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              A U T O M A T ED
      M O N I T O R ING

• Increase Revenue & Margins
• Lower operating costs
• Protect the customer base
                   BUSINESS SERVICE
      Moving up the service s food chain

This White Paper was originally written in 2003 as part of a Business Development
partnership with eG Innovations. While we continue to move up the food chain in many
ways, most of us still have a long way to go to realize a true paradigm shift towards service

Standards such as ISO 20000 may help draft more effective customer/supplier agreements,
but at the end of the day --- particularly in multi-vendor outsourced environments --- the
customer must establish the standards on which process automation may be enabled. This
continues to be very difficult.

Cross domain intelligence is, and will remain, a key to improving effectiveness and efficiency
and is a critical element of moving management’s paradigm up the food chain and closer to
the business.

This kind of automation is still not well understood --- even in the midst of all the
ITIL/ITSM hype (or perhaps because of it). ITSM automation initiatives should strongly
consider monitoring --- automated service monitoring to be precise --- as a key enabler.

Executive Summary
Moving up the services food chain can be an important element of survival for every service
provider --- MSP’s, ASP’s, ISP’s, Systems Integrators, etc. The migration to ‘autonomic
computing’ will be evolutionary and take time. In the meantime, your customers want a
monitoring environment that:

       Moni tors w hat is hap peni ng at ea c h laye r of the inf ra structu re, a cro ss an array
       of netwo rk, sys tem an d appl ica tion com pone nts --- an d a utom ati cally ide ntifi es
       whi c h co mpo nent laye r, i n w hi c h do ma in, i s t he sou rce of a pro blem.

This end-to-end automation is essential for those companies wanting to move up the food
chain; providing opportunities to increase revenues, lower operating costs and protect the
customer base. The emerging customer demand for business service management will
mandate an easy, effective, end-to-end intelligence engine that fosters collaborative
management and reduces costs through automation.

While collaboration and competition will be as diverse as the number of different MSP’s,
ASP’s, Systems Integrators, Application Developers, ISP’s, Carriers, and many others ---
customer demand for business service management and the pressure to move up the service
provider food chain will make end-to-end monitoring intelligence essential for customers
and service providers alike.

eG Innovations has built a flexible, software-based technology that was specifically designed
to address these problems. Traditional management software simply cannot accommodate
these requirements in a cost-effective or timely manner.

This White Paper was written for ‘xSP’s’ --- Managed Service Providers (MSP), Application
Service Providers (ASP), Internet Service Providers (ISP), Systems Integrators and even
Application Developers and IT Consulting firms --- to provide:

     An overview of Business Service Management and why it is important
     Why automated business service monitoring is essential to effectively participate in
      the opportunities that business service management demand is creating
     Illustrate how one company, eG Innovations, addresses automated monitoring of
      business services
     Examples service providers can take to leverage the demand for business service
      management, from different perspectives

Service providers of all kinds must continue to add value or face shrinking margins and
eroding customer bases. This paper provides some suggestions on how these competitors
can expand their services; improve quality of service and lower costs through automation of
the monitoring environment--- moving up the food chain and increasing customer value.

What is business service management and why is it
important to me?
Developers of management software are frantically attempting to provide a holistic view of
today’s increasingly complex e-infrastructures, which must take network, systems and
applications into account, and often across a dizzying array of Internet Data Centers (IDS),
Web-hosting providers, and/or Application Service Providers.

This is leading customers to migrate from component management
via independent silos to a service-centric model as depicted above.
Adding either application or network/systems management has
become a critical component to effective business service

In a recent study conducted by Enterprise Management Associates
on application management, consistently mentioned as a key-missing
piece was end-to-end monitoring.

Additional pressure is increasing to manage the IT infrastructure from a business
perspective, and align IT with the needs of the business. By 2004, META Group estimated
that 60% of organizations would manage technology from a business services perspective.

Customers will soon demand application management, end-user experience monitoring and
business oriented end-to-end views from their IT management partners, presenting both an
opportunity for revenue growth and a threat for those who do not satisfy these demands.
This creates pressure on xSP’s to move up the hosted-services ‘food chain’ as depicted on
the cover of this document.


Each provider is naturally focusing on their core competency, whether that is providing
Internet Access Services, Web Hosting, Systems Integration or many other services. The
tools they have incorporated are naturally tuned to those competencies. Increasingly
however, customers’ business systems have multiple complex dependencies, often across
many different providers.

