Download DCIM pure play Nlyte expands integrations, functions for key markets

DCIM pure play Nlyte expands integrations, functions for key markets
https://451research.com/report-short?entityId=90513
IMPACT REPORT
DCIM pure play Nlyte
expands integrations,
functions for key markets
OCTOBER 14 2016
BY RHONDA ASCIERTO (/ANALYST-TEAM/ANALYST/RHONDA+ASCIERTO)
Nlyte Software became one of the top-three DCIM players by revenue and customers earlier this
year, following its acquisition of (/report-short?entityId=88035) real-time monitoring and risk
analysis specialist FieldView Solutions. Now that it unequivocally has a full DCIM suite, with
both asset management and monitoring, and a customer list studded with big names, Nlyte is
moving forward on several fronts. It has integrated FieldView's software and rewritten its
platform so that the third-party IT management systems it integrates with can access all of its
data sources, bi-directionally and in real time. Nlyte is also tailoring elements of its software to
target verticals such as the US federal government, which faces a new DCIM mandate, and
colocation service providers.
The 451 Take
Nlyte Software stands out in the crowded and often confusing DCIM sector. The addition of
FieldView has created a best-of-breed DCIM system, and Nlyte has more revenue and large
clients than any other DCIM-only supplier. However, DCIM sales cycles continue to be long
and demanding, and competition often comes from far larger datacenter equipment and
services suppliers, such as Schneider Electric and Emerson Network Power – both
formidable competitors that are investing heavily. Nlyte continues to innovate, invest and
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(we believe) grow, but as a late-stage VC-backed pure play, its reach and access are relatively
limited (compared with its giant rivals). This, combined with emerging DCIM-based cloud
offerings from rivals, may mean that Nlyte will need to work even harder in the coming
months and years to retain its top billing. We view the company as a high-value acquisition
target, potentially for a datacenter technologies or software supplier, or even one of its large
customers.
Context
San Mateo, California-based Nlyte has raised more than $40m in funding since its inception in
2004. Following a $12m series C round in late 2010, Nlyte secured additional financing in early
2016 to fund its acquisition of FieldView for an undisclosed amount.
While Nlyte does not disclose its financials, the company says it is profitable. 451 Research
believes its sales are $30-35m. It has more than 125 employees, including full-time contractors.
Approximately 65% of Nlyte's staff is in the US; the rest are in London, where its development
team is based. Investors include Balderton Capital, Montalcino Holdings, NGEN Partners and
Ruffer.
Nlyte plays mostly in midsize and large datacenters. A small deal size for Nlyte would be
$50,000, with $200,000-plus being more typical. The single largest deal transaction for Nlyte to
date was more than $4m (and the company says the value of the full deal over time will be
$12m).
The company's software is geared toward customers with medium to large (5MW and up) or
multiple datacenters, to give a global and local view of different sites. Nlyte says it has more than
275 customers, mostly in the financial services, high tech, colocation, government and healthcare
sectors. The company's US government base includes agencies that are subject to the Data Center
Optimization Initiative (DCOI) (/report-short?entityId=88306), which mandates DCIM in all
federal datacenters by 2018. In April Nlyte released add-on dashboards and reports that are
designed to meet the government's specific requirements under the mandate.
About 65% of Nlyte's revenue is generated from software licenses, with the remainder coming
from deployment and support (Nlyte does not do custom development for clients). Sales are
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focused on North America and Western Europe. Latin America and Asia-Pacific are covered by
channel partners, and it has some resale partners in Europe. Nlyte has a technical integration
and an OEM partnership with BMC. Hewlett Packard Enterprise and IBM are also resellers of
Nlyte.
Marquee Nlyte customers include Atos, Canon, Cisco, Cummins, DHL, Fannie Mae, FDIC, HPE,
Monsanto, RBC, UnitedHealth Group, US Federal Reserve System, US Securities and Exchange
Commission, Verizon and Walgreens, among others. Many more are not publicly disclosed. Nlyte
says that about one-third of its current deal pipeline is new customers, while the remainder are
existing customers expanding their deployments – across multiple datacenters or within a single
facility.
When Nlyte acquired FieldView, they shared fewer than a dozen customers. The company's
management expects there will be pull-through sales of FieldView's monitoring capabilities (now
known as NEO) into Nlyte's existing asset management customers.
Three former FieldView executives have joined Nlyte's management team, including FieldView
CEO and founder Fred Dirla, who now serves as Nlyte's COO. The company says there have been
minimal staff reductions since the FieldView acquisition due to some redundant roles.
Technology
Nlyte's asset management software, recently renamed Nlyte Enterprise Edition, tracks various
data, including asset interdependencies in the power chain (from the substation to the device
outlet) and their connectivity (from the network switch to the patch panel and individual network
ports). Asset attributes are visualized in a number of ways, including to-scale floor plans and with
individual real-time images of assets. The software includes predictive capacity management and
what-if scenario planning, as well as proposals for optimal asset placement.
