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  • Forrester Research, Inc., 60 Acorn Park Drive, Cambridge, MA 02140 USA

    Tel: +1 617.613.6000 | Fax: +1 617.613.5000 | www.forrester.com

    Market Overview: SaaS IT Service Management Toolsby Stephen Mann, February 21, 2013

    FOR: Infrastructure & Operations Professionals

    KEY TAKEAWAYS

    SaaS Can Be A Compelling Opportunity, But Look Beyond The Delivery ModelWhile SaaS tools are sold on the promise of reduced costs, increased simplicity, and quicker time-to-value, you should ultimately base your tool decision on what you need rather than what the tool can off er. And not just your ITIL-capability-based needs -- be driven by customer needs.

    Not All SaaS Tools Were Born EqualBe clear as to the benefi ts you wish to get from the SaaS delivery model. Just because a solution is labeled SaaS doesnt mean it will deliver all of the espoused SaaS benefi ts -- as with an on-premises tool, ask focused questions in areas such as ease of upgrade and total cost of ownership.

    Procuring A New ITSM Tool Is Not EnoughBuying a new ITSM tool wont necessarily improve your ITSM mojo. It will excite technologists and maybe add to or improve process-based capabilities, but your I&O organization may also need signifi cant investment in people and process to gain maximum business value from the technology investment.

  • 2013, Forrester Research, Inc. All rights reserved. Unauthorized reproduction is strictly prohibited. Information is based on best available resources. Opinions reflect judgment at the time and are subject to change. Forrester, Technographics, Forrester Wave, RoleView, TechRadar, and Total Economic Impact are trademarks of Forrester Research, Inc. All other trademarks are the property of their respective companies. To purchase reprints of this document, please email clientsupport@forrester.com. For additional information, go to www.forrester.com.

    FOR INFRASTRUCTURE & OPERATIONS PROFESSIONALS

    WHY READ THIS REPORT

    The practice of IT service management (ITSM) is widely adopted by IT infrastructure and operations (I&O) organizations around the globe to help deliver technology services better, faster, and cheaper. To succeed with ITSM, I&O professionals rely heavily on fit-for-purpose ITSM tools; however, there is often discontent with such tools, and consequently organizations follow a regular cycle of tool churn. And, unfortunately, selecting the right ITSM tool has never been easy, and software-as-a-service (SaaS) now adds an extra dimension of complexity. This market overview offers: information on the growth of the SaaS for ITSM market; guidance on the key functional criteria to assess; a summary of SaaS-related benefits and risks; and overviews of 21 SaaS ITSM vendors and 23 tools classified by target markets. The SaaS delivery model has turned the ITSM tool market on its head; read this report to ensure that you remain grounded when considering the potential of SaaS for ITSM and the available options.

    Table Of Contents

    Software-As-A-Service: The Answer To Your On-Premises ITSM Tool Woes?

    Key Evaluation Criteria When Selecting An SaaS ITSM Solution

    Segmenting The Landscape Of SaaS ITSM Tools And Vendors

    RECOMMENDATIONS

    Let Your Level Of ITSM Maturity Determine Your Tool Needs

    Supplemental Material

    Notes & Resources

    Forrester analyzed SaaS ITSM offerings from 21 vendors: Absolute Software, Axios Systems, BMC Software, CA Technologies, Cherwell Software, EasyVista, helpLine, Hornbill, HP, IBM, LANDesk Software, ManageEngine, SAManage, Serena Software, ServiceNow, Sunrise Software, SunView Software, SysAid Technologies, TOPdesk, Vivantio, and Zendesk.

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    FEBRUARY 21, 2013

  • FOR INFRASTRUCTURE & OPERATIONS PROFESSIONALS

    Market Overview: SaaS IT Service Management Tools 2

    2013, Forrester Research, Inc. Reproduction Prohibited February 21, 2013

    SOFTWARE-AS-A-SERVICE: THE ANSWER TO YOUR ON-PREMISES ITSM TOOL WOES?

    The practice of IT service management is widely adopted by IT I&O organizations around the globe to deliver technology services better, faster, and cheaper. When done right, ITSM improves staff productivity, heightens the quality of service, and reduces operational costs to improve your reputation with the business.1 And as bring-your-own-technology and as-a-service offerings proliferate, I&O must transition from a provider of technology components to a broker of technology services. Mature ITSM is paramount to this.

