The ITKO Blog: Service Virtualization and Application Lifecycle Optimization - CA Technologies

iTKO News: Record Results for 2010

Here's a break in our editorial technology discussion for an official news wire from iTKO Corporate:

iTKO Completes 2010 with Record Growth and Profitability

DALLAS, TX, January 26, 2011 (Business Wire) -- iTKO, the leading provider of virtualization, test, and validation solutions for composite and cloud-based applications, today announced record results for calendar year 2010. iTKO delivered calendar year results of 109% year-over-year revenue growth and 39% after tax profit margin, while increasing its cash position by 149%. The company added a significant number of Global 2000 enterprise customers in 2010 and saw a sharp increase in the number of seven-figure enterprise license contracts. Using iTKO's LISA solutions, customers can rapidly deploy virtual service environments, cloud labs and continuous automated testing to eliminate constraints, improve performance and drastically reduce time and costs for complex enterprise applications. The company finished the second half of 2010 with a revenue run rate increase of over 150%.

Indeed, 2010 was an interesting growth year for iTKO, and while we are very happy about our financial results above, and expanding our business into new regions, we also think we are seeing bigger market forces at work here that are helping us along.

Fundamentally, we are seeing a huge shift appearing among large enterprises that rely on IT for a large portion of their business toward genuinely embracing distributed integration approaches: employing both rich UIs and services, atop messaging frameworks and platforms, and leveraging third party SaaS and Cloud-based services to do a lot of the back-end work.

All this has increased the flexibility and agility of software development, but it has at the same time drastically increased the volatility and risk of costly failures in production. Companies that do not address these IT risks with methods and tools up to the task of today's complex architectures will fail in front of customers.

Why was 2010 a tipping point for many of these enterprises? A tougher economy created tougher competition - so getting to market with new functionality and higher performance became critical to capturing and retaining customers. And continuing to "patch over" all those integration issues by throwing more testers and developers at the problem eventually became impossible - there are just too many potential problems to continue to catch and repair manually in today's complex architectures. Too many constraints and changes in the environment that bog down the efforts of multiple teams and business partners, all trying to work in sync on their own piece of an extended application.

Whatever the root causes, we are thankful for each new and returning customer who believed in iTKO's vision, and helped us realize our goals this year. We are committed to your continued success in reshaping application development - so you can get to market faster, with richer functionality and higher performance, at lower cost and risk.

Virtualization or Cloud? Both or Neither? Why or Why Not?

Recently commented on eBizQ's Forums about a question that on first read seemed rather silly: Is it better to use Virtualization for some business apps rather than the Cloud? Here's what I said about it:

"It's hard to picture how it is better to use one than then other, when both could be perfectly applicable. I would expect virtualization to be a commonly accepted precursor to leveraging cloud-based environments for applications."

The discussion here, especially in posts by Ian and Lori, does a great job of making sure we aren't lulled into thinking of Virtualization and Cloud as either/or propositions. You are talking about two totally different things. But let's play devil's advocate and discuss how they are not very different.

1. Near-Ubiquity. Virtualization, as in hardware/desktop VMs and system images, is now par for the course. And we expect Cloud Computing as defined here to also become a major part of every enterprise IT strategy - in fact, we think it truly arrived this year. Therefore, both are present in most major IT shops already.

2. Complimentary Value Proposition. Obviously, you have compelling reasons to do both - I like Satoru's quip on "selfishly" utilizing several different Virtual images on an Amazon EC2 Cloud environment - perfect for quickly launching or freezing several different versions of his software lab depending on their reliability or versioning needs. To an extent, you can use both for similar value reasons: cost efficiency, more optimal use of computing resources (and/or capacity), system flexibility or elasticity... again, different things but similar value props.

3. Constrained by External Factors. Lastly we have discovered that Virtualization and Cloud are most similar in what they CAN'T optimize conventionally. Almost the same behavioral rules apply here - if it's a system or server you have access to and control over, it is easy to image as a VM, and also logical and cost-effective to deploy it in a Cloud. If you are dealing with an Over-Utilized (high traffic and size) system, or one that is Out-of-Scope (external to your dept. or a major service outside your company's authority), BOTH hardware virtualization and Cloud quickly become ineffective or constrained. Here's what I commented on that:

"There will still be some over-utilized business app resources that are also resistant to both - it doesn't make sense to try to replicate a 2TB mainframe as a VM, or stick it in a public cloud..."

