The IT service management (ITSM) software sector is one that has built its capabilities through consolidation. The variety of tasks and processes that come under the ITSM heading means that as the framework of best practice began to emerge around 2004, no single vendor had developed all the technologies required to support it.

But while acquisition activity is still ongoing, that does not mean companies are not developing their own technologies. Indeed the ITSM market is a hotbed of innovation, both on the part of the established market leaders and of new start-ups.

“The level of research and development and even venture capital investment in the IT management software space probably makes vendors in other software markets extremely jealous,” says Peter O’Neill a service management analyst at market watcher Forrester Research in a recent report.

As this Information Age/Numara Software survey has demonstrated, the ITIL guidelines are a key driver for ITSM adoption. Naturally, the release of the third version of these guidelines in late 2007 has proved to be an important driver for innovation on the part of the ITSM vendors.

For example, ITIL Version 3 advocates service lifecycle management, the process of establishing, maintaining and retiring IT services when

necessary. And not surprisingly, service lifecycle management tools now feature in many of the vendors’ repertoires.

But ITSM technology developments not only reflect trends in the service management ethos, but also trends in IT system design. On this front, the key engine of change for ITSM has been virtualisation.

Essentially, virtualisation and ITSM are a good fit. The ease with which IT administrators can now create virtual machines, unconstrained by the cost and time involved with deploying physical hardware, means that that virtual estates can quickly become chaotic and unmanageable. By establishing uniform processes and documentation, ITSM can inject some much needed discipline in a virtualised IT estate.

Additionally, virtualisation can help IT departments perform capacity management – planning the availability of computing resources around predicted peaks and troughs in user demand – in a more sophisticated fashion. For this reason, explains O’Neill, ‘everyone is riding the virtualisation bandwagon’.

Land of the giants

And such developments will help vendors in the ITSM tap into a demand curve that is clearly rising. According to Forrester’s research, the ‘IT management software’ market, a sector that includes business services management and some other related fields besides IT service management, will be worth $18 billion worldwide in 2008, up 19% from 2007.

And although the current economic uncertainty puts a question mark over all IT spending forecasts, ITSM – as a technology that helps organisations derive more value from their existing investments – may be better insulated from the squeeze than most.

That simply reinforces the requirement for vendors to provide high level of service and support for their products. “The realisation that IT management software has now moved from a tools business to one more akin to application solutions is forcing vendors to invest in their own professional services resources to ensure their customers’ success,” O’Neill explains.

Going forward, IT departments can therefore expect to see a large variety of service offerings – as well as software tools – to fit their individual ITSM needs.