BMC aims to stay ahead of the pack

By Nicola Mawson for BMC Software

Johannesburg, 27 Oct 2006

While BMC Software is ahead of the business service management (BSM) software curve, the company is aware its competitors are chasing it.

The company, which cites Gartner research, says it is ahead of the curve in the rush to develop BSM software, but other companies are catching up. It is at least a year ahead, according to industry research quoted at an industry forum held by the company yesterday.

CEO and president Bob Beauchamp says: "While we are proud of the fact that other companies are following our lead, we are also aware of the reality that these companies are now chasing us."

Country manager Arjen Wiersma says companies on a journey to align business and IT functions are at an amber light. Failing to go on green could result in their demise.

BMC, he says, provides building blocks that companies will require to enable IT departments to follow suit when companies have to change direction quickly in order to remain competitive. However, he says BMC`s biggest mistake was not trade-marking BSM.

"When we started [development], we forgot to put the little 't` on the end." BMC Software began talking with clients in 2002 and publicly announced its business service management strategy in 2003.

Innovation

It is the eighth-largest software company globally based on revenue and has 15 000 customers in 16 countries. With $1.3 billion in cash and no debt, it spends between 20% and 25% of its revenue every year on research and development, says Jorge Dinares, VP of worldwide growth and developing markets.

Dinares says BSM is moving towards maturity and BMC is in execution mode with some customers who have implemented the management tool. In developing markets, the product is seeing growth of 40%, while - on average - it is growing in double digits.

"We need to continue to push and invest to stay ahead." BMC, he says, in being first to market and - in so doing - created the market, now needs to remain ahead of the pack.

Dinares says implementing BSM could free up as much as 25% of overall IT budgets. Quoting Forrester, he says 76% of IT budgets are spent on "making sure what we have today continues working". As a result, little is spent on innovation.

Corporate strategist Peter Armstrong says casual change can cause disaster. He says every change implemented should be preceded by the "why" question. "The question 'why` to me is the most important question in the universe."

Armstrong says companies should ask why they are implementing a change, and what value it will add. "You can align IT and business and still have chaos."