Is change good or bad? You never know. But what we do know is that whenever there is a change – everyone wants to analyze why it happened and what it means. BMC is going through a change – from being a public company to a private company. And, of course, there is plenty of speculation as to why and what the future holds.
I will leave it up to others to discuss why the change was made and I surely don’t have a crystal ball to predict the future. But many say the past is an indicator of the future. So it is worth taking a few minutes to revisit the big changes that BMC has gone through in the past –how the change was handled and the results.
BMC was founded in 1980. This was a time when most major companies owned and relied on a mainframe and IBM thought of itself as a hardware company. The founders of BMC, Scott Boulette, John Moore and Dan Cloer, realized an opportunity that no others had. IBM sold hardware and gave away the software tools needed to make use of their hardware.
ies were making in IBM mainframes and realized they could help them get a better return on their investment by giving them software tools that en
hanced performance and lowered the unit cost of processing on the mainframe. This is the foundation from which BMC was developed. BMC invented and dominated the market for third-party mainframe performance tools in the 1980’s (and beyond).
The 1990’s was the era of distributed systems. There was a lot of speculation about the death of the mainframe along with BMC’s future since its roots and business were mainframe software tools. In 1994, BMC entered the distributed software market with the purchase of Patrol — application event management for distributed systems. This was soon followed by a series of new products and solutions in the distributed market – both through acquisition and organic development. BMC’s stock increased about 10-fold as did its revenue.
2000 and Beyond
The next big challenge was overcoming the technology bust in 2000. With the technology industry in a tail-spin, companies of all sizes and types were affected. BMC developed a strategy called Business Service Management (BSM). Geoffrey Moore documents this transition in his book “Escape Velocity” – Case Example: Creating Company Power at BMC – 2001 to 2010 (See pages 88-93. Check out the book on Amazon.com and search inside the book for BMC Software).
As Geoffrey Moore outlines, it was a bold move that required fortitude and management strength. The results did not begin to materialize immediately. In fact, company revenue dipped from $1.72B in 2000 to a low of $1.29 in 2002. Once again – it looked like the future of BMC was in jeopardy. But BMC continued to deliver on its vision and BSM became a reality. BMC ended the decade at $1.92B annual revenue.
Great companies are able to rise to the challenge of market change. BMC is one of those great companies. As we move into a new decade, BMC is once again faced with change. If the past is any indicator of the future – BMC continues to have a bright and successful future.