Many providers of managed IT services (typically MSP’s) offer independent
network/systems layer monitoring, adding application-specific modules for individual client
requirements or (more commonly) not providing application support at all. Some are
managing applications (ASP’s) but do not support network layer components, and still
others may be hosting a web site but do not support other critical components of the end-
to-end business system.

                                                                            With the use of multi-tier
            Traditional Monitoring                                         environments, applications no longer
                                                                           operate in isolation – e.g., a failure of
  Application Monitoring:
 These solutions
 adopt a silo
                                                                           the backend database can cause
                                                                           applications executing on an
 approach                                     Database
                                              Manager    Middleware

                                             Database    Database          application server that uses the
                                                             Server        database to fail as well. The
              Network           Network       Network     Network          interdependency between business
              Hardware          Hardware     Hardware    Hardware          service components poses interesting
              Firewall        Web Server     Database    App Server        challenges for monitoring.
          Network/System Layer Monitoring:
         Application layer failures
         go undetected                                                                A single problem can
propagate across the entire IT infrastructure, resulting in every management
product sounding an alarm, which results in the situation where a                                                            Svc
single problem generates many, many alarms. Even when                                              &
customers and service providers work cooperatively to                                        xit
                                                                                         ple                   Application
establish seemingly common-sense d-marcation points                             cts
and service level agreements, problems in one area                 oin

of a complex business service often appear as             be
                                                        m                                                   Database
symptoms in other areas; often resulting in          Nu
                                                                                                                              Co-location &

finger -pointing.                                                                             Web Server
Even end-to-end reporting solutions do not                                                 Network

completely address the problem, because while
they provide vast amounts of reporting data, the
                                                                                                                 CUSTOMER PREMISE

user must provide the intelligence required to
determine which report is relevant at any point in                                        Customer Demand
time for a specific problem.

To address these issues, customers and service providers have been looking towards root-
cause technologies that correlate the enormous amount of alarms that can result from even a
simple IT service problem, and tell them which alarm is the true cause of the problem.

The problem with this scenario is that the increasing number of products introduced into
the customers’ monitoring environment add significant costs; in people, products and
integration. These and other factors are playing a role in the tremendous increased interest
from customers looking for a better way to monitor their critical IT services, and driving the
demand for business services management.

Importance of automation in business service

The costs for delivering business service management are driven by the need for additional
(typically application) skill sets and increased fault isolation times when problems occur. In
many cases, providers of managed services will simply not be able to compete in the
application management arena without some level of automated problem isolation capability.

For example, an MSP wanting to add application management can quickly exceed in-house
capabilities to cost-effectively isolate application-related problems (see Cause and Effect).
Combine this with the existing workload in isolating network and system problems and you
can see that costs and quality of service could quickly get out of control. The cause and
effect of just application layer problems, illustrated below, does not even account for
network/system related problems that could appear as potential application issues.

Clearly, in order to cost-
effectively move up (or down)
the food chain, providers of all
types must be able to accurately,
quickly and easily isolate the true
source of problems across end-
to-end business service
infrastructures. Doing so, even if
the provider does not have full
capabilities in-house, allows
them to become a ‘services
manager’ for their clients; quickly
bringing in the correct client
and/or partner resources as

        The a bili ty to mo nito r w hat is hap pen in g a t e ac h l ayer of t he inf ra st ruc tu re,
        acro ss a n a rray of net work, sys tem an d ap plic at ion com pon ents --- an d
        auto mat ically i den tify w hi ch com pone nt laye r, in w hic h do ma in, is t he s ou rce of
        a p roble m --- is t he key to effec ti ve IT mon ito rin g.

Perhaps another key consideration for business service management is that besides moving
up the technology stack, business service management provides greater opportunity to move

the sales process up the organization chart as well. Automated business service management
provides for:

     Improved Revenue and Margin opportunities
     Reduced Operating Costs
     Greater Account Control and Customer Retention

The rest of this paper will outline how one company --- eG Innovations --- provides
automated business service management software for managed service providers of all kinds
--- quickly, affordably and in a way that allows each of these providers to leverage their
existing skill sets.

eG innovations approach to business service

eG Innovations has addressed these issues with flexible, easy to implement software that was
designed specifically for the emerging requirements of business service monitoring. MSP’s,
ASP’s and other providers can leverage this technology to increase profits, reduce costs
through automation, establish collaborative management relationships and protect their
client base from competitive erosion.

