Impact on privatizing BMC

19 Jan

One of the most awaited Bollywood movies in 2013, ‘Krrish3’, got released and disappeared almost in no time. Its different fact that it claimed to have crossed INR 100 Cr business. Did you note that ‘Krrish3’ continued to do business regardless, as it sold many masks, costumes and toys and yes, there were buyers for that ! Did it really matter to the viewers since it didn’t really meet their expectations?  It is debatable. 

Well, privatization of BMC too happened last year. I am sure that if the readers follow BMC and especially if they are BMC customers or external consultants/system integrators, lot of them seemed to have waited to understand/evaluate its impact post privatization. I intend to share my thoughts about it in short in this blog.

Well, first of all, since Remedy, the platform on which BMC builds most of its solutions, has already been implemented in almost 90% of Fortune 100 and Fortune 500 companies, it is unlikely to be impacted. BMC seems to have been able to turn Remedy business as profitable within 6 months of its purchase from Peregrine. BSM (Business Service Management) is an offering from BMC, which comprises many of its critical products, claiming to help to reduce the cost by 33%. Bladelogic, which was acquired in 2008 for almost $1 Billion, definitely does not seem to be a candidate to be scrapped. Similarly, ProactiveNet, which forms its Service Assurance business is unlikely to be gotten rid of. The cloud offerings from BMC appear to have now been strategized after failing to capture enough customers in that space.

ServiceNow seems to have given a tough time to BMC while competing for its cloud ITSM market. On the similar lines a few other products like Cherwell, OTRS also have emerged successful in converting few BMC customers.

Many of the system integrators/independent consultants outside BMC had speculated that BMC may decommission some of its products. It was also widely anticipated that it may let go some of its teams after privatization. So far, no significant changes seem to have been done. Not sure, Elliott Mgmt, which owns 9.6 of the common BMC stock, may influence some decision. However, since the owners happen to be different now, I think that they may tend to consolidate similar features amongst products and retain a lean team. Also, they may tend to move a significant chunk from US and Canada to countries offering better cost advantage. Gartner has forecasted close to $60 Billion business for IT in 2014; hence, it is likely that BMC may strategize a tad more in ITSM and BSM offerings.

I do not foresee any impact of that on external consultants or system integrators as such. It may have been possibly so, if BMC would have been bought over by IBM or Oracle, as the corridor talks echoed with those as contenders. Let’s wait for a while and watch how new management strategizes to retain BMC in magic quadrant, influence on consolidating the products or merging it with other product/platform.

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