Top-level categories: APM’s potential with big-budget items

Let’s follow the money.

“Application Monitor’s” usual focus is use and implementation of Application Performance Management (APM). As we’ve described over the last months, APM is both important and difficult. It’s important, because available, responsive applications are simply crucial in many organizations. APM is difficult mostly because end-user experience (EUE) depends on co-operation between every moving part in information technology (IT), and connecting a slowdown to its root cause is a hard problem.

Finance is like that, except more so: important, and difficult to get right in full detail. It’s worth a few moments at the beginning of 2013 to set the context for APM by thinking about how organizations spend money on IT, and the “big-picture” consequences.

First, recognize that money will flow much as it did in 2012. It will be unusual for any aggregated category of spending to move by more than single digits. Gartner shows “worldwide IT spending to total a 4.2 percent increase from 2012”, with modest shifts among Gartner’s five top-level segments. There certainly are more dramatic changes at the lowest levels: tablets are coming on stronger than conservatives expected, as the previous article mentions, pushing netbooks, for instance, entirely out of the market.

Corporate Executive Board, in the person of its managing director Andrew Home, cuts the pie somewhat differently in seeing “… around a third of IT budgets [on analytics, mobility, and collaboration], a third on large enterprise systems [such as ERP and CRM], and a further third on infrastructure.” Home argues forcefully that this amounts to an unhealthy skewing in the direction of automation; for him, the big gains now are in the area of collaboration. Companies need more than just the cost savings of migrating workflows to computers: the people in them need to work smarter together. For him, organizations “pushing hardest for improvements are allocating two-thirds of all IT spending to the tools that are really capable of transforming the way users work”, that is, collaboration and its allies.

Home doesn’t convince me, but perhaps that’s merely because so much of my own background is in process automation. It’s not clear to me yet that the current generation of collaboration and mobility products truly promotes smarter operation. The larger point, though, is to be strategically realistic. Actual expenses of companies are one significant measure of the importance of different sectors. APM must work well for enterprise systems, business intelligence (BI), and workplace collaboration, or even its best accomplishments will total only to “rounding error”.

“Application Monitor” has emphasized lately that APM needs to be selective: it’s impractical to swallow the whole elephant of IT at once, and far more sensible to chew first through the handful of domains where APM’s impact is greatest. While cost imperfectly measures value, APM that validates or enables the applications with enough of a constituency to receive major funding is the kind of APM that will be renewed next year.

Detailed implications of the strategy of APM deployment will appear in several follow-ups over the next month. For today, keep in mind one final opportunity that a focus on the big picture provides. Gartner’s press releases break down worldwide IT spending of US $3.7 trillion projected for 2013, with details on tablets, storage, and more, before finally mentioning, near the end, the fifth of its five sectors. It’s the largest one, though! With annual billings of US $1.7 trillion, telecom services manage to be simultaneously gargantuan, forgettable, and vulnerable to cost-cutting. A particular goal of “Application Monitor” in February is exploration of ways APM impacts telecom efficiency.