By leveraging lightweight software that can be downloaded from the providers’ web site, and
a software-based management console that securely stores each customer’s monitoring data,
eG can provide:

     Simple, Secure Web-based connectivity to your clients - HTTPS connectivity does
      not require time consuming and costly setup of VPNs.

     Powerful Intelligence Engine - Facilitates proactive multi-layer monitoring of IT
      infrastructures, including real-time monitoring of web transactions and powerful
      correlation algorithms that enable root-cause diagnosis of problems at a single
      mouse click.

     Virtual Manager Architecture - Allows agents distributed across different customer
      domains to be monitored by a single, centralized manager. This novel design offers
      increased efficiency and cost savings for the service provider and facilitates
      collaborative management relationships.

     Personalized Customer Views - Includes a central customer management module
      that provides individualized, real-time views of the hosted infrastructure for each
      customer. In addition to diagnosing and correcting problems instantaneously,
      customers can also analyze and explore methods of reconfiguring their IT
      infrastructure applications for optimal performance.

      Layered Representative Model - Lowers support costs significantly for service
       providers by clearly demarcating between problems in the customer and various
       service provider domains.

      Flexible Deployment & Pricing Options – Agent-based or ‘Agent-less’, central site
       or distributed managers, and software only or appliance-based deployment
       alternatives as well as pay-per-use, subscription service or software license pricing

      Out-of-the-box support for over 85+ popular applications – As well as a GUI-
       driven Integration Console for custom applications.

For more details on the eG Innovations software architecture, look at the Enterprise Management Associates white paper,
eG Innovations: Streamlining Complex Management.

Service provider examples
This section will outline how eG Innovations might be leveraged in various service provider
domains. Of course, the inherent multi-domain nature of the architecture facilitates
collaborative management, which could have the most significant impact to both service
providers and their respective clients.

Consider the following:

For Managed Web Hosting companies –

          “The offering of higher-level hosting in applications and business processes is a
          winning formula” - Mike Regal, IBM Web hosting

          “I see application service providers and system integrators as key targets for
          managed hosting services, as they are in great need of reliable infrastructure on
          which to build their applications.” - Graham Weston, Rackspace

          “Web hosting companies will need to provide more than just basic Web site
          hosting.” - Peter Chambers, Affinity

          “Customer service offerings will keep the industry from commoditization.”
          - Joel Kocher, Interland

For Managed Service Providers (MSPs) –

      “What’s really important is that we have grown from the network and infrastructure
      support into the application management space” - Maureen Ellenberger, CEO of InteQ

      “Over the next few years, the majority of business applications will be service-
      oriented…. During the coming year, I'll predict, the term "automation" will become
      more important than utility, on demand or any other moniker” - Dan Farber, Editor

      "We're trying to move up the value chain - aren't we all…. we're playing on our core
      competence and going in as a managed services play. Management (of Web services)
      sits logically close to the network,“ - Simon Walker, Manager Global Services British

For Application Service Providers (ASPs) –

      “I expect that over time, we will see more relationships between systems integrators,
      value added resellers and ASP’s, as all three groups attempt to provide their
      customers with the widest variety of a la carte services they can offer” – Jeb Bolding,
      Network World Outsourcing

      “While in better financial positions today, the ASP’s that remain still face obstacles,
      not the least of which is corporate reluctance to hand off critical applications to a
      third party” – Jennifer Mears, Network World

      “Software is getting more complex, not less complex, to run and manage” - Laurie
      McCabe, VP Summit Strategies

For Systems Integrators –

       “ …small firms predict that nearly 63 percent of this year's gross profits will come
       from services-related sales. And services account for about half of both revenue and
       profit in midsize and large VAR categories.” – VAR Business

       “ SOAs (Service-Oriented Architectures) will shake the systems-integration industry
       to the core. As more companies implement SOAs and Web services, …. the need
       for integration decreases dramatically, forcing systems integrators to rethink their
       own business models. "A big part of what SOAs and Web services do is enable
       software to integrate automatically, so it changes the whole systems-integration
       business because it makes it easier for applications to talk to each other"
       - Jason Bloomberg, Senior Analyst, ZapThink

