration are trade-offs worth making.

2 | The ITOM Big Four at a Glance Strength

Their rich portfolio allows them to successfully compete in tactical sales with point solutions and in strategic sales as IT preferred partners. Their typical operating mode is not to innovate directly but to determine the next direction in which to take the market — and to acquire either the innovators that are spearheading the trends or the specialists that will help them increase their customer base. The mega vendors have the money and the market presence to push current and nextgeneration products. Consequently, they must base their strategies on the management of their product portfolios and on the effective diffusion of their 2014 © Microsoft Corporation | Confidential | For Microsoft Internal Use Only

Microsoft Server

Weakness

Opportunity

Threats

BMC’s IT management The potential to strategy is addressing execute on the the consumerization strategy is and the impaired by the industrialization of IT; current portfolio’s it is addressing new acquired solutions and old challenges and which are now is working on showing their age simplifying the needed and which are solution. portfolios to difficult to discard aid IT organizations in given BMC their transformation to installed base. the next stage of maturity.

BMC has a golden IBM’s core strategy The strategy IBM’s IT management opportunity to focuses on new pushes new strategy focuses on reinvent itself disruptive technology solutions toward new trends and the innovative company, management (cloud, systems of transformation of IT in line with the mobile, etc.) while engagement while into BT. This will successful optimizing the acknowledging the certainly agree with introduction management of legacy role of systems of the top IT and Remedy. systems of record. record. However, organizations. The company the transition from shift to the model one focus to the other requires a allowing innovation to strategy that happen via acquiring abstracts the innovative and complexity of people rather legacy systems. code, and give This is not really the means to explicit in IBM’s innovative solutions strategy.

CA owns a solid CA has difficulty portfolio based on encapsulating a strategic acquisitions good and solid and an ability to portfolio into a capitalize on them. clear strategic Its solutions are marketing innovative depending message. on product and portfolio; its strength lies with the combination of products and their integration across the IT management portfolio. The current strength o f The portfolio as a HP’s IT management whole appears a portfolio is the bit dusty and is application not really performance supported by a management solution. strong marketing vision. Reminiscing about past strategies such as BAC and others does not help.

CA has a clear opportunity to accompany customers evolving from traditional IT over the years using its multiple 3 | IBM Cloud & Smarter capabilities, Nimsoft to large Infrastructure: Preparing enterprise solutions. New ITOM Market

for the

Strategy

IBM recognizes the technology disruption brought forth by cloud, mobility, and smart infrastructure. IBM’s Now that HP strategy for the next three to four years is to focus on three main areas regarding the new ITOM cycle has overcome challenge: acquisition difficulties, 1) Open standards as a means of enabling agility we expect it within and across organizations. recover and innovating again. 2) Advanced analytics as a new source of actionable insights into how best to serve people. Cross-divisional 3) Design as a competitive differentiator and key cooperation factor in improving productivity and engagement. capitalization IBM’s strategy is to focus on these three key areas hardware base across the portfolio. help. This is applied to three market trends: 1) Abstraction of infrastructure 2) Understanding workloads and services 3) Understanding and resolving what happens within systems. Geographic ReachIBM's international business has become increasingly important to the bottom line. With clients in about 170 countries, overseas sales account for more than half of total revenues. The company's businesses in developing markets in Brazil, China, India, and Russia have been particularly active. It will open 10 offices in Russia, Kazakhstan, Ukraine, and Uzbekistan in 2012, doubling its number of branches in the region. Late in 2012, the company opened offices in Malaysia and Indonesia as Southeast Asia sees tremendous growth. IBM continues to seek opportunities outside the 2014 © Microsoft Corporation | Confidential | For Microsoft Internal Use Only

