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State of the ITSM Market, Release 9

State of the ITSM Market Release 11 is the latest. You can access that here


State of the IT Service Management Market (SITSM), Release 9

Lee Cullom, President of Northcraft Analytics (Research sponsored by ITSM University)

The most organically googled ITSM research on the planet.

What’s new?

> ServiceNow Releases Calgary, BMC Releases Remedy ITSM 8.1, HP Service Manager stays put with 9.31, BMC Remedyforce Summer (August 2013), HP ServiceAnywhere (March 2013), CA still going with Service Desk Manager 12.7

> CA Brings in New CEO (Mike Gregoire), see his interview in the CA Section below. Honestly, he seems like a refreshing hire by the lumbering giant –

> Knowledge13 Update – In his keynote address to the ServiceNow faithful, CEO Frank Slootman, covered the challenges facing IT executives in the face of a changing IT landscape. “Changing IT is far easier than changing behavior,” said Slootman. By this he is talking about the need for IT to change its focus from technology to service. On a personal note, having 7 children, I can attest to this fact.

> ServiceNow CEO Frank Slootman says, “We have No Real Competitors” -

> ServiceNow acquires Mirror42 –

> BMC Goes Private (almost) –

> Market Share Predictions, EoY 2013 – #1 BMC, #2 ServiceNow, #3 HP, #4 CA, #5 Cherwell

> ITSM Financial Review – ServiceNow Financials (July 31st, 2013) revenue up 80% still operating at an intentional loss, Cherwell $25M in VC Funding (Private), BMC license revenue down, maintenance up (August 8th, 2013), HP (June 6th, 2013) Software group down 3%

> Deal Makers & Deal Breakers – A new facet of State of the ITSM Market. These are basically the product differentiators for the big 5. Look out for this in the company-specific information below.

Market Insights

> Insight behind the financials – ServiceNow intentionally runs at a loss for the time being, BMC is going private to hide the pain of transitioning to the SaaS model, HP doesn’t have that luxury so they must go through the transition for all to see and CA is slowing down the least quickly of all the big vendors. Bottom line, BMC and CA are best positioned financially to weather this transitional SaaS phase of the market. It’s entirely possible that HP might not have the stomach for it because their Software business is such a small fraction of their business. IBM is currently a mystery. They’ve changed direction in the past on IBM when they dropped Tivoli in 1999 by selling it off to Peregrine – remember that?

> Pricing – Customers are currently enjoying the benefit of transparency of SaaS pricing. However, we have seen the first signs that there might be a few changes to this glasnost. ServiceNow is now beginning to charge for approvers, self-service users outside of a certain ratio and some other interesting nuances. Of course, Run Book Automation and Discovery technologies run outside of the scope of State of the ITSM market to some extent, but be careful to seek assistance from an unbiased 3rd party (like us!) when covering license models and pricing. On premise pricing is also outside of the scope of this document due to length, but we’re happy to help with consulting in that arena as well.

> Basically, we’re seeing list prices currently here: HP, $50/user/month, BMC Remedyforce - $79/User/Month, SNOW – $99/user/month, BMC RoD offers concurrent and named, starting at $99/user/month

> ServiceNow Acquires Mirror42 for an undisclosed sum – Point solution, pure and simple. There is no connecting Mirror42 to your ACD system, IT Operations Monitoring, Project and Portfolio Management application (no, not the ServiceNow module, the application you actually use to manage your project portfolio) – without serious Business Intelligence development on a proprietary BI platform. This acquisition will get ServiceNow 100-200 customers, just as BMC did with Dashboards and Analytics.

> However, BMC has one slight advantage here in that most enterprise IT departments already have a standard for Business Intelligence. That standard is already being used to connect to both on premise and SaaS data sources. And, Business Objects has the largest market share currently of the BI platforms (although Microsoft looks poised to win long-term with the SQL Server BI Stack (on premise) and Power BI (Azure).

> However, in the final analysis, this was a good move, in that ServiceNow was lacking capability in reporting (per the Gartner ITSSM Magic Quadrant in 2012). In general, however, the BI market is a phenomenon in itself that even the mighty has wisely ignored.