The following are a few examples of how automated business service monitoring can
achieve the objective of reduced operating costs, increased revenue and margins, facilitate
collaborative monitoring environments, and improve your ability to sell and keep new

The ability to automate problem isolation can provide cost reductions even for
network/system layer only environments. When application complexities are added to the
mix, this automation is essential. The value of IT management ROIi can be obtained from:

       1. ENHANCEMENT OF AUTOMATION – The business value from achieving
          greater IT productivity by automating management processes. In this case
          productivity gains in responding to problems can result in more effective use of
          staff, reduced travel charges, etc.

Consideration should also be given for the time/costs associated with manually maintaining
or coding correlation rules and scripts for environments where these have been
implemented. In many cases this maintenance effort is eliminated with eG.

Additionally, there is no requirement to establish VPN tunnels or configure Network
Address Translation to obtain a view of the customers’ infrastructure. eG uses a ‘push’
model of communications and secure HTTPS for communicating with your client. This
dramatically shortens provisioning cycles and reduces provisioning costs.

       2. THE VALUE OF AVAILABILITY – Reducing the costs of downtime that
          prevents access to business applications by both internal and external users. This
          will vary from customer to customer, but can be very significant for emerging
          web service (eCommerce) applications.

The revenue vs. downtime analysis is                                             Revenue Vs Downtime
straightforward, as shown, however
performance degradation is often untracked                    30
or unnoticed until the service degrades to      $ (Million)
un-usable levels. The amount of revenue                       15
                                                                                                                      Downtime (Hrs)
lost on this silent problem can be enormous.                  10

eG uses unique proactive monitoring                           5

techniques to identify performance-                           0
                                                              1-Jan   2-Jan   3-Jan   4-Jan   5-Jan   6-Jan   7-Jan
degradation problems in the early stages.                                             Days

eG’s Response time tracking and diagnosis feature can help you identify the cause of the
performance degradations in minutes.

                                        This can result in significant savings opportunities
                                        for your customers as shown.

       3. MANAGING BY BUSINESS SYSTEM – The value gained from the use of a
          business-process, rather than platform-specific, view of the systems. While the
          benefits of this approach are many, they are difficult to quantify. What is
          apparent, is that customers want IT to be managed from a business perspective
          to accomplish:

                Proactive management of service levels in a manner that relates to
                 business metrics

                 Cross-domain historical analysis to assist in more effective forecasting
                  and business impact analysis.

eG provides customer-specific views based on business services, domain expertise, or
whatever view is relevant to the service provider and/or their customer. Since this capability
was built-in to the product from inception, this level of ‘personalization’ takes a few minutes
--- not days or weeks.

eG also provides real-time, web-based reports that customers can access at any time. The
service provider can create ‘favorites’ for each customer/user that can be accessed with a
single click on a daily, weekly, monthly basis or converted to a .pdf file for printing. These
include trending, service level reporting, ‘snapshots’ of an applications performance across
every layer, and many more.

Perhaps more importantly, many of the reports made available to the client (which the
service provider chooses), are made available in context of real-time events, due to the end-
to-end intelligence of the architecture. This can dramatically reduce both service provider
staff training time and increase the value of the reporting service to your customer.

                             INCREASED REVENUE & MARGINS

The pressure to continue adding value increases every day for service providers. As more
and more competitors emerge, and customers become more familiar with existing services,
pressure on margins increases as well. It becomes difficult to increase revenue from the
existing customer base, and in fact revenues can even decline or stagnate over time.

There are several ways business service monitoring can provide opportunities to increase
revenues, each of which will be briefly reviewed here.


Since many of today’s problems are application related, service providers who are already a
trusted partner doing network/system layer monitoring can up-sell eG based application
monitoring very easily. This ‘enhanced service’ can be offered to existing customers at an
attractive premium, since there is already revenue attached to network/system layer

For new clients, eG can be configured to provide network/system layer functionality, using
the same web based interface and providing network/systems layer automation. These
clients can be upgraded at a later date from a central location with no site visit and very
limited provisioning effort.

In fact, the subscription-oriented capabilities of the software architecture could be used in a
‘pay-per-use’ model, where network/systems layer customers could pay for business system
monitoring for a limited amount of time such as seasonal or peak business periods.

