BMC: Mainframes Aren’t Going Away

Even while rumors continue to circulate that IBM is trying to unload its z Systems business, evidence continues to emerge supporting the ongoing — if not growing — need for the mainframe. Key findings from the 2016 BMC Mainframe Research Report indicate that mainframes are helping drive Digital Transformation, with ‘superior reliability, performance, and security’ cited as key factors influencing mainframe investments. “With 89% of survey respondents ( more than 1,200 executives and technical professionals) projecting continued strong support for the mainframe, it is clear that companies view the mainframe as a long-term platform,” said Bill Miller, president of ZSolutions Optimization at BMC, in a prepared statement. It is also clear that the company has a vested interest — and 25% of their annual revenues — tied up in mainframes, but as BMC’s John McKenny, VP Marketing and Customer Support of ZSolutions, told IT Trends & Analysis, the research data, including the information they keep private, provides a better understanding of what the different customer segments are doing, and looking for. The respondents fall into three categories: -58% are in the increasing group and looking to grow their investment and use of the mainframe; -23% indicate they will keep a steady amount of work on the mainframe; and, -19% plan to reduce the usage of the platform. For the third segment, reducing cost was the number one concern, said McKenny. They are “not going to get off in the next few months… or years… and we have developed solutions that can help with cost,” he added. One of the interesting findings with the ‘increasing group’  was that automation and analytics had risen to the fourth priority. “From a tactical perspective, we use a lot of this information… we have a lot more that we don’t share publicly… to help us be laser-focused with customers”. Server shipments — including mainframes — increased 2% year-over-year in the second quarter, but revenue dipped 0.8%. IBM, which held down third place, was way behind front-runners Dell and Hewlett Packard Enterprise (HPE), and turned in the worst performance, with 9.1% ($1.2 billion) of the market, down -34.4%. Apparently the z Series was the biggest culprit, with a -40% YoY decline, while the Power-based servers fell a mere -24%. One reason Big Blue may be waffling over selling the business is the profits it makes: with a gross margin of 56.5%, it’s second only to IBM’s Cognitive Solutions segment. Another reason is the upcoming release of the Power9 CPU, which is due out next year and is reported will be competitive with Intel Xeon Servers, something the current generation can’t provide. According to IBM, mainframes...

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…The Mainframe Comes Back With a Vengeance

I’m at IBM Edge this week and in an IBM z Systems presentation. This is a bit of a “Back To The Future” segment for me because z Systems is the latest implementation of the IBM Mainframe which I first learned to program on. If we went back to 1984 when I entered the tech market, that decade the common belief was that the mainframe was dead as an architecture. But at the heart of the mainframe was the idea that computational power was more efficient if centralized, and that a system optimized on I/O could better handle a massive number of clients than individual remote systems. While initially individual servers better segmented workloads; thanks to virtualization and the idea of “the cloud” once again the concept of the mainframe is trendy, albeit as a sort of super-server at scale. But, recently, blockchain has turned the mainframe from being competitive to becoming cutting edge—and rather than chasing industry standard servers, suddenly it is leading them. Let’s talk IBM z Systems this week. To read the complete article, CLICK HERE NOTE: This column was originally published in the Pund-IT...

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BMC & Random Acts of Insight

LAS VEGAS: I got to speak to a number of people at last week’s BMC Engage 2016 Global User Conference, including a number of BMC Software execs who made a number of interesting comments that haven’t appeared in any of my stories yet. Here are a few colorful quotes in my Random Acts of Insight: BMC Paul Appleby Executive Vice President, Worldwide Sales and Marketing, BMC: “The past couple of years we’ve doubled the number of new products we’re bringing to market.” Bill Berutti, President, Performance & Analytics and Cloud Management/Data center Automation, BMC: “The timeliness of us going private was fortunate… the digital revolution is happening in every company… disrupt or be disrupted… At the same time IT budgets are not going up. And by the way, the world is changing really, really fast.” “We’re now getting more relevant to the business.” Jason Andrew, GP and VP, BMC:  “We’ve added 900 new customers in the last 12 months.” “If you want growth you want new customers and don’t lose existing customers… we’re winning marketshare… and we’re changing what the addressable market is.” Sean Hinton, Area Director, Canada, BMC:  “It’s all about business outcomes and trying to engage with our customers that way.” “Engagement, user experience… that’s what it’s all about.” Big Iron (aka Mainframe) BMC Chairman and CEO Bob Beauchamp: “I think it is a competitive advantage that 25% of our business is mainframe.” John McKenny, VP Marketing and Customer Support of ZSolutions, BMC: “We’ve added amost a hundred customers… for MLC.” “IBM has very complex pricing… and most folks really stlruggle with what makes up that bill every month.” Security Robin Purohit Group President, Enterprise Solutions Organization, BMC:  “Security is the number one thing thing that can disrupt digital transformation.” DevOps Beauchamp: “By the way you’re all software companies. Congratulations!” Purohit: “The developer is king as you go digital.” Digitalization Beauchamp: “Go digital or go extinct…” “98% of digital data was created in the last two years. That will be true again next year.” DISCLAIMER: BMC looked after airfare and hotel....

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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 mainframe 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 ServiceNow (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: Dell completed its EMC acquisition in the industry’s biggest merger; HPE 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...

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BMC: Doing the Right Things

“Management is doing things right; leadership is doing the right things.”  Peter Drucker LAS VEGAS: IT is moving from the back office to the boardroom, from making businesses more efficient to making them more effective, and to paraphrase Peter Drucker, all aspects of information technology, including the current darlings — cloud, mobility, analytics, IoT and social — will have to enable businesses to do the right things, at the right places and at the right times, or the businesses will fail. That’s part of the challenge confronting Houston-based BMC Software, a management software vendor that started in the mainframe business back in 1980, broadened its portfolio to IT operations management (ITOM) solutions for on-premise and cloud environments, and went private in 2013. This week the company, with more than 10,000 customers, including 82% of the Fortune 500, is hosting 2,300 attendees at BMC Engage 2016 Global User Conference. The theme — and the company’s focus of late, at least from a marketing perspective, is digitization and what it calls Digital Enterprise Management (DEM), unveiled at last year’s event. “With Digital Enterprise Management, BMC is providing a clear path to successfully manage this digital transformation,” said BMC CEO Bob Beauchamp, last September. “From the mainframe to mobile to the cloud, our solutions allow companies to improve the speed and lower the cost of digital service development, deployment, operation and maintenance.” Digital transformation is not just a technology trend, it is at the center of business strategies across all industry segments and markets, stated IDC. PwC calls the digital enterprise ‘Industry 4.0’, and according to its recent survey of over 2,000 senior executives from nine major industrial sectors and 26 countries, the implications are incredible. Respondents expect to increase annual revenues by an average of 2.9% and reduce costs by an average of 3.6% p.a. These results pale in comparison with the “first movers” who combine high investment levels with advanced digitisation: “they’re already gaining a nearly insurmountable advantage over competitors’. Representing just 4% of the respondents (71 companies), first movers ‘are far more likely to be forecasting both revenue gains of more than 30% and cost reduction of more than 30% at the same time.’ The numbers for the ITOM or IT operations and service management (ITOSM) market vary, but it is a significant and growing market populated by such vendors as Microsoft, BMC Software, Oracle, IBM, HPE, CA Technology and Dell. Last year it was worth $17.44 billion, with a compound annual growth rate of 6.5% between 2016 and 2024 ($30.96 billion), growing nearly twice as fast as the overall IT market worth nearly $2.4 trillion in 2016, and...

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