In this episode of LogicTalks, Mark Banfield, Chief Revenue Officer at LogicMonitor, is joined by Nancy Gohring, Senior Analyst at 451 Research to talk about how today’s new realities effect how IT organizations are approaching the tools and solutions they use to retain and grow their customer base, keep employees production and their businesses up and running. From the reasons why it’s a good idea to continue investments in IT technologies, to tackling tool sprawl, to some unique ways your organization could be using your monitoring solution to find efficiencies and cost savings, this is one conversation you won’t want to miss!
Mark Banfield – Hello everyone, and welcome to LogicTalks. My name’s Mark Banfield, and I’m Chief Revenue Officer here at LogicMonitor. Today we’re really pleased to be joined by Nancy Gohring. Nancy works for 451 Research. She’s responsible for application and performance monitoring and she just recently completed a really interesting report on the impact that COVID-19 is having on the industry and we’re really pleased to have her here with us today. Welcome, Nancy.
Nancy Gohring – Thanks. Thanks for having me.
Mark Banfield – Nancy, maybe just, just to start with, just give us a quick understanding on 451 Research and the background on the company and specifically your role.
Nancy Gohring – Sure, yeah. We’re obviously a research firm and I specifically follow application and infrastructure performance, which means that I spend my days talking to vendors that do APM, infrastructure monitoring, log analytics and sort of related segments and then I also obviously talk to enterprises about their needs and offer some advice in terms of how to fill those needs.
Mark Banfield – Great, well we’re really pleased to have you. So, just to start off with, clearly COVID-19’s having a such severe impact on all aspects of society all over the world and on all kinds of different businesses, all kind of different industries, all kinds of different verticals. Could you perhaps comment on some of the impacts and trends that you’re seeing recently?
Nancy Gohring – Yeah, sure. I mean, you know, obviously from a very big picture, it is clear that the impact is very sector-specific, right? So obviously if you’re in travel, you’re in trouble. But then there’s other businesses that are really benefiting, that they’re seeing the upside, right? If you’re in distance learning or have any other sort of streaming offering or something like that, you know, you’re gonna be doing probably better than you were. What’s interesting is, so we did this survey, it was sort of early days of when people were being quarantined so this was the second half of March that we ran this survey. So one of the questions we asked people is, “Are you feeling strain on your IT resources?” And 57% of respondents said yeah, indeed they were. And that’s, you know, again, probably pretty obvious and I think that strain can come from a couple of different sources. One would be internal, right? So if suddenly all of your people who were previously working in an office have now shifted home. That’s a different type of workload, right? Maybe everyone’s coming in through a VPN. How does that impact your internal resources? It could also be external, right? So some of these businesses that have seen a spike in end users accessing apps and service are also gonna see a strain on IT resources. What I thought was interesting though is we asked an additional question which is how are you keeping up with that, right? So, how are your resources keeping up with this increased strain? And not quite half, just a little below half, said pretty good, and I thought that was interesting. Again, that was early days, but I think it indicates a decent shift in the market that has already happened towards digital transformation, maybe cloud pick up, right? Because if you’re on cloud, scaling is a lot easier. So, some pretty interesting kind of broad trends that we’ve seen starting in those early days.
Mark Banfield – Yeah, no, that’s really interesting, and we definitely see the same. I mean, certainly, I’m seeing that companies that are more digitized and have been through more digital transformation initiatives are certainly coping better with the current situation than ones that perhaps haven’t, so.
Nancy Gohring – Certainly, yeah, yeah.
Mark Banfield – Yeah, so, your recent report mentions the pressures on digital properties to perform well escalates as the world moves entirely away from physical commerce to digital. What are some of the steps that businesses can take to meet the digital expectations of their customers?
Nancy Gohring – Sure. Yeah, so just a step back for a second. We did a survey just before COVID-19 where we asked consumers whether or not they would switch the app or service or subscription they were using due to poor or buggy performance and nearly 75% of respondents said somewhat or very likely. So we already knew that people were willing to ditch an app or a service because it performed poorly. So if you’re a business and, you know, this describes you, right, you’ve got to really ensure that your apps and services are performing really well. I mean, obviously you need really good insight into your applications and infrastructure and so that could mean switching the tools that you use despite the fact that this is a chaotic time and you might need to take that on right now. Some people might already be using the, you know, sort of the appropriate tool that can give them the visibility they need. I think now is also a really good time to think about other ways that those tools might be able to serve you. So, you know, you can use your monitoring tools to take a really close look at how you’re using your cloud services and whether or not you are paying for resources that you aren’t using. That’s a great way to cut costs at a time when people are looking for really any way to cut costs, right? You can use your monitoring tools to segment your customer base so that when you have a performance issue, you can zero in on your really high value customers and maybe do some proactive outreach to them so that they don’t leave, right? So that they’re not part of those 75% of people that decide to dump you because of a performance issue. You can use your monitoring tools to just do a better job of correlating performance issues with the impact on the business so that when you have multiple issues, you can better prioritize which ones to focus on. So, you know, those, I think everyone is sort of scrambling, but I think those are really interesting use cases for monitoring tools that can actually be incredibly useful right now.
Mark Banfield – Yeah, so Nancy, we have so many interesting use cases on how people use LogicMonitor for monitoring all kinds of different things. I mean, effectively anything with an IP connection can be monitored and our customers have found really interesting ways to digitize their businesses by monitoring all kinds of things. For example, we have companies in the area of pest control management and literally monitors down to mousetraps, which is really innovative and very different and maybe talks a little bit about how they do digital transformation. So, why do you think some companies find it easier to digitize than others? And give me some examples on what you see happening in the market there.
