Taking on the competition
How much of BMCs growth rates are being driven directly or indirectly by the Remedy unit? We dont break it out. It is part of our Core Business Service Management that includes service management, asset management, change management, transaction management and identity management. That is a whole set of products that didnt exist in BMCs portfolio four years ago. Those products make up our core BSM business, which is over 40 percent of license bookings and revenues. It grew 26 percent year over year this quarter. That is a sub-group of the enterprise service managementour big business unit that includes all our products not in the mainframe service management group. That group grew 17 percent in license booking.In our two largest deals last quarter, one is a very large insurance company. They replaced millions of dollars of CA mainframe products, HPs help desk and asset management product line, NetIQ and other smaller vendors on systems management to standardize on BMC and our CMDB. The second largest transaction was a global bank in Switzerland that has a stated goal of building the most sophisticated IT environment of all of banking. We beat IBM and HP in that transaction. Those are our two largest deals [in the quarter] and both involve competitive wins/ replacements against our largest competitors. Thats a change. A few years ago it would be capacity upgrades of our existing installed base. That is a fundamental shift. Is BMC capitalizing on CAs continued struggles? Yes. I think that we see both in the field as well as in surveys weve done that this is a good time for us to be aggressive against CA as they struggle to regain their legs. How much market share do you believe BMC is gaining? It would be very difficult to quantify. With 26 percent license booking growth in core BSM, 18 percent overall and 9 percent revenue growththats faster than the market. Whats the ratio of revenue generated by mainframe software sales versus distributed systems? Today mainframe is about 40 percent of our business. But Id add our core BSMfast growing new stuff we didnt have four years agois also now about 40 percent of our license business. How would you characterize the quarter in terms of mainframe revenue historically for BMC? Mainframe was excellent. We grew customers, total bookings, license bookings. Year-to-date mainframe is up 4 percent in total bookings. It stems a long term decline our industrys been having. I think the markets pretty close to zero. We believe we gained share this quarter in mainframe. How much did acquisitions contribute to the growth in the quarter? Its a small percentage of growth. Acquisitions have been a key part of our transformation over the last four years. We have built a strong portfolio of products through internal development. The Atrium CMDB was written in-house. The Remedy help desk was through an acquisition four years ago. Our transaction management business is growing 50 percent year over year and its on track to be $100 million in revenue. Its a combination of internal development and acquisitions. What holes do you see in your portfolio of BSM products? There are opportunities for us to continue to expand the strategy, but I dont want to broadcast our next moves. We do consider acquisitions as part of our strategy, and we have companies on our radar screen, but were also a prudent acquirer. Its reasonable to assume we have acquisitions we will do in the next few quarters. Check out eWEEK.coms for the latest news, reviews and analysis on IT management.
From the earnings call it seems you were suggesting that BMC is taking market share away from competitors. Which competitor(s) is BMC most successful in selling against?