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IT systems management technology company BMC Software on Nov. 8 reported net earnings of $58 million, or 28 cents per share, on revenue of $387 million in its fiscal 2007 second quarter.
The company reported net earnings of $43 million, or 19 cents per share, in the same quarter a year ago.
Total revenue rose 7 percent over the year-ago quarter, and the company has now reported six consecutive quarters in which its financial results met or exceeded guidance.
CEO Bob Beauchamp credits the success of its Business Service Management product line, which is a suite of products for managing data center resources and performance. BSM license booking rose 30 percent year over year in the second quarter and drove a 23 percent increase in total license bookings in the period, according to Beauchamp.
The BSM products “now represent over 40 percent of license bookings for the entire company, and we had none of those products four years ago when we started down this road,” said Beauchamp in an interview with eWEEK on Nov. 8 after BMCs quarterly conference call. BSM is “an entirely new franchise [built] around changing the way people manage IT,” he said.
Another factor in the companys performance is the decision of the last two years to operate its mainframe IT management product line as a separate division, with its own dedicated sales force and marketing efforts, Beauchamp said. The divisions revenue had been in decline but is now flat year over year. The company will continue to work to generate rising revenue in future quarters, he said.
Budget discipline also helped because the company was able to grow revenue 7 percent year over year and 5 percent over the first half of the year while expenses remained flat, said Beauchamp. “In fact, even doing acquisitions we were able to hold our expenses flat,” he said.
In March 2006, BMC acquired Israel-based Identify Software and its transaction management technology for $150 million. Identifys technology has become a major part of BMCs product line.
The company ended the second quarter with $1.4 billion in cash and securities and $1.6 billion in deferred revenue.
The company also continued its stock buy-back program, spending $130 million to acquire 5.2 million shares of BMC stock. They company still has $529 million left out of the $1 billion share buy-back program that it approved in its fiscal 2006 third quarter.
Beauchamp said the companys performance placed it third behind IBM and Computer Associates in IT management software market and ahead of Hewlett Packard.
He contends that the prospects are good for continued long-term growth as corporate IT managers will continue to look for ways to reduce costs while improving the efficiency and reliability of their data center operations.
Beauchamp quoted a recent Forrester Research study that claims that enterprises can save up to 25 percent of their total IT costs by implementing improved IT management technology, or what BMC calls Business Services Management.
IT managers seeking this kind of savings is what drove BMCs 30 percent growth in license bookings, “and we do believe this is a trend thats going to be around for awhile,” Beauchamp said.