FieldView's real-time monitoring software, now branded as Nlyte Energy Optimizer, or NEO,
includes differentiated risk analysis features such as failover simulation and fault analysis. Nlyte
Enterprise (asset management) and NEO (real-time monitoring) are sold separately and as a
pre-integrated suite called Enterprise Platinum. Add-on modules, which are separately priced,
include:
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Goods Receiving – a mobile-device interface for asset-tagging scanners (any type) that
automatically updates Nlyte's asset data or workflows, as well as any ITSM systems that are
connected to Nlyte.
Nlyte Audit – designed to help organizations meet their compliance requirements for asset
audits, including type and location of assets, as well as audit history.
The new colocation version is, in many ways, a repositioning of NEO to enable bifurcated views
for individual colocation customers, as well as APIs for IT management systems or CMDBs that
providers can offer their customers. For an additional cost, colos can also offer Nlyte Enterprise
(asset management) to their customers (delivered as SaaS). Nlyte also has a hyperscale version of
its software that includes architectural changes to the base code to support the software's
performance at scale, up to 150,000 racks.
Integration and DCSO strategy
Nlyte was an early mover in integrating data from its platform into various third-party systems,
including IT management databases and directories, to enable a datacenter service optimization
(DCSO) approach. The latest Nlyte 8 version is a rewrite of the integrated Nlyte and FieldView
tools, to enable improved bidirectional data flow between the two systems and the ITSM systems
they connect to. Also new is the ability for the Nlyte API to capture deep links between
third-party databases and Nlyte's asset database. This means it can automatically push and pull
information between CMDBs, service desks or external asset management systems, so that users
can move from one system to the next.
For example, Nlyte's asset database can be linked to an ITSM database for bidirectional data
exchanges and data 'shearing' (reducing duplicate data), as well as to align configuration items
(CIs) from CMDBs with DCIM assets.
A basic use case could involve a new server being ordered. Data about the device is typically
recorded first in an ITSM system as a CMDB CI. The creation of this CI is automatically identified
by Nlyte and a 'planned asset record' is created (in the DCIM system). Nlyte's capacity planning
features determine the datacenter's available capacity for this server, and the rack unit position
and connections are reserved for the device. A detailed work order is then generated from Nlyte.
Once the server is installed (via the work order's visual instructions), the DCIM system is
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automatically updated, which auto-updates the CI record within the CMDB, including the
physical location of the server.
This process promises a validated 'source of truth' for the ITSM and DCIM systems, as related
processes such as incident, change and compliance audits. Another new feature to version 8.1 is
the ability to raise an incident request in the Nlyte system and push it into a service desk or other
system. (This builds on its previous capability to raise change orders in Nlyte that are pushed to
IT management systems.) Real-time event management can also extend into automation and
migration systems (as well as NEO itself).
Nlyte has more than 50 connectors into ITSM platforms, virtualization systems, financial
systems and specialist DCIM systems (such as RF Code), as well as building management
systems, power strips and sensors. The company's communications framework maps its APIs to
the systems it connects to. Nlyte publishes its APIs for its customers.
Looking ahead, the company intends to create an API so that its DCIM data can be sent to and
from cognitive learning systems, along the lines of IBM's Watson or Google's Deepmind. A
bidirectional integration would mean that these artificial intelligence systems could access
historic DCIM data and data patterns, such as the inlet temperature of servers during different
times of the day and year, to determine optimal server placement or optimal server types, for
example.
The company is also planning to support the relatively new Redfish protocol, developed by
Emerson Network Power and collaborators Intel, Broadcom, Microsoft and HPE. This protocol,
which is growing in popularity, is used in the datacenter for out-of-band management to
remotely control and troubleshoot nodes even when the unit is offline or unassociated with an
OS. More broadly, Redfish was designed to form the basis of a unified data-aggregation platform
for datacenter and, at some point, Internet of Things management.
Competition
The DCIM arena is overcrowded, with about 70 suppliers that range considerably in size and
scope. Their DCIM products vary in function and application, creating some confusion (and
usually a high level of vendor scrutiny) among buyers. In recent years, a greater portion of sales
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is being won by a relatively small group of dominant, innovative suppliers (we believe).
Nlyte is part of that elite group, alongside Schneider Electric and Emerson Network Power
(which was recently acquired by (/report-short?entityId=89880) PE firm Platinum Equity).
Schneider recently released the industry's first DCIM-based cloud offering (/reportshort?entityId=90336), which in many ways is a remote data-driven services alternative to
on-premises DCIM approaches. Another large rival, Eaton, is preparing to launch its own
DCIM-based cloud analytics (/report-short?entityId=90163) service, which will predict the
likelihood of component failures in its datacenter backup power systems before they happen.