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mature markets of North America, Europe, and Japan. IBM tries to bridge the old world with the new. The disruption of technology will bring a lighter way to engage with IT systems and services. Yet the “old world” of systems of record is the foundation from which new services are built. Taking a client’s view, IBM sees the need to help customers cross the systems of recordsystems of engagement divide and abstract the complexity of making the transition between old and new. IBM believes in open standards. Diversity is a fact of life in IT management solutions. Many clients have opted for solutions coming from different vendors. IBM believes that open standards are the key to eradicating the integration problems that have plagued ITMS products for years. While it has its own hardware layer to support, its software is agnostic and built on an open foundation. IBM believes in analytics. IBM’s perspective comes from being able to analyze workloads and understand their features, dependencies, and patterns of usage and propagation. It sees workloads as the major client challenge in terms of deployment, monitoring, and understanding. IBM solutions are therefore “workload aware” to fit different situations and implementations. IBM’s IT management solutions’ alignment is based on smart choices. The integration of solutions that manage, operate, and maintain systems of record and systems of engagement is the biggest challenge of infrastructure and operations teams. IBM has made significant organizational and portfolio adjustments to integrate and orchestrate existing and newly acquired IT management solutions. Its internal drive to simplification and integration has made a big difference in clients’ adoption of IBM’s IT management portfolio

8)

IBM claims that cloud revenue for 2013 increased 80% YoY.

4 | Competing with IBM Management Platform and Offering IBM recently revamped their cloud management platform strategy and offerings. IBM had been selling three different solutions - Service Delivery Manager, Tivoli Service Automation Manager, and Smart Cloud Provisioning which are marketed under the SmartCloud brand (under the larger “Smart Planet” umbrella marketing theme). They now sell only one solution: Smart Cloud Orchestrator (SCO). SCO will be based on OpenStack architecture. Customers who purchased IBM’s previous offerings have no upgrade path according to Gartner.

A | IBM’s Confusing Cloud Automation Platform Solutions

IBM: About

IBM is the largest ITOM software vendor with $100B large hardware and software services. 1) Tivoli Management software approximates $3.5B or 14% of total software revenue. 2) IBM leads two distributed ITOM submarkets: Performance and Availability Management, and Network Management. 3) Server hardware business is on steep decline. IBM is also considering selling its low-end server business. 4) IBM is struggling in China and European markets with decreasing revenues. 5) YoY total revenue decline of 2%: Q4 declined by 5.4% Q1 $1 billion workforce rebalancing charge (i.e. layoffs) 6) Software = 25% of revenue and 45% of profits. Software consistently growing in importance. 7) IBM is focused on four key growth initiatives: Smarter Planet, Growth Markets, Business Analytics, and Cloud Computing.

B | Typical Architecture of SCO – Resource Intensive ▪

Requires minimum 5 VMs, Central Servers 1 -4, plus the Region Server. Central Server 5 is needed if you need HA, and System Automation App Manager must be deployed.

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Separate Region Server needed for each hypervisor that will be managed by SCO (i.e. endpoint). OpenStack is deployed as part of the SCO installation. It is required to support user authentication.

C | IBM’s Messaging for Smart Cloud Orchestrator

E | Issues with IBM’s SmartCloud Orchestrator

D | IBM’s SmartCloud Orchestrator Packaging F | Another Point of Competitive Differentiation with System Center

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G | Winning Purchasing Criteria

I | Win Against IBM

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Sell higher in the organization and engage with the LOB managers if appropriate. ▪ Understand IBM’s motivation and sales tactics. H | Winning with IBM Global ▪ Point out the complexity of IBM’s solutions and Services (IGS) future maintenance costs—push Microsoft’s superior time to value. ▪ Highlight IBM’s confusing, multiple cloud platform offerings. ▪ Sell Hyper-v leading virtualization platform and the deep integration with System Center cloud management platform including the broad set of management capabilities. ▪ IBM commitment to OpenStack is not mature. IBM public cloud SoftLayer is not built using OpenStack. ▪ IBM is facing multiple challenges in the CMP market. The company has to address criticism from existing TSAM (Tivoli Service Automation 2014 © Microsoft Corporation | Confidential | For Microsoft Internal Use Only