> Slootman, No Competition – Those are some big words! But hey, you’re the CEO, you’ve gotta be bold or get out of the market. Of course, we would argue that ServiceNow has Remedyforce (500 customers now) as a competitor on one end of the market and BMC Remedy on Demand (100+ enterprise class) on the other. Not to mention that ServiceNow still lags HP Service Manager and BMC Remedy in terms of market share. To be clear there are almost 1,800 ServiceNow customers vs. around 8,500+ total BMC customers with 1,200+ BMC Remedy accounts in the United States alone. SaaS is an important phenomenon, but it doesn’t mean the end of on premise any more than the PC didn’t end the mainframe. But, SaaS is here to stay, and that’s a great thing for IT professionals in general.

Long-term, in SaaS opportunities, we believe it’s Remedyforce (on vs. ServiceNow. However, it’s always important to keep in mind that SaaS is leasing which is more expensive for companies long-term. Now, I realize as I say this that I use, and QuickBooks on-line. That being said, my core business at Northcraft Analytics is developing the best suite of business intelligence applications on the planet and keeping our customers delighted. In other words, if it were practical to save money by going on premise, I/we would do it in a heartbeat. So, for large organizations, it’s going to boil down to a discussion of what is core vs. non-core (and already is, I’m hearing that quite a bit).

So, in my opinion, there is ultimately a hard limit on the number of customers that will go SaaS. Still, to Slootman’s point, ServiceNow is rocking and rolling. And, to be fair, if an enterprise IT department is looking for serious IT automation capabilities in a SaaS solution, they’re not going to go with Remedyforce at the moment unless they already have a investment.

> PaaS (Platform as a Service) – In future research, we’re going to be dedicating a section to Platform as a Service for ServiceNow, Remedyforce and BMC Remedy on Demand. Keep an eye out for it!

Company-Specific News, Ordered by Market Share:

BMC Software

Deal Makers – Breadth of Configuration Options, Ease of Customization, ADDM + Atrium CMDB, New Customer Pricing, Implementation Community

Deal Breakers – Customer Support, Existing Customer Pricing, Lack of ITSM sales specialists, poorly defined transition plans for its Service Desk Express Suite which has been sunset, Possible Brain-drain due to staff and expense cutting associated with Privatization. Interestingly, there are still 800+ Service Desk Express customers out there that need to make a move to something by 2015!


o Remedy ITSM 8.1 in February, 2013 – What’s new? This applies to on premise and on- demand customers who opt-in to the upgrade.

* Improved Change Calendar

* Email-based approvals – Playing catch-up here, but this is a critical one.

* Usability – BMC has been focusing on usability since 7.5. In fact, they should never stop. Nor should any vendor for that matter. Word has it that the next big move for Remedy will be HTML5/Java. This makes sense because MyIT is really just a stop-gap measure until Service Request Management can play nice on mobile devices. You can’t have an iPad only solution that doesn’t sit on the same architecture as the Request Management platform. In fact, for true mobile capabilities that are cross-platform, it’s probably best to just go ahead and recommend that customers look at technology from Mobile Reach.

* Simplified install – We’ve tested this in our labs, it’s a major enhancement. Of course, this only matters for on premise customers in this day and age.

* Atrium Single Sign on – BMC has had LDAP synchronization for a long time, so this is a welcome improvement because users don’t want to put their password in over and over again. That’s the core requirement – usability people!

o BMC Remedy on Demand – First of all, this is the Remedy AR System architecture, not There is still quite a bit of confusion in the market out there around this topic. This offering has been more successful than many have thought in terms of sales performance (> 100 enterprise IT customers).

> However, the on-going concern has been the BMC Change Advisory Board (CAB) that must approve each customization to the environment. This is such an interesting situation (for me, at least). BMC created the CAB to ensure that customizations are easily migrated during upgrades (good idea!), but it takes longer (for the developer)… Interesting conundrum.

> With ServiceNow on the other hand, the danger is that you customize an Out of the Box Script Include, which has the potential to harm your upgrade path. So you have speed of customization, but potential upgrade problems: source:

> This was the original complaint about Remedy! Ironic? Coincidental? Neither?

> Bottom line: in ServiceNow, you write the JavaScript yourself. In Remedy, Boolean logic writes it for you. If you want your customizations to migrate, use the GUI to create an overlay.

o What’s new with BMC Remedyforce Summer?

