Getting out of the public eye has allowed BMC to redirect shareholder funds into R&D and help it live up to its new motto “bring IT to life” – something that could refer to either the company or its customers’ IT projects...
BMC Software has been a long-term fixture of the IT landscape, delivering software that supported CIOs in their bid to keep the lights on. But it had been facing the onslaught of fresh new competitors, and also felt shackled by its public ownership with the accompanying relentless focus on quarterly numbers.
By taking the business private the company has been able to inject significant funds into R&D, has embarked on a legal stoush against arch rival ServiceNow, which it has accused of intellectual property infringement, and hired a series of executives it believes can catapault it forward.
Paul Appleby, a former Salesforce executive has joined the company as the executive vice president of worldwide sales and marketing, and was in Sydney last week to outline the company’s transformation plans.
Appleby said that BMC wanted to support customers as they “deal with digital disruption … in a world where they are constrained by legacy IT”. Enterprises he said needed to manage what amounted to “bimodal” IT where they innovated at the edges but still operated core legacy systems. “The challenge for the business is how to industrialise the back end and make it scale,” he said.
He claimed that this was BMC’s heritage. “BMC’s in a position to navigate everything from the mainframe to the mobile.” However Appleby also acknowledged that BMC itself had needed to transform the business, and that taking the business private had unshackled it from the constraints of investors who might have balked at the impact on profits arising from a surge in the investment levels which BMC believed were necessary, and also as it transitions from a sales to a subscription business model that accompanies the flight to cloud.
Appleby said that R&D spending had been increased to $US120 million this year, and that there was a much sharper focus on innovation. “The portfolio had to be modernised and consolidated,” he said.
Since going private BMC has also come out swinging against ServiceNow, launching a legal challenge over alleged intellectual property infringement. Appleby said that BMC was as a result starting to see a “significant” number of companies which had left BMC for Service Now, return to the BMC fold, although he was unable to name any.