Manager) and ISDM (IBM Service Delivery ▪ Despite the promise of PureApplication, IBM's Manager) customers, who are lamenting the lack marketing around integrated stack systems has of a fully featured orchestration engine to simplify not yet overcome the strength of Oracle's the development and maintenance of automation engineered system market momentum. workflows (a capability also missing in SmartCloud ▪ Vendors such as Dell, Huawei, HP, and Supermicro Provisioning); on the other hand, IBM has to have more visible traction in the market for x86demonstrate that the SmartCloud offering is more based big data solutions. As IBM ramps up its than a rebranding exercise. Old and new PureData solution, this will potentially enable the customers are confused about the transition and company to redress the balance. further wonder how the commitment to J | Win Against IBM Public Cloud (In OpenStack will fit the strategy. ▪ Private cloud engagements, particularly with brief as not focus for this study) enterprises rather than service providers, IBM ▪ IBM is a large diversified technology company would appear to have an edge. Professional with a range of cloud-related products and services are the company's bread and butter. Plus, services. IBM's only true cloud offering is IBM claims that it had 5,000 private cloud SmartCloud Enterprise (SCE), although it also has customers as of last year. We have a feeling that a cloud-enabled infrastructure service called IBM claim may rest on a rather loose definition of the SmartCloud Enterprise+, as well as PaaS services. private cloud, but no doubt some major portion of ▪ Although IBM has improved the speed of its those customers may be running SmartCloud development cycle for SCE, its feature set still software of some kind, which will soon be lags significantly behind those of its competitors. upgraded to include the OpenStack bits. Enterprises are likely to be especially concerned ▪ IBM's plan to make the latest, unvarnished by the weaknesses in security capabilities and the OpenStack bits core to all its cloud offerings is inability to meet regulatory compliance only one approach. Piston Cloud, Rackspace, Red requirements. Hat, and others will continue to deliver packaged ▪ IBM's SLA is weak and it excludes maintenance; OpenStack versions -- and soon the first IBM typically has more maintenance-related OpenStack appliance will arrive from Nebula, downtime than its competitors. It also has a more whose CEO, Chris Kemp was CTO of NASA when complicated sign-up and contracting process than the agency began developing the Compute most of its public cloud competitors. portion of OpenStack. ▪ While IBM has a stated commitment to ▪ Moreover, IBM does not have an OpenStack public OpenStack, SCE is not currently based on cloud yet, while HP and Rackspace do. Somehow, OpenStack. Moreover, on 8 July 2013, IBM it is difficult to imagine IBM going into the acquired SoftLayer, which has its own proprietary commodity public cloud business. To use the cloud IaaS platform. This creates uncertainty current IBM public cloud, we need to contact IBM about the future direction of IBM's cloud and wait for someone to get back to us. It is not infrastructure platforms and portfolio, including exactly the self-service model. the future of the SCE offering as the platforms are ▪ IBM essentially donated functionality from its reconciled. Prospective customers should ask IBM SmartCloud Foundation product to the Folsom about its SoftLayer integration plans. release of OpenStack -- and going forward, all future versions of SmartCloud Foundation will be built around OpenStack. Over and above the core K | IBM Sales Tactics OpenStack bits, Diaz says, SmartCloud Foundation adds management, security, orchestration, and ▪ IBM will target high in the organization—often more. leverages CxO relationships. ▪ IBM has gradually lost blade server market share ▪ IBM’s revenue is concentrated in large enterprise through the past three years — this share accounts. These are often mainframe customers declined from 25% in 2010 to 18% in 2013. as well. However, there is early evidence that Flex System ▪ IBM has a large Microsoft alliance. IBM uses Hyperand its derivatives are now returning the vendor V for server virtualization technology. IBM’s to net growth. virtualization technology is based on hypervisor ▪ IBM's x86 server strategy has long lived in the firmware from its zSeries mainframe. Hypervisor shadow of much stronger marketing and firmware virtualization is not compatible with x86 messaging of Power and mainframe systems. The platforms. strong corporate commitment to PureSystems has yet to dispel speculation about the vendor's commitment to the x86 server market; and fresh I N S TA LLE D B A S E • Traditional focus on large clients • Introduce heavily discounted valuespeculation about IBM potentially divesting some products during time of renewal or all of its x86 server business will create • Discuss integration with customer’s e additional flux until the situation is resolved. infrastructure management products ▪ Although we know IBM is investing strongly in • Use portfolio pricing reference and case study generation, client • Upsell products feedback indicates that the number of proven references remains limited. 2014 © Microsoft Corporation | Confidential | For Microsoft Internal Use Only

C O M P E T I T V E SI T U AT I ON

• Leverage portfolio pricin • Start with an”open” messa there. • Push broad portfolio and management • May offer software at a hea year—greatly increase co • Leverage executive relationships brand

CU S T O M E R L OC K- I N

• IBM Global Services customized • Initially aggressively discount SW maintenance fees later

