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eG Innovations continues building a bridge to intelligent performance monitoring

Business is starting to take off for eG Innovations as the company extends and expands its IT performance monitoring capabilities beyond virtualization. This expansion is not only driving new growth and increasing eGI's upselling capacity, it's helping to insulate the company from future changes in the marketplace that could work against it. Longer sales cycles are the main negative consequence.

The 451 Take

Growth has been on the agenda for eG Innovations, which has more than doubled its customer count in the past two years. With an expanding product set, this creates plenty of land-and-expand opportunity for the company. Virtualization remains at the center of eGI's management universe, but its move into code-level APM is intriguing, and should open some new opportunities and markets to the firm. EGI continues to innovate as it always has, but now its business results are starting to match the potential we've long thought it had.


EG Innovations continues to chart an independent course. The Singapore-based company hasn't raised outside funding since its 2001 founding and has no current plans to do so. Founder Srinivas Ramanathan continues to lead eGI as president and CEO.

Since our last report on eGI, Matt Wrabley has joined the company as VP of business development. Wrabley has held similar positions for more than 20 years at various software companies, including Stratus Technologies, Marathon Technologies (which Stratus acquired), Virtual Iron Software, Neoware and CIDCO. Wrabley is seeking to build out eGI's sales channels, including OEM and ISV partnerships.

The company has more than 150 employees. It had about 130 in 2013 and just 90 in 2010. It had its best quarter yet in Q4 of 2014 and claims profitability for nine straight years.


The eG Enterprise offering remains eGI's flagship, providing a broad suite of IT performance monitoring and analytics software. The company continues to expand the list of application infrastructure it can monitor, with support for Oracle Linux and Oracle VM monitoring the most recent additions.

The latest full product release is eG Enterprise 6. New features include aggregated 'one-view' dashboards of all the metrics eG Enterprise collects; an improved user interface; a mobile app for iOS and Android devices; AnyCloud technology for monitoring cloud environments and service levels; and a VDI console that allows users to run basic performance diagnostics to detect and remediate virtual desktop performance issues without helpdesk intervention.

Virtual desktop and server monitoring, still the core of what eGI does, has been enhanced to support virtual server monitoring using the Linux KVM hypervisor. Browser monitoring has been added to eG Enterprise's virtual desktop and application virtualization monitoring capabilities. The company has also added deeper visibility into user login issues in this release.

While eGI's strength remains around virtual server and desktop performance monitoring, the company continues to pursue and execute on its 'unified monitoring' vision, covering applications as well as all levels of infrastructure. EG Enterprise can monitor Java and .NET application environments down to the code level, along with application containers and Java Virtual Machines, and it is seeing increasing customer demand for these capabilities. EG Enterprise also supports cross-tier monitoring of SAP application environments.

All eGI software supports auto-baselining of desired service levels and anomaly detection of when service levels begin to deviate from that performance baseline. This is the basis for the company's 'intelligent performance management' tagline. The software is offered via perpetual license, annual subscription and cloud-hosted models, and is priced by server, named user or concurrent user, whichever works best for the customer.


eG Innovations claims about 1,000 customers globally, indicating significant growth for the company, which had less than 500 customers two years ago and only about 180 when we initiated coverage on the firm in 2010. About 40% of eGI's business is from outside the US. It is mostly selling into the midsized enterprise market, with customers typically supporting somewhere between 500 and 2,000 internal users. These companies typically have less than $100m in annual revenue, 1,000-10,000 employees and 100-1,000 servers to monitor. Deal sizes range between $25,000 and $75,000, but can go up to the $200-300,000 range as customers expand their use of eG Enterprise.

Citrix monitoring, especially XenApp, continues to drive eGI's business, with 65-70% of customers using the software to monitor those virtual server environments. Citrix XenDesktop monitoring, though not as widely deployed as XenApp monitoring, still accounts for about 90% of eGI's VDI monitoring business.

Meanwhile, APM is driving new business for eGI in the Asia-Pacific region and accounts for about 10% of the business overall. Unified monitoring deals - where the customer is monitoring multiple, but not necessarily all, infrastructure tiers - account for about 40% of eGI's business. Sales cycles are much longer for unified monitoring deals, however, often taking up to 12 months for a deal to close.


eGI is looking to expand its partnership activities. It has a global systems integrator agreement with CSC, which continues to pay dividends for the company, as well as a network of regional resellers and SIs around the world.

Stratus Technologies, which develops high-availability and fault-tolerance software, is making eG Enterprise available to its customers for unified monitoring as part of an OEM agreement. Wrabley came to eGI from Stratus, and is looking to strike similar deals with other vendors.


eGI competes with various vendors, depending on what it's monitoring. In Citrix virtualization and VDI monitoring, still the core of its business, the competition mainly comes from Lakeside Software, ComTrade and Liquidware Labs. Xangati is also strong in this space for both virtual infrastructure and Citrix and VMware VDI environments. VMTurbo can monitor for performance of virtual infrastructure, but it's focused more on workload orchestration and management.

eGI can monitor VMware environments, but VMware has cornered that market with its own strong monitoring tools. Citrix has its own monitoring tools as well, like Director and EdgeSight, but eGI still wins business in managing Citrix environments within the context of managing other infrastructure layers.

In APM, eGI is taking on New Relic and AppDynamics in Java and .NET environments. dynaTrace and AppNeta are also strong competitors here. With a focus on APM in virtualized environments, eGI competes with BlueStripe Software, at least for mindshare. In SAP application monitoring, Aternity and Knoa are the strongest competitors for eGI.

In broad IT infrastructure monitoring and management, eG Innovations sees Microsoft Systems Center Operations Manager, SolarWinds and LogicMonitor, with Splunk the chief competitor around IT performance analytics. Other vendors we're tracking in this space include Kaseya, Idera, CA Nimsoft, ScienceLogic, Ipswitch, AccelOps, Zabbix, Zenoss and GroundWork. If eG Innovations is competing against Splunk in performance analytics, it's likely seeing other performance-management-oriented log analyzers like SumoLogic, Loggly and Logentries, as well as anomaly detectors like Netuitive and Prelert.

SWOT Analysis

eG Innovations is an established company with a strong technology team. It has grown its business significantly in the past few years while maintaining profitability.
Expanding its technology capabilities and deal scopes can lead to longer sales cycles and potentially a loss of focus.
APM is still a nascent space where eGI can be a compelling alternative to other products in the market, particularly for the midsized enterprise. OEM relationships and other channel activities could open some new revenue streams for eGI.
Much of eGI's business still revolves around Citrix. Should Citrix buy a competitor, as VMware has done, it can shut down that revenue stream for eGI. Of course, Citrix could also buy eGI and do the same to other competitors.
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- Dennis Callaghan

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