    To excel at ITSM, I&O professionals rely heavily on the use of fit-for-purpose ITSM tools. The landscape for ITSM tools has long been established, with market share dominated by the on-premises offerings from the big four IT management software vendors: BMC Software, CA Technologies, HP, and IBM. However, the space is quickly being disrupted by software-as-a-service options from existing and new competition. Early indicators show favorable economics and higher customer satisfaction. But is SaaS actually cheaper and is this higher customer satisfaction due to the SaaS delivery model or to new and better-fitting solutions from new and traditional vendors alike? The question remains: Is SaaS the answer to your on-premises ITSM tool woes?

    Traditional Vendors And Their On-Premises Offerings Lead To Customer Dissatisfaction

    During the mid-to-late 2000s, many industry pundits considered the landscape of ITSM tools and vendors both stagnant and saturated. Large enterprises would often select a big four IT management software vendor tool by default. The midmarket would choose a big four tool if they could afford to; if not, then another traditional vendor. In either case, the ITSM market was focused on on-premises solutions where tools were hosted by the customer and bought via a perpetual licensing model. Customer dissatisfaction with this model was rife with customers churning from their vendors every five years. Commonly cited reasons included poor usability and excessive time and resources required to move between versions. Heavily customized big four ITSM products in particular were particularly prone to these issues.

    Today, the on-premises ITSM tools market continues to see a high level of churn as customers swap vendor As ITSM tool for vendor Bs ITSM tool. Forrester continues to hear similar echoes of dissatisfaction from buyers and users of ITSM tools, citing that the incumbent on-premises tool:

    Is too costly to run.

    Is a poor fit to operational and customer requirements.

    Is complicated and cumbersome to use.

  • FOR INFRASTRUCTURE & OPERATIONS PROFESSIONALS

    Market Overview: SaaS IT Service Management Tools 3

    2013, Forrester Research, Inc. Reproduction Prohibited February 21, 2013

    Hasnt kept pace with the latest service management thinking.

    Is an out-of-date version because it would cost too much to upgrade.

    So are we right to blame the on-premises tools? Not always. On-premises tools are often not perfect, but the entire ecosystem is responsible, from the ITSM tool vendors, consultancies, and advisory firms to ITIL publication and training providers, and finally the customers themselves. Specifically, Forrester finds that customers often ask the wrong questions during product evaluations and therefore dont get the answers they need. Likewise, customers that customize the tool within an inch of usability not only frustrate users but make it difficult to move between versions. Finally, many users do not use tools to their maximum potential due to a number of issues. An example is the inability to extend ITIL process adoption (and thus tool use) due to the pressures of day-to-day ITSM activities such as incident-management-driven firefighting.

    We have all had a hand in placing too much emphasis on ITIL capabilities and drifting away from the real drivers for ITSM: to facilitate and ensure positive business outcomes from IT.

    Enter Software-As-A-Service

    In 2007, two things forever changed the landscape of ITSM tools and vendors:

    ITIL v3 extended the scope of ITSM from 10 processes to 28. The introduction of the service catalog, for example, was a game-changer. Vendors with extended service desk capabilities were no longer seen as enough if they didnt support ITIL v3.

    ServiceNow started to gain real traction with its modern SaaS ITSM tool. The subscription-based pricing model native to SaaS is an operating expense (opex), not a capital expense (capex). These economics led to a quicker time-to-value that became attractive to large organizations that continued to feel the pressure from the 2008 financial crisis.

    Jumping forward to 2012, nearly all ITSM tool vendors across all market segments now offer an SaaS solution, and ITSM tool vendors of all sizes now have far greater geographic reach in terms of both marketing and sales capabilities. There is also a blurring between enterprise and the midmarket, with an emphasis on an organizations ITSM maturity as well as its size.

    The Key Benefits Of SaaS For ITSM

    The software-as-a-service delivery model can offer fast deployment speeds, low upfront costs, and ongoing flexibility to scale up or down as needs change. These benefits are universal, whether applied to customer relationship management (CRM), enterprise resource planning (ERP), collaboration, or ITSM.2 Key benefits of the SaaS delivery model for ITSM

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