* Surveys – Remedyforce now has a simple survey capability. Out of the Box it sends a survey to every single person in the whole world who opens up an Incident… or service request. If you want to modify it, that’s a customization… so crack out the Apex.

* ADDM (Atrium Discovery and Dependency Mapping) Integration – this now supports IPv6. As an aside, ADDM is one of the best products that BMC has to offer. This was a very good acquisition. We give BMC a lot of guff for poor customer support (deservedly), but they do have an excellent product here that doesn’t require much support.

* Incident – Notifications when linked tasks are closed (this actually extends to other processes as well).

* Email Conversation – There is still quite a bit of work to be done here… because you really shouldn’t need to break out the Apex scripting code for bi-directional email. Of course, as I say that, you will see that the conversation feature was just added in BMC Remedy ITSM 8.1 (see above). Interestingly enough, CA Service Desk Manager has the simplest HTML-formatted email conversation management. Anyway, at least there is no need to work with multiple Apex classes anymore.

* Administration – Keep an eye out for request definitions and template management on the Remedyforce administration tab. As you can see, BMC is slowly moving more functionality towards data-driven configuration. That has always been an area of superiority for many of BMC’s ITSM products (particularly Remedy, but also Service Desk Express and Remedyforce). We have consistently found this to be the most overlooked area associated with administrative costs.

* Self-Service – Self-service password reset, viewing the due date (associated with an SLA), quick links and the ability to create incidents from broadcasts are some of the interesting “new” features. It’s hard to use the word “new” in earnest. There are so few new ideas in ITSM these days! But, maybe that’s a good thing… ITSM doesn’t need to be rocket science. Most importantly though, self- service now works on Droid devices! Smart move… I believe Droid may have 60%+ of the smartphone market at this point.

* Templates – For tasks, incidents and changes, you can now create recurring templates… with schedules… unless you are using the Visualforce page layout. Also… CI and Service are available for use in Templates. Not to split hairs, but a service is a CI, just a logical one. In any case, they’re both available.

o Remedyforce is the fastest growing product line in BMC’s portfolio with over 500 customers. While 95% of the customer base is in the SMB (Small-Medium Business) space, we believe that this offering will become a primary focal point of development efforts alongside Remedy. Our belief is that BMC Remedy will remain the flagship on premise offering in the market and Remedyforce will be BMC’s primary SaaS offering long-term. Remedy is still a vastly superior product functionality and architecture-wise when compared to Remedyforce, but is a development platform that is good enough for simple requirements. Plus, their SaaS operations are a competitive differentiator (world-class). As an FYI… we don’t believe Track.IT and Footprints will go EOL either, but the reason those products have remained viable is due to price/functionality ratio, not architecture, customizability or total cost of ownership (as is widely believed for some reason). Again, the focus of SITSM is enterprise ITSM.

> For information on Remedyforce 2 and 3, see the previous releases of State of the ITSM Market.


Deal Makers – Change and Configuration Management, Integration to IT Operations Technology, Depth of Functionality

Deal Breakers – Service Catalog Offering, Pricing (on premise), Complexity of Customization, Lack of common architecture for ITSM (uCMDB, Service Catalog, HP Service Manager, HP Asset Manager and PPM), A comparatively few SaaS implementations – about 20 clients.

o What’s new in HP Service Manager 9.31?

* Updated Self-Service Portal – avoid the HP SM Service Catalog at all costs. I’m sorry to beat them up, it’s just not worth a closer look. If you’re on HP, check out a best of breed service catalog, such as PMG –

* Collaboration – in-context chat for Incidents, Changes and integration with MS Lync – This is a wise recognition of where enterprise chat is headed. Lync is slowly taking over.

* Enhanced uCMDB integration – Basically added federation for the uCMDB browser, it’s not the same database like BMC Atrium or ServiceNow, and so that’s highly un-interesting news.

