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BMC Software, Inc.
(713)
918-8800
2101
CityWest Boulevard
Houston, TX 77042
www.bmc.com
Sales
$1.4
billion
Business Description
BMC Software is one of the world’s largest independent systems software
vendors. Delivering Business Service Management, we provide software
solutions that empower companies to manage their information technology (IT)
infrastructure from a business perspective. Our extensive portfolio of
software solutions spans enterprise systems, applications, databases and
service management. We were organized as a Texas corporation in 1980 and
were reincorporated in Delaware in July 1988.
Products
Our software products are designed to help our customers proactively and
automatically manage their businesses through our comprehensive enterprise
management solutions. These solutions span enterprise systems, applications,
databases and service management. During fiscal 2004, we managed our
business along the following broad categories: Enterprise Data Management,
Enterprise Systems Management, Remedy and Security and Other Solutions.
Enterprise Data Management
Our Enterprise Data Management solutions provide intelligent, automated data
management tools across all major databases, including IBM’s IMS and DB2 for
the mainframe environment and Microsoft’s SQL Server, IBM’s DB2 UDB and
Informix databases and databases from Oracle and Sybase for distributed
computing environments. This segment includes our SmartDBA family of
database management tools, which offer highly automated monitoring and
diagnostics, automation of day-to-day management tasks, and fast, reliable
database backup and recovery. These solutions assist customers in lowering
their operating costs and increasing their IT staff productivity by
optimizing database availability as well as ensuring faster rollout of
business applications. The software products in this segment address the
following data management needs of businesses: application performance,
database performance, space management, SQL development, SQL tuning, system
performance, database administration, high-speed utilities and backup and
recovery across mainframe and distributed computing environments. Our
Enterprise Data Management solutions contributed approximately 45%, 44% and
37% of our license revenues in fiscal 2002, 2003 and 2004, respectively.
Enterprise Systems Management
Our Enterprise Systems Management solutions provide software tools for
businesses to proactively and centrally manage their IT infrastructure. A
solid infrastructure connected by a reliable network is the foundation of
any successful business. It is vital to know that a problem exists before it
impacts critical business applications. Accurate infrastructure management
ensures that all components required to deliver quality service to users are
under control and performing at optimal levels. Our solutions in this
segment include our PATROL product line for distributed computing
environments, our MAINVIEW® product line for mainframe computing
environments and our enterprise job scheduling and output management
solutions. Within this product group, we provide the following systems
management solutions: server management for Unix, Windows, Linux and
mainframe environments, applications management, network management,
enterprise job scheduling, output management, service modeling and
performance and capacity planning. Our Enterprise Systems Management
solutions contributed approximately 51%, 47% and 42% of our license revenues
in fiscal 2002, 2003 and 2004, respectively.
Remedy
Our Remedy software solutions enable organizations to automate and manage
internal and external service and support processes. Remedy delivers
out-of-the-box applications that help customers align service and support
with business objectives, improve service levels, manage assets and lower
costs. All Remedy applications, including the help desk, asset management,
change management, service level agreement and customer support
applications, are built on the highly flexible Action Request System®,
empowering customers to easily adapt their Service Management solution to
unique and changing requirements. On February 2, 2004, we acquired the
assets of Magic Solutions (Magic) from Network Associates. Our Magic
products provide IT Service support, including asset tracking, change
management, and help desk products for small and medium size businesses. The
Magic business is part of our Remedy business unit. Our Remedy software
solutions contributed approximately 6% of our license revenues in the four
months after acquisition in fiscal 2003 and contributed 19% of our license
revenues for the twelve months, including the results from Magic in the two
months post-acquisition, in fiscal 2004.
Security and Other
Our Security and Other software solutions facilitate user registration and
password administration and, thereby, enhance and strengthen the overall
security of our customers’ information systems. This product line
contributed approximately 4%, 3% and 2% of our license revenues in fiscal
2002, 2003 and 2004, respectively.
Strategy
Our strategy is focused on Business Service Management (BSM), the direct
linkage of IT resources, management and solutions with the goals of the
overall business. The objective of our BSM strategy is to enable companies
to move beyond traditional IT management and manage their business-critical
services from both an IT and business perspective. The intent of the BSM
strategy is to provide solutions that will enable customers to link their IT
resources tightly to business objectives and manage these resources based on
business priorities by providing a “whole view” of their business and IT
operations. Three important components of BSM are: 1) IT Operations and
Infrastructure Management, 2) IT Service and Applications Management and 3)
Service Impact Management.
The IT Operations and Infrastructure Management component of the BSM
strategy is based upon our historical strength in providing enterprise
management solutions for data, infrastructure, application, performance and
service management. We provide our customers with the ability to monitor and
control the key components in their IT infrastructure, including systems,
databases, applications, storage and networks, enabling them to tie
service-level agreements to business needs, rather than technology metrics.
