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eG Innovations leaves no performance stone unturned in latest release

With the latest release of its eG Enterprise flagship product, eG Innovations is positioning itself as more of a business transaction management (BTM) vendor, tracking transaction flows from back-end infrastructure to end-user experience and everything in between. Still, we don't see the company ceding much ground as a virtualization management specialist, which remains the bread and butter of its business. If anything, the new release will help eG win more business from existing customers and get in on more deals with prospects. The company has been growing well the past two years, more than doubling its customer base, and we expect the growth to continue, perhaps with larger deal sizes.

The 451 Take

Steady growth seems to be winning the day at eG Innovations. We've tracked the company with 180 customers in 2010 to 260 last year to more than 400 today. With its latest product release, eG clearly has its sights set on monitoring the entire IT environment, not just virtualization, and adding root cause analysis and predictive performance analytics on top of that. While that will take it into a hotly competitive space, this looks to be more of a land-and-expand play for the company to win more business from existing customers and sow the seeds for larger future deals from prospects. From what we've seen so far from eG, we expect that it will have some success. Continued steady growth and larger deal sizes are our predictions for the company.


Performance management of virtualized environments - both at the server and desktop level - has long been eG Innovations' differentiator and the company continues to exploit that niche in eG Enterprise 5.6, its latest release. However, this release also adds new capabilities that make eG Enterprise a broader performance management play, tracking application performance from back-end infrastructure to the end-user experience and across all transaction flows along the way.

In eG Enterprise 5.6, due to ship this month, the company is pushing its message of 'total performance visibility' across desktop, application, network, storage and virtualization tiers. New features include monitoring support for VMware vCloud Director and wider and deeper coverage of databases, storage, Active Directory and virtualization. The new version also features deeper visibility into Java transactions along with NetFlow monitoring.

End-to-end monitoring and visibility is one thing, but eG is also touting preemptive problem detection and alerting, delivered by improved predictive analytics and auto-base-lining capabilities. The latest version features packaged integration with Microsoft System Center Operations Manager (SCOM). Auto-discovery of service topologies supports automated virtualization-aware root cause diagnosis of performance problems and what IT services will be impacted by them. The company is also targeting cloud service providers, with root cause diagnosis extensions for cloud environments and personalized VM views for cloud providers using the managed services delivery model. Version 5.6 of eG Enterprise also targets capacity planning and right-sizing of IT environments with cluster capacity-planning reports, cumulation reports and various scalability enhancements.

The company claims that all of these enhancements will typically yield a 30% reduction in the number of severe performance incidents, a 35% reduction in downtime, a 20% improvement in hardware utilization rates, and a 15% reduction in IT support staff. EG Enterprise v.5.6 is priced by subscription, beginning at $50 per server per month in the US. On-premises perpetual licensing is also available.

All capabilities in eG Enterprise v.5.6 will eventually be made available to the company's eG Enterprise-On-Tap cloud service. The company has not provided any details on customer adoption of the cloud service beyond acknowledging that it was just a small part of total revenue. Enterprise-On-Tap is, however, helping eG get in on more deals, where customers can first see the capabilities of the cloud service and then bring those capabilities in-house.

With sales and support in the US and R&D in Chennai, India, eG Innovations has more than 400 customers and 130 employees. The company claims both steady growth and profitability and has no plans to raise additional outside funding.


As eG Innovations talks more about monitoring transaction flows across all tiers and deeper visibility at the application server layer, it's sounding a lot more like a BTM provider. Its closest competitor here would be BlueStripe Software, which has similarly staked out ground around BTM in heavily virtualized environments. OpTier, Correlsense, Precise Software Solutions, Compuware and Dell (via its recent acquisition of Quest Software) would also be key rivals here. ExtraHop Networks is tackling the same challenge more from the agentless network-monitoring perspective. AppDynamics and New Relic are positioned more at the application server level.

Seeing itself as more of a Big Four IT management framework vendor alternative, eG encounters BMC Software, CA Technologies, Hewlett-Packard and IBM on deals, along with Microsoft SCOM, which it is integrating with to provide management of non-Microsoft environments to customers that use SCOM in heterogeneous environments. It's worth noting that eG views management of Citrix environments - especially XenApp - and virtual desktop infrastructure as its sweet spot. So even where the above management tools are already in place, the company likely still finds a lot of opportunity for coexistence. While Citrix is building out its end-to-end management offerings across apps, desktops, networking and cloud, the company is also committed to working with partners. On the VDI management side, eGI's competition comes mostly from Lakeside Software and Liquidware Labs. VMware is also building out vCenter Operations Manager for View, based on its acquisition of Integrien two years ago.

SWOT Analysis

We've long been impressed with eG Innovations' notable technology pedigree, which traces its roots to HP Labs. With more than 400 customers, the company is gaining significant market traction as well and claims profitability. Offshore development helps keep overhead low.
Marketing has never been the company's strong suit. We think this is probably a pretty significant product release for eG, the culmination of development efforts that have been ongoing for a while. The latest version just isn't very catchy.

The company has already positioned itself pretty well around virtualization management, especially Citrix and VDI. Cloud service providers look to be a target in v.5.6. Its own cloud offering seems to be mostly serving as a test bed for prospects of eG's software.

VMware and Microsoft offer plenty of their own management tools that can be competitive with eG. If Citrix were to as well, it wouldn't kill eG but could slow its momentum and limit its growth opportunities. As the company positions itself for the back-end-to-front-end transaction management opportunity, it will face a lot more competition for at least mindshare.
- Dennis Callaghan & Karin Kelley

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