BMC Software

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BMC Software Jumps Into Open Systems Market

By Jack Sweeney

Group Editor

Among the many mainframe software vendors that have taken the leap into open systems computing, BMC Software Inc. of Houston ranks among the most daring.

The company, which last year captured a mere 11 percent of its $428 million in annual revenue from open systems sales, is now competing against vendors more than 10 times its size.

Industry analysts expect the company's year-end revenue to reach nearly $540 million. Open systems-related sales are expected to account for $120 million, or 22 percent of that amount.

While BMC may be only a minor success story in a fast-growing market, the developer's steady growth underscores how shrewd platform alliances and savvy integrator partnering can raise the open systems fortunes of an industry underdog.

Not excluded from the growing success story is BMC's government sector, where the developer's open systems product offerings, known as Patrol, have captured a sizable portion of the developer's sales mix.

"Patrol sales have tripled every year overall and inside the government sector we've experienced a tenfold increase," said John Balena, BMC's newly appointed general manager of federal operations.

Formed 18 months ago, BMC's government unit has used the developer's emerging open systems initiatives to its advantage, Balena said.

"We want government to be responsible for about 10 percent of BMC's worldwide revenue and it will probably take us another year or two to get there," said Balena. The words of BMC's top government executive describe no small feat.

Today, BMC's Patrol product offerings overlap with network management products such as Openview from Hewlett-Packard Co., Palo Alto, Calif.; and Spectrum from Cabletron Systems Inc., Rochester, N.H. In addition, the developer's open systems offerings overlap with systems management frameworks such as Unicenter from Computer Associates International of Islandia, N.Y., and TME from Tivoli Systems Inc. of Austin, Texas.

The developer's advancements are due in large part to a strategy that emphasizes integration and partnering. A number of years ago, as BMC prepared to expand beyond mainframe computing, the developer determined it would be better to integrate its technology with its competitors and complement their functionality.

"We never walk in the customer's door and say 'replace everything you have in terms of management solutions.' Instead, we tell them we will integrate with whatever they have and this quickly becomes an attractive proposition to both the customer and the integrator," said Wayne Morris, BMC's director of Corporate Strategy.

To undertake such a strategy, the developer needed to undergo several reorganizations, BMC executives said. "We have now aligned our development staff so that there [are] no longer mainframe people and open systems people and have instead aligned them with applications management, data management and performance optimization across all platforms," said Morris.

In March 1996, BMC's product portfolio was comprised of 110 products in 13 product groups, of which 83 were mainframe products and 27 were open systems products. BMC now offers 200 mainframe products and 40 open systems-related products.

Also helping BMC are the fewer number of barriers to market entry in the open systems software market versus those inside the mainframe market, industry executives said. In the open systems market, computer resources are far less expensive, development skills are more widespread and venture funding is more widely available. In addition, industry integrators play a large role in driving the adoption of alternative software technologies, network management executives said.

Besides platform alliances, BMC has advanced within the federal market through a variety of partnering opportunities with integrators. While BTG Inc., Vienna, Va.; DLT Solutions Inc., Herndon, Va.; and Lucent Technologies, Murray Hill, N.J.; currently hold BMC's General Services Administration supply schedule, the software vendor has joined forces with new integrator partners such as Lockheed Martin Corp., Bethesda, Md., and KPMG Peat Marwick of New York.

Also, within the last six months, Electronic Data Systems Corp., Plano, Texas; MCI Systemhouse, Ottawa, Ontario; and Sun Microsystems Inc., Mountain View, Calif.; have begun incorporating the Patrol management suite into their solution sets.

Such integrator and platform alliances have helped BMC capture some of the government's most prestigious accounts.

"A good example of our management technology is being used by NASA, where we monitor the entire mission-control system for the space shuttle. This is really a business-critical application," said Balena.

An integrator executive familiar with BMC's role at NASA, but who asked to remain anonymous, underscored the value behind the software vendor's platform alliances.

"There are just so many software integration challenges at NASA that any vendor approaching the network management side better be prepared to integrate with everyone else, and BMC does this," said the executive, who works for integrator Computer Sciences Corp. of El Segundo, Calif., the latest integrator to expand its partnering relationship with BMC.


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