L | Position IBM as a Legacy Physical Infrastructure Management Vendor ▪ ▪ ▪

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Remind customer of the inherent complexity in IBM’s management tools Reference IBM’s three different cloud platforms and evolving strategy Is IBM trying to sell a low price solution which ultimately will not match the customer’s needs? IBM’s most complete CMP solution is Service Delivery Manager—Are they trying to sell another cloud management platform to appear as the low price solution? IBM’s other cloud management platforms require additional IBM management tools for basic functionality

M | Selecting Your Best Sales Strategy

Compete Understanding the Scenarios Description ▪ Customer has little IBM software installed or is unhappy with their existing portfolio of IBM management software ▪ Greenfield cloud opportunity What to Expect ▪ IBM will leverage their brand strength and potentially any hardware relationships. ▪ They will likely utilize IBM Global Services or the help of a channel partner to perform any upfront consulting. ▪ IBM will likely leverage their CxO relationships. ▪ Compete with a full System Center Suite stack, specifically focusing on the completeness of Microsoft vision.

Embrace Understanding the Scenarios Description ▪ Customer has installed some IBM ITOM tools. ▪ Does the customer see this as a natural extension of their existing IBM tools? What to Expect ▪ The key battle to focus on will be between IBM Service Delivery Manager and Microsoft Orchestrator. If IBM is positioning Service Automation Manager or SmartCloud Provisioning, 2014 © Microsoft Corporation | Confidential | For Microsoft Internal Use Only

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they are likely trying to hit a customer cost target by offering a partial solution. Embrace the existing IBM ITOM tools and show how Microsoft products can co-exist. Remember that IBM positions Service Delivery Manager exclusively as a private cloud solution.

Surround Understanding the Scenarios Description ▪ Customer has made the decision to build out the IBM Service Delivery Manager or Service Automation Manager or SmartCloud Provisioning. What to Expect If the customer has selected Service Automation Manager or SmartCloud Provisioning, then they will likely need other cloud management tools such as configuration management, change management, release management, and financial management.

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It is important to stay engaged and try to sell adjacent solutions like App controller and Service Manager. Ongoing engagement should also be used to protect the Microsoft footprint as the IBM cloud management platform solutions support multiple hypervisors including XEN and KVM.

N | Expose the IBM Weakness ▪ ▪ ▪ ▪

Complexity: Many features require additional IBM management tools. Customers who previously purchased Service Delivery Manager or Service Automation Manager have no upgrade path. Legacy IBM solutions: IBM has taken many of their Tivoli physical management tools and repurposed or rebranded them for the cloud.

O | Handling Objections Q. We already have IBM ITOM software to manage our physical infrastructure. A. IBM has some long established tools in ITOM. However, Microsoft is far better aligned and strategically positioned to deliver the requirements of a comprehensive cloud management platform (CMP)

with our SDDC strategy and vision. Since our focus is on the cloud stack, we are best positioned to both leverage your existing IBM and Microsoft investments by taking your business to the next level of IT agility, efficiency, and cost savings in the cloud. Q. Is Microsoft really a management company? A. Yes, and one closely tied with the leading platform for cloud computing. Microsoft invented leading management innovations such as Hyper-V manager and continues to pave the way for management innovations in cloud through our System Center Suite. Q. Why would you trust your hypervisor vendor to tell you how much hypervisor you need? A. Microsoft leverages its own domain expertise and tight platform integration to provide accurate capacity management and optimization to get the most out of your cloud and overall Microsoft investment. Q. I am concerned about vendor “Lock-in”. A. Heterogeneity is a term used loosely by many ITOM vendors (including IBM). The fact is that IBM has many aspects of their own product suites that promote vendor lock-in. Microsoft leverages existing investments in infrastructure and management to fully support heterogeneous and hybrid cloud environment.

5 | Resources Refer to additional System Center 2012 R2 resources System Center 2012 R2 on TechNet Download and evaluate System Center 2012 R2 System Center marketplace Check out our blogs System Center 2012 R2 Read the System Center 2012 R2 Datasheet Read the System Center 2012 R2 White Paper See how System Center 2012 R2 Configuration Manager and Windows Intune helps manage users and their devices Benefits and capabilities System Center solutions Virtual Labs: System Center 2012 R2 System Center 2012 R2 Cloud & Datacenter Management System Center 2012 R2 Configuration Manager System Center 2012 R2 Endpoint Protection

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