Nancy Gohring – Yeah, you know, I honestly really think it’s a culture issue, right? So some companies I just think are, they have a harder time maybe thinking outside the box a little bit, or being willing to experiment with interesting ways that you can apply technology. And I think that there are so many interesting examples out there of ways that, you know, most people would never think that new technology can have an impact. So, I mean, you know, you just mentioned this mousetrap example. I think, you know, most people out there would be like, what? Like why would you need to, you know, digitize mousetraps, or how could you do it, or what would the benefit be, right? But clearly someone has discovered a way that that makes sense. So again, I would argue that it’s really a cultural thing and that there’s so, you know, so many different industries can really benefit from different forms of digital transformation. And again, I do think it’s really a cultural thing.
Mark Banfield – Yeah, I think that’s really, really good input. I mean, it sort of makes me think that the more creative you are, the more visionary you are, the more you’ll find opportunities to digitize elements of what you–
Nancy Gohring – Yeah that’s–
Mark Banfield – Manual processes, yeah, so.
Nancy Gohring – Interesting.
Mark Banfield – So, what are you hearing from 451 Research enterprise clients when it comes to the need for tools like infrastructure monitoring and intelligence? What tools are most essential in this new world of remote workforces and digital commerce?
Nancy Gohring – I mean, frankly, like a lot hasn’t changed in terms of the, you know, the best practices. So a couple trends I’m seeing, one is in APM. I think that there’s a growing recognition that there’s different types of tools that you can use to get insight into application, applications that might be appropriate depending on the applications. So there’s some applications that a more traditional approach to APM that gives you code-level visibility might be suited for. There’s other maybe very cloud-native applications that distributed tracing could be a really good tool for giving you good visibility, and then there’s the sort of lightweight APM type of tools that are coming out that do a really good job of correlating the application layer to the infrastructure layer, and those tools can be really helpful in other scenarios. But across the board, I think the really important thing is as you’re thinking about these tools is to be really aware of tool sprawl issues, right? Because this is, I think as people try to solve monitoring problems, they tend to just throw more tools at it and that begins to create new problems. So, you want to think about how you can correlate the data that you’re collecting across this tool set and that’s really gonna give you the best visibility.
Mark Banfield – That’s great, thank you. So, with regards to CFOs, I mean, many CFOs around the world would probably say that now isn’t the best time to invest in new software and technologies. In your mind, however, why is making investments in application infrastructure performance area more important now than ever before?
Nancy Gohring – Yeah, and actually, you know what? We found in our survey, and again, this was the second half of March so things could evolve but even then, it was pretty apparent that there was gonna be, you know, a huge economic impact to the coronavirus. And what was interesting is that people weren’t putting the brakes on their IT resource investment. So something like 34% of people said they actually plan to increase their spending in IT resources and assets. 60 some percent said it would stay the same, and it was only in the ballpark of 3% of people who said they were planning to decrease spending on IT resources and assets. So, I thought that was really interesting and to me indicated a really broad awareness of how important technology is in this current environment. And so, you know, from a monitoring perspective, I think, you know, again, it’s become really apparent that your digital properties are incredibly important to your business right now and they have to perform really well and a lot of times, the tools are already there, it’s just a matter of beginning to use them or maybe using them in a slightly different way.
Mark Banfield – Yeah, yeah, absolutely, yeah. Okay, so, based on the insights and the revelations from your research that you’re doing, what would you say are some of the key takeaways and recommendations you have for companies to help them through these challenging times and the obstacles that they’re facing due to COVID-19?
Nancy Gohring – You know, it’s interesting because I think that the, you know, your gut reaction when a huge crisis like this hits is to pause everything, pull back on everything, reassess, right, anything particularly that’s gonna involve investments. But what’s interesting is that when we, again, in this same survey, we asked people specifically, “Have you put a pause, “or do you expect to pause strategic initiatives?” And almost half, it was something like 45% of people said no, they’re gonna continue with their IT initiatives and in a lot of cases, I think that that is probably indicative of people that recognize that some of these initiatives are actually really well suited to now. So for instance, cloud migration, right? So, if you need to scale down, you wanna be able to save money, you don’t wanna have to have invested in this enormous data center that’s now just a sunk cost, right? If you’re in the cloud, you scale back, you save some money. So, we’re beginning to actually see that, you know, even beyond our survey, that that really seems to be the case. So, you know, we just saw a bunch of earnings results from the big cloud providers. They all reported really strong first quarter results and reported that their second quarter pipelines are very strong. There was this super interesting quote from Satya Nadella at Microsoft, he said something like they’ve seen two years worth of digital transformation efforts occur within two months. So it seems like, you know, the market is really pursuing these digital transformation strategies because they recognize that when the world has sort of shifted away from a physical environment that can drive revenue to a digital world, you know, those investments are really necessary. It’s what you gotta do to continue to drive revenue.
Mark Banfield – So, thanks so much today, Nancy, for spending some time with us. There’s some amazing and really valuable insight for so many people to learn from. Is there anything you’d like to close out with before we wrap up today?
Nancy Gohring – No, just encouraging people to be open and drive your culture to be open to new efforts that can really help during this crisis. And thanks so much for having me.
Mark Banfield – Oh, you’re very welcome, and thanks so much for being with us. So that’s us today. Thank you very much for attending. Please do go over to our YouTube channel, go and check out all the other videos that we’ve done with customers and other industry experts, and be sure to subscribe there so you can keep up to date with LogicTalks.