BMC: Go Digital or Go Extinct

LAS VEGAS: My primary objective for attending management software vendor BMC Software’s third annual customer/partner event, BMC Engage 2016 Global User Conference — other than its Sin City venue — was to try and understand how a 36-year-old ISV that got its start in the business (and which still accounts for 25% of its revenue, although packaged as a separate business) can reposition itself as a leader in digital transformation (DX). Even with more than 10,000 customers, including 82% of the Fortune 500, and around $2 billion in annual revenues (estimated, since it’s been private since 2013) that’s a seemingly outrageous claim to make, the old proverbial tail wagging the dog.

If a quarter of BMC’s revenues are still based on Big Iron, the other 75% represents a broader set of tools for the rest of the market, including another 25% of its revenues coming from ITSM, or ITSSM as Gartner calls it, and who just crowned BMC (21.3% market share), along with (34.4%), as the two leaders in this segment, valued at $2.2 billion in 2015, in its Magic Quadrant for IT Service Support Management Tools.

An interesting sidenote to this is that a few months ago ServiceNow announced that it had entered into a covenant not to sue for patent infringement with BMC for a term and took aggregate charges of $270 million for litigation settlement expenses related to its litigation associated with BMC and Hewlett Packard Enterprise. ServiceNow had been accused by BMC of infringing on eleven of the patents in its portfolio, and BMC has also filed similar additional suits against ServiceNow in the U.S. and Germany.

Fast forward, and BMC Engage had the (mis)fortune of taking place while a number of mega-deals were transforming the IT industry’s biggest players: completed its EMC acquisition in the industry’s biggest merger; spun off another piece to become a $28B entity, a mere shadow of its glory days of a few years ago when bigger was best, revenues over $100B annually, not bust (although it still owns sizeable shares of both its services and software spin/mergers); and Intel finally accepted that trying to successfully run  a security business was anything but complementary to its chip core.

BMC’s message has been that businesses must digitize to survive, and it can help them do so. While that might sound strange, given its history and current size, the company has been thriving, in a more modest way than its much bigger newsmakers. The message that the world is changing and business must change with it is hardly new or profound, but the underlying reality is that the fundamentals remain the same: businesses have to profitably sell products and/or services customers want, and do so as well or better than their competitors.

What’s changed — is changing — is the environment in which we exist. In a digital economy, with 24×7 connectivity, and instant access to information, making use of that information efficiently and effectively will be the key to success and survival. Everything always changes, and business — and BMC — are no different.

“The number of new technologies coming together [mobile Internet, cloud, big data, virtual reality, advanced robotics, blockchain, IoE, bots, and autonomous vehicles] and the potential disruption to industries is unprecedented,” said BMC Chairman and CEO Bob Beauchamp in his keynote, and this requires a new kind of “hyper-agile digital enterprise. It’s not just about adopting technology, but redesigning companies on how they relate to customers, their supply chain, partners and their employees. “If you don’t do that, you don’t change the culture,” he said.

The company began its DX reorientation almost three years ago, he said. “We’re really just now starting to hit our stride in running… and coming out of the show we will accelerate.” Every single large enterprise out there is changing the way that they deal with their customers, employees and partners, but they need help doing so, and Beauchamp believes BMC is well-positioned to take advantage of that need.

IT’s — and everybody’s — future is all about digital transformation, said guest speaker Sandra Ng, Group Vice President heading IDC’s Asia-Pacific Practice Group, and to succeed DX “needs to be a customer-centric”. DX is changing everything, and it’s doing so rapidly, she said: two thirds of CEOs of global 2000 enterpriese will have DX at the center of their corporate strategy by the end of 2017.

Not only is DX happening quickly, it also changes everything quickly too. “In this DX economy, speed is everything”, said Ng. The IT DX playbook revolves around innovate, integrate and incorporate: innovate with business to create a digital enterprise; integrate digital capabilities with the nterprise platform; and incorporate new techniques and technologies into the IT organization.

IDC’s DX framework consists of five elements (and their priorities): leadership (46%); omni-experience (57%); information (75%); operating model (55%); and worksource (41%). Ng said DX is a customer-centric business strategy, and in 2016 customer engagement and experience came from nowhere to become the second most important business priority, just behind operational efficiency and ahead of cost savings.

When it comes to making the transition from IT powering the back office, to digital business powered by IT, one could make the case that who better to help ease that transformation than a vendor with solid roots in the /mainframe environment? Certainly that’s one of ’s value propositions, but like the currently struggling Big Blue, it remains to be seen if BMC’s ITOM tail can wag the DX dog.

So far, so good, but it’s just tiny wags, and a really big dog. BMC’s biggest competitor is BMC from 2012-2013, said Beauchamp. Now we have to see just how much their customers will embrace the new DX-enhanced BMC.

The Fiddly Bits (& Bytes)

BMC made a number of product announcements, including extensions to its BladeLogic Threat Director solution, and enhancements to its popular Control-M application workload automation platform. The company said BTD now addresses two of the biggest problems in current security strategies: blind spots and isolated processes. It’s integration with BMC Discovery allows for the identification of unsecured assets, and provides visibility into application dependencies.

With more than 3,000 customers, and having recently received the highest cumulative score in the Radar for Workload Automation report from Enterprise Management Associates, BMC’s Managed File Transfer solution has been enhanced with new features and for ‘more unified, highly-efficient managed file transfer, optimized rapid cloud deployment for AWS and Azure, and a new Automation API with expanded ‘Jobs-as-Code’ capabilities for DevOps teams’. “BMC is the market leader,” said Gur Steif, President, Workload Automation, BMC. “We are growing our market share.”

He said the DX opportunities for Control-M are endless. “Workload automation has the ability to help companies with this; it is a key enabler.”

First introduced a year ago as a strategy and a set of IT solutions, the Digital Enterprise Management (DEM) portfolio has been expanded with seven ‘action-oriented key initiatives, designed for customers to fast track digital business’:

-Agile Application Delivery: Accelerate delivery of agile applications across multi-sourced cloud environments for both cloud-native and traditional applications, including monitoring, workload automation, environment-on-demand, and release automation;

-Digital Workplace: Build a digital workplace that enables businesses to improve workforce agility, employee productivity, and the customer experience by transforming the corporate culture to revolve around employees’ needs;

-Big Data: Automate, accelerate and secure the integration of big data into the enterprise environment, enabling operations excellence to support customers’ digital business innovation agendas;

-Service Management Excellence: Provide end-to-end management of digital and traditional services allowing businesses to support rapid change, end user expectations, and the proliferation of mobile, hybrid, and cloud infrastructure;

-Multi-Source Cloud: Leverage existing IT resources while integrating into public and private cloud environments, giving organizations greater control of their data, improved application performance and efficiencies, and enhanced collaboration, all while helping to centralize IT management;

-SecOps: Deliver visibility and facilitate communication between security and operations, to remediate threats quickly and accurately in order to confidently protect the business and customers; and,

-IT Optimization: The funding of innovation largely comes from the continuous optimization of core IT systems, including but not exclusive to the mainframe.

DISCLAIMER: BMC looked after airfare and hotel.


Author: Steve Wexler

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