A solution to the above constraints for both, is a technology we call Service Virtualization - this is now a very mature solution space and something we've been discussing for more than 3 years  here, since we introduced LISA Virtualize product features. Virtual Services provide a companion to VMs, and simulate the behavior and performance of those Out-of-Scope items, so when and if you do deploy both in a Cloud, you truly get an elastic, constraintless environment for software development and testing purposes.

iTKO's 3 IT Predictions for 2011, and How 2010 Played Out...

Another year of accelerating change in IT has swept by, and as we clear out our inventory of leftover holiday cookies and cakes, we also like to collect some of our predictions for the upcoming year, while seeing how this past year went in retrospective. (Please note, these are in no particular order, and they are just the opinions of some iTKO execs we collected by passing the hat for thoughts - use at your own risk!)

Predictions for 2011: Are we entering a "Nirvana Age" for software development? We are starting to think so - more on this concept later, but here are 3 trends we predict for the coming year:

1. An Agile Resurgence is happening. Companies are increasing their commitment to Agile methodologies - but the big difference this time is that we're not talking about a few development teams adopting XP/Scrum etc. - Agile Resurgence will be the mandate Agility across the overall IT and software development lifecycle, so you will see it cover an entire delivery organization. Companies will measure their overall success in meeting customer requirements in terms of improved Agility - speed and efficiency across design, development, testing, support and services as a whole.
2. Enterprise Cloud will take hold. By the end of the year, we expect serious enterprise Cloud adoption to accelerate rapidly beyond merely using it to improve infrastructure and hosting capacity. A whole new class of business process applications that leverage cloud will appear, along with new Platform as a Service (PaaS) capabilities that make cloud an environment for collaboration and software development itself. We've been talking about DevTest Cloud for most of 2010, and we are seeing major enterprises take it as a part of establishing their enterprise-wide cloud initiatives.
3. Shakeout in Testing space is still not done: We have seen that many companies have delayed or deferred replacing their existing UI-based testing and load testing tools and focused mostly on development tools with testing as an afterthought. That is going to change bigtime, as companies can no longer afford to have exponentially increased test labor costs, and risk of failure accelerating faster than software can be delivered. Customers will demand both deeper testing coverage across complex multi-tier apps, as well as new Cloud- and service-based delivery models for testing that can offer more flexibility and labor efficiency.

Retrospectives for 2010: Did we call it? Well, this time last year we were busy releasing LISA 5 Suite, so we didn't stop to make 2010 predictions we can grade ourselves against. But here's some observations we couldn't help but make.

1. The Cloud took off like we thought it would. We're not a market research firm, but we couldn't help but notice an explosion in Cloud strategy and implementation. In our own customer base, the number of inquiries and interest of "how do I move to Cloud?" and "Should I use a Private Cloud?" increased by 3-5X over just the last 6 months. We sponsored a couple Cloud-related events and webinars, and found a huge increase in both attendance and sophisication of this audience.
   
   
2. Service Virtualization became a line item on the IT budgets of market leaders. We saw an increasing number of project requirements and RFPs here and in Europe specifically calling for more than just "stubbing" of responders for testing and development. 2010 was a breakthrough year for the concept of virtual services: the simulation of behavior, performance and data characteristics of systems that are constrained or unavailable throughout the development lifecycle, and customers want to know how to resolve these big constraints to delivering software. A big part of this awareness was assisted by our partnerships with HP and IBM, allowing customers of their testing and ALM product suites to simulate constraints in their environments with capabilities from iTKO's LISA Virtualize.
3. A weak economy did NOT take any pressure off IT to deliver more functionality, faster, maybe it was even worse due to it... While companies likely spend 2-3x the time scrutinizing their budgetary plans for IT, and hiring was usually frozen, companies could not afford to slow down one bit. Increased competition for customer dollars, rapid consolidation and acquisition in many markets, and more regulation all created big IT projects, often without a commensurate increase in budgets or resources.
4. VMWare successfully defended its near monopoly on large enterprise IT virtualization; it was predicted by many they would fail (not us!) thanks to competitive or open-source pressures.
    
   
5. SOA Governance fell flat.  This was definitely last year's fruitcake, regifted. It still seems like such a great idea - the runtime part of governance enables companies to do some cool stuff which kept some of the players afloat, but we didn't hear many inquiries about SOA Gov all year long.