BMC doesn't stand for Business Mismanagement Cure, but it could. BMC Software is a leading provider of business management software used for a variety of functions and processes, including recovery and storage management, business process integration, service management, application and database performance management. BMC, which primarily serves larger companies, provides tools designed to manage enterprise servers, speed up and monitor databases, eliminate unplanned outages, and recover system assets. It also provides professional services such as consulting and systems integration. BMC sells directly and through channel partners worldwide. The company was taken private in 2013.
Change in Company Type
In September 2013 the company accepted a $6.9 billion buyout offer from an investor group led by Bain Capital and Golden Gate Capital. The buyout came as BMC had fallen behind competitors better suited to handle the migration to cloud-based products and services.
BMC's $2.2 billion in annual sales is split nearly evenly between the US (51%) and international markets (49%). The company's product manufacturing and distribution takes place in Houston and, internationally, in Dublin. Its major R&D campuses are in the US, India, and Israel.
The company is made up of two primary units: enterprise service management (ESM) and mainframe service management (MSM). ESM provides software for service assurance (managing IT functions and processes) and automation (automating otherwise manually-intensive compliance and configuration changes to servers, networks, databases, and applications). ESM also encompasses BMC's professional services unit. MSM provides tools for mainframe database management and monitoring. It earns the bulk of its revenue from maintenance and support services and by licensing its software.
BMC's fiscal 2013 (ended March) sales increased by 1% versus the prior year, while net income declined 17% over the same period. Both software maintenance and professional services revenues increased by about 5%, while software license revenue fell 4%. The increase in maintenance revenue resulted from an increase in enterprise service management (ESM) sales, partially offset by falling mainframe service management (MSM) sales.
Sales in the US grew 3% year over year, while international sales were essentially flat. While BMC's sales have been increasing for more than a decade, the rate of increase has slowed of late.
While BMC has a strong reputation for keeping corporate computer networks humming along, it has fallen behind smaller rivals in the market for server software, which has been moving to companies’ data centers as customers rely more on programs delivered over the Web. As a private company, BMC aims to become more aggressive in managing cloud-computing applications and mobile devices.
The company's strategy is to hold on to its position as a leading provider of business management software both through new product introductions and acquisitions. The company recently released BMC MyIT for corporate IT departments to give employees personal control over the delivery of IT services and information from multiple devices. In 2012 BMC expanded its MainView monitoring and automation product suite with the acquisition of I/O Concepts, a developer of security, automation applications for mainframe computers. BMC billowed up its cloud capabilities that same year by acquiring mid-market IT management software provider Numara. The purchase not only expanded its reach into the SaaS model, but also into the small- and mid-sized business market.
BMC maintains technology alliances with such companies as Citrix, Dell, Microsoft, SAP, Amazon Web Services. Red Hat, McAfee, and Cisco. Its systems integration partners include Accenture, SalesForce, and Wipro.
Mergers and Acquisitions
BMC continues to expand beyond its core expertise in mainframe management and utility software, with an emphasis on its ESM products. The company completed four acquisitions in 2012. In September it purchased My-eService, a provider of self-service IT support products; in August it acquired VaraLogix, which added application deployment automation technology to its portfolio; in April BMC purchased Abydos, the maker of an add-on product for BMC's Remedy IT Service Management application called Process Designer; and in February it bought IT service and asset management software developer Numara Software to expand its software-as-a-Service capabilities, particularly for mid-sized businesses.
In 2011 BMC acquired Coradiant and created its End User Experience Management offering. Coradiant's technology allows customers to monitor how application performance affects the end-user experience. Its software is offered on enterprise and cloud-based software-as-a-service (SaaS) platforms and is sold to clients in a diverse group of industries including education, finance, e-commerce, insurance, and health care.