SevOne, an IT management company that uses peer-to-peer (P2P) technology to manage all elements of a customer’s IT infrastructure, has raised $150 million from Bain Capital to scale out its IT management offering and issue an IPO.
CEO Mike Phelan said the goal for the six-year-old company is to grow by putting a deep emphasis on expanding its customer base into the mid-market. SevOne has until now focused primarily on very large companies. It has customers that include Comcast and Thomson Reuters.
“We want to purse the public markets,” Phelan said. “We picked a partner that did that before.”
Bain Capital, started in 2004, is one of the world’s leading private investment firms with about $65 billion in assets under management.
SevOne, , based out of Wilmington, Del., uses P2P networking and big data clusters to help companies do real-time infrastructure management. The company offers its technology as a hardware or virtual appliance.
Performance management has become an important consideration for the CIO. There is more data and infrastructure to manage but vendor solutions are often specific to particular problems. Phelan said they are like islands, each separate from the other. It’s a common problem in the enterprise. Software stacks abound. Integration can be difficult at beat. In contrast, Phelan said SevOne’s P2P network consists of one common code base for all functionality of its offering through one common image. This allows for a universal approach to performance monitoring.
SevOne can monitor millions of objects in real-time across all networking technologies through a web interface. The P2P environment means the appliances are aware of each other when they go online. A company may have 15 appliances spread across its network in different geographic regions. This means it can show data and its behavior in different scenarios.
As data grows in volume, issues of scale are hitting the mid-market companies just as they have with large enterprise shops. Phelan said that as of this year, there are 7 billion elements across the market that need monitoring. By 2020, it will be 20 billion elements. Monitored elements can include but are not limited to: network interfaces, response-time measurements, CPUs and disk drives.
The challenge for SevOne is building its presence in the middle market. Mid-sized enterprises want more automated methods for interacting with vendors. Phelan said 90% of companies want to deal with an issue themselves instead of talking with someone. Large enterprise customers are more high touch. To reach the mid-market, SevOne has to build out a deeper inside sales team and make the product easier to consume. He said the company now has about 140 employees and will scale to several hundred by the end of the year. A lot of these hires will be sales people and developers to keep the product fresh and viable for middle market customers.
SevOne’s pricing will stay the same. SevOne charges $5 per element in an IT infrastructure environment. It analyzes the machine-generated data from the network environment. Customers get charged for the elements used.
Phelan said for the past five years Bain has expressed interest in SevOne. This year interest grew as customers increased the number of elements for SevOne to monitor. Its customer list has grown considerably, vaulting it to 75th fastest growing company in North America on Deloitte’s 2012 Technology Fast 500 rankings.
The push into the mid-market will put SevOne in deeper competition with CA, HP, IBM and other software giants such as EMC. Gartner estimates worldwide IT operations management (ITOM) software revenue totaled $18.3 billion in 2011, an increase of 8.7 percent from 2010.
Most of these software companies have developed solutions that encompass multiple appliances and a team of consultants to integrate it all. SevOne plugs in one box or a virtual appliance that takes 15-minutes to set up, instead of several weeks.
SevOne will have to build out a sales team to get into the mid-market before the software giants can block them out with similar products that are just enough to keep that existing customers happy. But the market has changed and these are lean times. Customers want something that works and does not require a team of consultants to fit it all together.