Michel Feaster: evaluation

Transcript context

…Which BMC did buy. Which BMC did buy, right. So the interesting thing about that is you don’t email. So what happened is someone from corp dev was assigned to us. So Sandeep Johri at the time was running corporate development and he kind of took ownership of the project on the corp dev side. I wasn’t actually involved in that, not in that piece of it but I wasn’t on all the email chains where they’re emailing Ben. I was in most of the meetings. I did all the technical due diligence so you kind of start these threads and we ran our threads in parallel, so we were talking to both Opsware and BladeLogic. And that involved financial due diligence, customer reviews, technical diligence. It was pretty fascinating. In fact, once we had decided our vendor, we were onsite during their sales kickoff which was a little-known fact and I in fact couldn’t leave the room, so everybody else is allowed to leave but there were so many Mercury people at Opsware that people were worried that if I left, everyone would know who I was. So there’s quite a lot of drama to that. But look, the net of why Opsware versus BladeLogic, to me it boiled down to what do you need to buy and how many acquisitions can we execute. So, there’s kind of a little-known wrinkle here which is why they started as a server automation company, that was the LoudCloud heritage. Ben’s vision was to automate the data center. So they did acquisitions to acquire a runbook automation technology from a company called iConclude that was based in Seattle actually. They bought a network automation company. I actually believe that one was based in Seattle as well. So they made a couple acquisitions to extend their product line from server automation to what they call data center automation. And our theory was actually slightly bigger than that as we felt that what customers wanted to do was deploy services end to end. So the winning vendor would be executing a product strategy to bring desktop, server, network, storage, all of the automation elements into a suite to automate application deployment so that servers on some level are just one tiny piece of an end-to-end IT service. So that was the strategy we were executing. When you look at that, we had a client product already at HP and we had a storage product from these acquisitions we had. So really there was a lot of differences from a market share perspective. Clearly Opsware was ahead of BladeLogic and that's very attractive. You kind of de facto always want to buy the market leader. However, at the time, BladeLogic had a better product than Opsware, so that is the downside of this kind of LoudCloud. And I would say better product in the sense of usability. So where they lost deals, it was on usability. Where they had one deals, it was an enterprise scale. So there were product implications to this kind of pivot that they did. To preview tech themes a little bit, I mean this is something that for listeners that aren’t as familiar with enterprise technology, it is just a hard thing initially to get your mind around. Steve Jobs talked about this that in the enterprise, it’s not always the best product that wins. Opsware was the market leader but as you’re saying, they didn’t have the best product. They had the best sales motion.…

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