* BSM Integrated downtime management – HP is playing up their strengths in IT operations. Of the $970+ million that HP sells in software, 80% is Orchestration, Monitoring and PPM.

o See this link for a quick preview –

o HP Mobility for 9.3 – – Demonstration of the latest mobile offering for Service Management.

o – HP Service Anywhere is HP’s new SaaS offering. It is still based on the HP SM architecture, but the functionality has been reduced in scope and there are more configuration options to allow customers to avoid some of the pitfalls traditionally associated with customization. We’re not sold on those arguments entirely, but it is an on-going discussion in the ITSM community that has been heated for years.

o Gets serious about SaaS for ITSM, gains flexibility in pricing model and establishes the most partner-friendly model on the market. HP has also addressed on-going interface issues and continues to have the most robust CMDB offering on the market. We believe that HP is growing its share of the ITSM market in 2012 based on field activity & reports.

o For more information on what’s new with HP SM 9.3, please see here:




Deal Makers – Rapid Customization, Breadth of Application Suite, Customer Support, Common Architecture, Popular Scripting Language, and Strong Momentum in the ITSM market.

Deal Breakers – Customizing an OOB Script Include, Depth of Functionality, Pricing (post-IPO), Consulting Expertise Variance (Popular Scripting Language)

> *What’s new in ServiceNow Calgary (Jun. 26th 2013 release date)?

> First, a nomenclature issue to ensure apples to apples comparison can be made amongst the different vendors. ServiceNow has a category in their “what’s new” section called applications. While that’s technically true based on how the platform works, other vendors refer to them as modules (or applications depending on the functionality). So, for example – Contract Management is a module within the BMC Remedy Asset Management application that’s included within the ITSM Suite. In ServiceNow it is referred to as an application, but it’s not really stand-alone because it ties into ServiceNow Asset Management. Financial Management is another application (again, technically that is true based on the architecture) that “includes support for depreciation of hardware assets”. For BMC, this functionality module would be found in the Asset Management application, however CA and HP do have separate applications with this functionality module (CA ITAM and HP AM), so an apples to apples comparison is tricky to define. In any case, that’s a lengthy way of saying that we’ll make distinctions here to make sure you know what’s included.


* ITSM Applications & Modules

o Data Certification (IT GRC) – This is an interesting feature in that certification is not the same as reconciliation. It’s a module that works in conjunction with CMDB and IT GRC to validate the data integrity of Configuration Items once discovered. Many people in IT have learned how expensive asset audits can be, so data certification is a module that assists the process. On the process side of things, we’ve recommended a RACI approach for CI Categories/Classes for a long period of time, so it’s good to see a recognition of this concept within the technology side of things.

o Procurement – The need for this module becomes quickly apparent when you have a fully deployed Service Catalog, so kudos to SNOW here for catching up with BMC in this arena by releasing a module. HP’s procurement module within HP Asset Manager is the most widely deployed ITAM procurement module in the world, so the Luddys probably know something about how to architect this module (having come from Peregrine). The interesting thing for ERPIT solution providers for many years around this category of software is that most times these IT procurement module deployments are hampered/blocked from the existing procurement solutions that most large IT organizations already have and reply upon. Since ServiceNow has many customers in the SMB space, we’ll see if there can be some additional traction gained here by including this functionality.

o Contract Management (Asset Management) – there were some badly needed features added in this release, such as relating assets to contracts. You really can’t call your module contract management without this feature!

o Work Management – I like where SNOW is going with this one. This is for customers who need a full module that handles non-IT work essentially. BMC Remedy uses work orders for this, but it’s behind in some areas…and ahead in others. For example, SNOW has inventory management and transfer orders. Within Remedy, that’s only a part of IT Asset Management (and there is no transfer order for equipment). On the other hand, ServiceNow claims “skills” routing. However, using Category to drive assignment doesn’t quite get you there. A tier 1 category like “hardware” (used in the example) is a bit lacking. Also, I personally would prefer that no one goes down this path, because skills-based routing requires too much administration to be successful. Remember Wishbone?

o Product Catalog – nice module that is a necessary complement to a DML initiative.

o Depreciation (Asset Management) – Meh, I seriously doubt that companies will trust the IT system for this function. There’s too much complexity with Straight Line, Declining Balance, DDB, ever-changing tax-rules, etc… Waste of coding time here.

o SDLC – The only question here is… will ServiceNow compete with JIRA? I’m interested to see where they go with this application. Still too early to tell.

o Project Management – How many customers are going to replace Clarity, HP PPM, Microsoft EPM, etc… with ServiceNow? I don’t know, but I like the approach to move customers to one platform.