    Application Skill Sets

Many xSP’s may not have in-house application skill sets. By carefully constructing a Service
Level Agreement that clearly outlines the lines between monitoring and administering
applications, these providers can include application monitoring as part of an overall
business service monitoring offer and leverage the client and/or partner resources for
administrative support. eG’s out-of-the-box support for over 85 popular applications
significantly reduce the costs associated with application management, and enables this
collaborative approach.

    Collaborative Monitoring/Management

In the same way that Service Level Agreements are constructed to clearly identify d-
marcation points between the customer and providers, eG Innovations use of a simple
layered interface can make it easy for service providers of all types to create custom SLAs
that leverage both the service providers, partners, and customers competencies. By easily
establishing a common web-based interface that can be shared by all parties, each provider
can be notified immediately when problem sources are determined to be in their domain.

This creates opportunities to foster closer ties to alliance partners of all kinds, each of whom
have different (often complimentary) skill sets, focus, and goals but with the same need to
keep up with the pressures to move up the food chain.

Examples of these might include; cooperative ‘virtual staff augmentation’ between an MSP
and a staff augmentation firm, collaborative management by a managed hosting company
(i.e., application skill sets) and a systems integrator or MSP, full life cycle support of the
business system between an application developer and an MSP and/or systems integrator,
and many more.

Example: Leveraging eG Innovations in an Application Development Environment

Web application environments are more complex than ever. The complimentary nature of
testing and monitoring create an ideal environment for collaboration between an Application
Developer and a provider of ongoing monitoring services.

During the development phase, establishing performance benchmarks and tuning for
performance yields a shorter development cycle and avoids deployment/production
mishaps. eG enables the provider(s) to monitor these and other application metrics in real
time: application stability, memory footprint, CPU usage levels, network loads, database
traffic, process memory leaks, thread leaks, application response time, response time across
tiers, locks/deadlocks, etc.

During the deployment phase, eG can act as a neutral observer to quantify the performance
of the application and benchmark it against the development norms. eG can also check for
proper functionality of components of the application, identifying problems faster and
reducing deployment and UAT cycles.

Once deployed, eG will monitor end-to-end performance in real time from an end-user
perspective and with a business orientation. The virtual manager concept allows both the
application developer and the support team to view the same end-to-end test/measurement
data as needed.


Moving up the service provider food chain is one way to continue to add value and stay
competitive. Business Service Monitoring/Management in particular, provide a vehicle for
salespeople to engage in a high-level, business-oriented dialog with their customers. A better
understanding of the customers business needs will lead to improved account penetration
and account control.

In addition, by having an end-to-end view into the customer’s business services, providers
are much more likely to become aware of emerging opportunities. For example, since
capacity planning and trending information are readily available, the provider can provide
early advise on improvements and additions to the customers’ infrastructure --- before a
crisis occurs and a competitor steps in.

eG Innovations may offer service providers with the ability to reduce costs, improve margins
and protect customer bases. Automation, specifically end-to-end business service automation, is a
first step towards ‘autonomic computing’ and will be a requirement to cost-effectively
compete in this space.

In addition, the momentum behind ITIL/ITSM and standards such as ISO 20000 provide
an opportunity for service providers and customers alike to adopt proven processes, which
can improve the customer/supplier relationship for both.

Leveraging an automated service monitoring tool such as eG Innovations can significantly
enhance these opportunities when properly integrated into a management initiative for
continuous service improvement.

                                                        About the Author

John Worthington has over 25 years in IT, having been involved with the service delivery management space from the
supplier side, as a customer, and as a consultant.

John holds a Manager’s Certificate in IT Service Management and provides both Foundation and Practitioner
Certification instruction and consulting around best practice guidance and ISO 20000.

For more information go to:

eG Innovations, Inc. is a global provider of IT Infrastructure performance monitoring and triage solutions. The
company's patented technologies enable proactive monitoring, rapid diagnosis, and instant recovery in enterprise and
service provider networks. By ensuring high availability and optimum performance of mission-critical business services,
eG Innovations' solutions help enhance customers' competitive positioning, lower operational costs and optimize the
performance of their infrastructures. For more information, visit .

i   Return to Business Value: Gaining ROI from Enterprise System Management -IDC


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