Earlier this month The METISfiles joined BMC’s analyst conference in London. Some analysts had a vague memory of the last BMC analyst meeting about 7 years ago but nobody was really sure. The reason is probably the fact that, after BMC was taken private in 2013, it took them 2 years to restructure the company and realign, reinforce, update and extend their product portfolio and adapt their business strategy to the mobile and cloud reality. While BMC is still in the same business as 36 years ago – offering solutions for enterprise IT management – its software portfolio has grown substantially. Thanks to the acquisition of some 32 software companies it now offers a wide variety of solutions while its ongoing investment in R&D and product development ensures the depth of their portfolio.
Businesswise, even in 2016 their mainframe product line is still a steady revenue generator and there are no plans to discontinue it as long as IBM keeps refreshing its Z-systems. BMC’s focus however is shifting towards delivering solutions for the digital/mobile enterprise. One in which cloud technology, analytic capabilities and SaaS offerings form key components of its enterprise IT management solution; but now framed as Digital Enterprise Management (DEM).
Obviously they are riding the current wave of Digital Transformation. And just like other IT paradigm shifts, this one offers again a great opportunity for BMC. Not because the digital enterprise is so difficult to manage. It is the added complexity that comes with every new generation of IT systems that requires tools to help integrate, orchestrate, manage and service the ever increasing complexity of IT infrastructure.
BMC took two years to walk the walk towards the digital enterprise and become a self proclaimed “…global leader in innovative software solutions that enable businesses to transform into digital enterprises for the ultimate competitive advantage”. Now the question is if they can talk the talk. Traditionally BMC talked to CIO’s to convey the intricate benefits of their products. Tech speak with people that had the same mindset as the average BMC employee.
But the digital enterprise is not the sole ownership of the CIO or IT manager. On the contrary, CIO’s are much more geared towards business requirements and business executives increasingly have IT budgets to get things done that need to be done. Successfully targeting those shadow IT budgets may present a bigger challenge than expanding its solution portfolio. BMC is aware of this and, as a first step, has designed the DEM (what is in a name) design mapping tool which is intended to map digital business requirements to technical architecture requirements. This is quite a challenge in itself let alone the next step of communicating and transferring the value of BMC solutions to business executives. It may take some time for BMC to succeed in communicating their value to a new breed of customers. It will be even more challenging because they will also address companies further down the business pyramid, away from the safe and loyal Fortune 500.
It will be difficult to measure the success of BMC new strategy as one of the perks of being privately owned is that you don’t have to communicate revenue and income statements. It has bought them two quiet years to get things done internally but in the end businesses want to know who and what they are dealing with. Stating that all product lines grew double digit and that BMC experienced eight consecutive quarters of growth is nice to know but to convince and convert prospects they could do with some more financial transparency.