* Administration & Architecture

o New iPad interface – nice move, this is a big one. Again, for best of breed multi- platform mobile, we recommend Mobile Reach. That goes for all of the top 5 platforms

- CA, HP, BMC, SNOW and Frontrange. The only difference is if you have Remedyforce (built on offers native iPhone, iPad and Droid now. Note the inevitable conflict brewing between and

o Context-Sensitive Help – ServiceNow has the best customer support of all of the ITSM players. They don’t forget the little things, like this.

o App Creator – We’ve got a name for this in the software world… its called demo-ware.

However, it’s just v1 on the app creator. Maybe one day it will provide additional development productivity. It’s a nice first step towards something like the BMC Remedy AR System Development studio. Or HP’s eclipse-based environment… CA’s Service Desk Manager Product isn’t meant for customization. Don’t even go there… unless you want me to launch into a tirade on htmPl and majik (these acronyms even confused my spell- checker, heh).

o The rest of the features really aren’t worth mentioning. You can have a look yourself if needed –

- Anyone who successfully disagrees with the above statement gets a free kindle.

* IT Operations (Automation)

o Hyper-V Discovery – We’ve seen Microsoft do very well in the QA and Development environments of large IT shops due to their favorable pricing. This feature attests to that fact.

o DiscoverNow – That is an awesome marketing term for a feature. Not really much new here in terms of a competitive differentiator, but nice name!

o 5 New Run Book Activities – ServiceNow must execute against some very tough competition here in this space, so we’ll be following this product closely. Basically, it looks like they’ve covered the basics in RBA.

o We believe that ServiceNow will begin to strictly enforce license usage after going public in a bid to increase profitability and growth at some point, because Wall Street, shareholders and boards are so unforgiving. **Update on this comment above. We’re thinking that SNOW has moved somewhat in this direction with approval licenses and the self-service ratios (100:1). More to come on this topic in future releases.


CA Technologies

Deal Makers – Self-Service functionality, Pricing, Sales Team

Deal Breakers – Customizability, Upgradability, Interface, Architecture, Implementation Community

o CA continues to have strong software financials, but not specific to ITSM, so this does open up questions about R&D commitment.

o CA Service Desk Manager 12.7 remains the current release. We’re going to leave this one alone until CA gives us something to write about. The strongest feature of CA’s suite continues to be the file-level change detection that is part of their CMDB. Have a look at that feature, it’s actually very helpful for detecting unplanned changes.

o Although CA remains 4th in the ITSM market, we just haven’t heard much from customers who are excited about the CA direction. This still remains the case as of Release 9. We speak with about 10% of the total U.S. ITSM market on an annual basis, but nothing on CA this year as of yet. Furthermore, all of the buzz at the conferences is around Remedyforce and ServiceNow.

o – Company product demonstrations can be found here. The product is great for IT Operations, but not yet a player in ITSM.

o Struggling in ITSM Market. Even though the most recent Gartner numbers show growth (2010 actuals), the revenue numbers contained an outlier deal with the US Federal government that hides a major decline in ITSM.


> No updates for Frontrange again this time. In fact, we saw Heat replaced by BMC twice in the past quarter. Where are the customers? Why don’t we offer this… if anyone has become a new Frontrange ITSM customer in the past 12 months, please email us at [email protected] and we’ll give you a Kindle Fire HD. We have some left over from our conference giveaways!

> We believe that Cherwell will replace Frontrange for the #5 slot within the next 12-18 months. So, please look for new information regarding Cherwell in upcoming releases of SITSM!

> Frontrange has re-branded and re-architected (Heat Service Management is on premise and Heat Cloud is SaaS). They’ve decided to stick with the more popular HEAT (and added in CLOUD to indicate the new architecture and SaaS offering) name which is a good idea. It’s hard to get unbiased information on the new offering at this point, so we’re biding our time and doing further research.

> We expect to cover HEAT CLOUD in the next release, but we need to find some customers to speak with… if you’re interested please contact us through the website, we’ll be happy to give you an hour of free consulting on the ITSM topic of our choice!

**Update** – We’ve had no response to this request for customers. That is unusual given the size of our audience.


Overall State of the Market

BMC is #1 in the market with @40% market share (Remedy is about 23% of that), HP Service Manager is

#2 at a little under 16%, Service-Now is #4 at @9% (see financial statements for subscription revenues), CA is #4 at a little less than 7%, and Frontrange is #5 at @ 4% (but most of this market share is legacy Heat).