We added an important element to our portfolio when we completed our
acquisition of Remedy® in November 2002. Integration of Remedy’s
industry-leading service desk, change management and asset management
capabilities with our broad application and component management solutions
enables us to deliver end-to-end, closed-loop service management to
customers. Together, these solutions build a solid foundation for the IT
Service and Applications Management component of the BSM strategy by
offering both the delivery and support components of service management
designed to be proactive, effective and focused on customer business
requirements.
An important component of BSM is to directly link business services to the
underlying technology. The acquisition of IT Masters in March 2003 enables
us to deliver the Service Impact Management component of the BSM strategy
and enhances our competitive position in the service management market. IT
Masters’ MasterCell® technology, renamed PATROL® for Service Impact
Management, combines powerful event automation and service modeling
capabilities to transform availability and performance data into detailed
knowledge about the status of business services and service level
agreements. Our comprehensive enterprise and service management solutions,
combined with PATROL for Service Impact Management’s IT service modeling and
management capabilities, enable customers to manage their business using a
truly integrated service impact management approach.
In late April 2004, we announced the signing of a definitive merger
agreement with Marimba, Inc. (Marimba). The proposed acquisition is subject
to customary closing conditions, including the approval of Marimba’s
stockholders, and we anticipate closing this transaction during the second
fiscal quarter of 2005. Once the transaction closes, we expect the Marimba
products will strengthen our BSM technology by adding change and
configuration management components.
Our BSM strategy gained momentum in the market during fiscal 2004. This is
evidenced by both our strong partnerships with industry leading companies
and the feedback we are getting from our customers in terms of signed
transactions. We identified over 100 transactions that were related to BSM
in fiscal 2004. We also are experiencing increasing interest for BSM from
customers as evidenced by a growing pipeline for our BSM business.
Although we believe that we have the most complete BSM offering in the
market today, our BSM strategy will continue to evolve over the next several
years. In addition to adding new solutions, through both internal
development and acquisitions, that support this strategy, we expect that our
partnerships with leading companies will be a key factor in our BSM
strategy. Our current BSM partnerships include Accenture, Dell, EMC, Siebel
Systems, and Symantec.
Competition
The enterprise management software business is highly competitive.
There are several companies, including IBM,
Computer Associates and
Microsoft, as well as large computer
manufacturers such as Sun Microsystems
and Hewlett Packard, which have
substantially greater resources than we have, as well as the ability to
develop and market enterprise management solutions similar to and
competitive with the solutions offered by us. In addition, there are
numerous independent software companies that compete with one or more of our
software solutions. Although we believe we are uniquely positioned to offer
BSM solutions to customers, several of our major competitors have begun to
market BSM-like solutions, and we anticipate continued competition in the
BSM marketplace. Although no company competes with us across our entire
software solution line, we consider at least 70 firms to be directly
competitive with one or more of our enterprise software solutions. Certain
of these companies have substantially larger operations than ours in these
specific niches. In addition, the software industry is experiencing
continued consolidation.
Certain of our solutions in the Enterprise Data Management product group
compete directly with IBM, primarily with IBM’s IMS and DB2 database
management systems, and its IMS/TM and CICS transaction managers. Some of
our solutions, including our core IMS and DB2 database tools and utilities,
are essentially improved versions of system software utilities that are
provided as part of these integrated IBM system software products. IBM also
markets separately priced competing utilities in addition to its base
utilities. IBM continues, directly and through third parties, to enhance and
market its utilities for IMS and DB2 as lower cost alternatives to the
solutions provided by us and other independent software vendors. Although
such utilities are currently less functional than our solutions, IBM
continues to invest in the IMS and DB2 utility market and appears to be
committed to competing in these markets. If IBM is successful with its
efforts to achieve performance and functional equivalence with our IMS, DB2
and other products at a lower cost, our business would be materially
adversely affected. In addition, IBM recently announced its intention to
acquire Candle Corporation whose products compete primarily with MAINVIEW,
our mainframe monitoring product line. As a large hardware vendor and
outsourcer of IT services, IBM has the ability to bundle its other goods and
services with its software and offer packaged solutions to customers, which
could result in increased pricing pressure. To date, our solutions have
competed well against IBM’s solutions because we have developed advanced
automation and artificial intelligence features and our utilities have
maintained a speed advantage. In addition, we believe that because we
provide enterprise management solutions across multiple platforms we are
better positioned to provide customers with comprehensive management
solutions for their complex multi-vendor IT environments than integrated
hardware and software companies like IBM.
We believe that the key criteria considered by potential purchasers of our
products are as follows: operational advantages and cost savings provided;
expected return on investment; product quality and capability; product price
and the terms on which the product is licensed; ease of integration of the
product with the purchaser’s existing systems; ease of product installation
and use; and quality of support and product documentation. Because potential
purchasers of our products typically acquire such software to manage
critical IT systems, they also weigh the market experience and financial
health of the supplier in making their acquisition decision.
Ticker
BMC
Data Management Software - Category
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