But the market is still relatively immature and open, and there are many suppliers with strong
offerings and strategies. Other large datacenter equipment suppliers that are DCIM rivals include
Siemens and ABB, as well as connectivity specialists CommScope and Panduit. Geist, Baselayer
Technologies and Sunbird Software are among those that are also becoming increasingly
competitive in DCIM. Most of these suppliers have monitoring and asset management
capabilities, along with predictive analytics and other features. Some are supporting DCSO
approaches, with mixed success.
SWOT Analysis
Strengths
Weaknesses
Nlyte has a strong brand, expertise and respect in the
Nyte is still relatively small, lacking the resources of
DCIM field, and has won some very large and
the large global equipment providers it competes with.
high-profile customers.
Opportunities
Threats
Most demand for DCIM today is from large enterprises
Large equipment makers that are also DCIM suppliers
and colocation providers. Suppliers that offer scalable
may compete aggressively on software pricing. Over
and tailored features for these segments are best
time, datacenter operators may prefer new (and
positioned to grow. Most datacenters today have yet to
low-cost) DCIM-based cloud-delivered analytics and
adopt DCIM.
management services over on-premises (or SaaS)
DCIM.
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Rhonda Ascierto (/analyst-team/analyst/Rhonda+Ascierto)
Research Director, Datacenter Technologies & Eco-Efficient IT
M&A ACTIVITY BY SECTOR
Datacenter technology / Datacenter management / Management, planning & analysis (1) (https://makb.the451group.com
/results?basic_selected_sectors=996)
Datacenter technology / Datacenter management / Monitoring & control (2) (https://makb.the451group.com
/results?basic_selected_sectors=986)
M&A ACTIVITY BY ACQUIRER
ABB Group (13) (https://makb.the451group.com/results?basic_acquirers=ABB+Group)
Atos SE (16) (https://makb.the451group.com/results?basic_acquirers=Atos+SE)
BMC Software Inc. (30) (https://makb.the451group.com/results?basic_acquirers=BMC+Software Inc.)
Broadcom Corporation (28) (https://makb.the451group.com/results?basic_acquirers=Broadcom+Corporation)
Canon Europa N.V. (12) (https://makb.the451group.com/results?basic_acquirers=Canon+Europa N.V.)
Cisco Systems Inc. (126) (https://makb.the451group.com/results?basic_acquirers=Cisco+Systems Inc.)
CommScope Inc. (11) (https://makb.the451group.com/results?basic_acquirers=CommScope+Inc.)
Emerson Electric Co. (21) (https://makb.the451group.com/results?basic_acquirers=Emerson+Electric Co.)
Google Inc. (204) (https://makb.the451group.com/results?basic_acquirers=Google+Inc.)
IBM Corporation (164) (https://makb.the451group.com/results?basic_acquirers=IBM+Corporation)
Ingenix (15) (https://makb.the451group.com/results?basic_acquirers=Ingenix)
Intel Corporation (81) (https://makb.the451group.com/results?basic_acquirers=Intel+Corporation)
Microsoft Corporation (157) (https://makb.the451group.com/results?basic_acquirers=Microsoft+Corporation)
Nlyte Software Limited [fka Global DataCenter Management] (1) (https://makb.the451group.com
/results?basic_acquirers=Nlyte+Software Limited [fka Global DataCenter Management])
Panduit Corporation (3) (https://makb.the451group.com/results?basic_acquirers=Panduit+Corporation)
Royal Bank of Canada [dba RBC Financial Group] (1) (https://makb.the451group.com/results?basic_acquirers=Royal+Bank of
Canada [dba RBC Financial Group])
Schneider Electric SA (41) (https://makb.the451group.com/results?basic_acquirers=Schneider+Electric SA)
Verizon Business (40) (https://makb.the451group.com/results?basic_acquirers=Verizon+Business)
Walgreen Co. (1) (https://makb.the451group.com/results?basic_acquirers=Walgreen+Co.)
Figures shown indicate number of transactions
COMPANY MENTIONS (PRIMARY)
Nlyte Software (/search?company=Nlyte+Software+)
COMPANY MENTIONS (OTHER)
ABB , Atos , Balderton Capital , Baselayer Technology , BMC , Broadcom , Canon , Cisco , Cummins , DHL Global Mail , Eaton , Emerson
Network Power , Fannie Mae , Federal Deposit Insurance Corporation , FieldView Solutions , Geist Global , Google , Hewlett Packard
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Enterprise , IBM , Intel , CommScope , Microsoft , Monsanto , Montalcino Holdings , NGEN Partners , Panduit , Platinum Equity , Royal
Bank of Canada , RF Code , Ruffer , Schneider Electric , US Securities and Exchange Commission , Siemens AG , Sunbird Software ,
UnitedHealth Group , US Federal Reserve , Verizon , Walgreen Co (/search?company=Walgreen+Co)
CHANNELS
Datacenter Technologies (/dashboard?view=channel&channel=1)
SECTORS
All / Datacenter technology / Datacenter management / Management, planning & analysis (/search?sector=996)
All / Datacenter technology / Datacenter management / Monitoring & control (/search?sector=986)
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