In terms of our own ranking system, we use these criteria: Interface, Architecture, Functionality and Price (list pricing, because most vendors offer special discounts based on a wide range of criteria), Platform Integration, Innovation, Administration, Operations (for SaaS solutions only).


** One recommendation (and disclaimer) before we list the rankings. We highly recommend that as a customer you go into depth on each module (Incident, Change, CMDB, Release, etc…, because the devil is definitely in the details). For example, you could argue that Incident Management is a commodity application at this point, but CMDB definitely is not (in terms of functionality and architecture).


Ratings (1 is Lowest, 5 is Highest, ordered by market share):


* BMC Remedy ITSM 8.1 is latest – Functionality 5, Architecture 4 (Ask us about HTML5/Java), Pricing (Blue/SaaS) 4, Interface 4, Sales Team 2, Implementation Community 5, Platform Integration 4, Innovation 3 (downgraded due to MyIT), Administration 4 (data-driven), Operations 4 (recent improvement), Market Share #1 (Includes all BMC products, but Remedy is still #1 when pulled out separately), Customer Support 2

* HP Service Manager 9.3 – Functionality 5, Architecture 3, Pricing 4, Interface 3.5, Sales Team 2, Implementation Community 4, Platform Integration 2, Innovation 3, Administration, 2, Operations, 4, Market Share #2, Customer Support 3

* Service-Now Calgary – Functionality 3, Architecture 3.5, Pricing 2 (post-IPO), Interface 3, Sales Team 4, Implementation Community 2, Platform Integration 5, Innovation 5 (upgraded), Administration 3, Operations, 4, Market Share #3, Customer Support 5

* CA Service Desk Manager 12.7 – Functionality 3, Architecture 1, Pricing 4, Interface 2, Sales Team 4, Implementation Community 2, Platform Integration 2, Innovation 1, Administration, 2, Market Share #4, Customer Support 3

* Frontrange ITSM 7 (not HEAT Cloud, soon to be replaced by Cherwell) – Functionality 3, Architecture 3, Pricing 5, Interface 3, Sales Team 2, Implementation Community 2, Platform Integration 3, Innovation 3, Administration, 3, Market Share #5 (Most of the market share actually comes from Heat), Customer Support 3.5


Additional remarks, thoughts and comments:

o ITRP – Adds some major wins in 2013 – a pan-European rollout for the world’s largest maker of heating, ventilation and air-conditioning systems, a deployment for the shared IT organization of a European federal government, a large implementation for one of the Big Four professional services firms, a Higher Education deal and more.

ITRP is the one to watch with the 1st legitimate out of box approach for ITSM.

o Cherwell – – With $25 Million in fresh capital and a delighted customer base, we expect to see Cherwell in the Top 5 net year.


o For customers who have already implemented HP SM and are looking for a best-of- breed Service Catalog that has native integration to HP SM, have a look at PMG –


o IBM TSRM remains largely a footnote in the ITSM market… in 6th place. Some major customers have chosen this product because they are IBM shops… and it made financial sense. IBM rarely wins on price/performance. From a purely technical standpoint though, IBM’s Maximo product architecture is in better shape than CA Service Desk Manager.

o Numara had annual revenues of about $75 Million before being acquired by BMC.

o HP executes well on strategic relationships with customers in order to win ITSM opportunities, much like IBM. Having the EDS services arm, relationships with Managed Service Providers, the ability to handle full IT Outsourcing and leverage hardware sales puts HP in a position of winning enterprise deals. So, it is unlikely to find HP in SMB deals in the ITSM market.

o Remedyforce is built on, therefore it is built on arguably the best SaaS application architecture available. So, it is a native SaaS architecture (NOT Remedy or Service Desk Express), opposed to popular opinion. Many ITSM buyers have confused this offering with BMC Remedy on Demand which still leverages the AR System architecture. Remedyforce is probably one of the most promising upcoming solutions in this market. Field activity indicates that demand is strong, but most definitely in the SMB. Enterprise deals remain the exception.

o ITRP is a new ITSM SaaS offering that is positioned as serious and packaged ITSM. They have purposefully taken the opposite approach as ICCM (for example) as an application that isn’t designed to be customized, but leverages best practices. The interface is truly excellent. So, for those customers looking for a packaged ITSM application with robust functionality, a superb user interface and a simple SaaS licensing model, ITRP is worth considering.




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