Daily Archives: December 6, 2011

BMC Still Likelier to Buy than to be Bought

After reading a recent Network Computing piece on BMC Software, it struck me that the management-software purveyor finds itself in a Darwinian dilemma: acquire or be acquired.

If it chooses to acquire, something to which it has not been averse previously, BMC might wish to make a play in enterprise mobility management (EMM) or mobile device management (MDM). As the article at Network Computing explains, that is a current area of need for BMC.  There’s no shortage of fish in that pond, and BMC is likely to find one at the right price.

Conversely, BMC might decide that it can’t compete in the long run with much bigger systems-management rivals such as IBM, HP, Microsoft, and Oracle. Even as BMC continues its transition toward defining itself as a multiplatform, hardware-neutral cloud-management vendor, it might conclude that the odds and resources stacked against are too great to overcome.

Dell Could Come Knocking

That, though, is by no means inevitable. The company has been independent for a long time — about 31 years, if we’re counting — and it has been subject to almost as many takeover rumors in the last few years as has F5 Networks. Still, like F5, it remains an independent company, and it might continue to do so indefinitely.

Nonetheless, if BMC finally chose to entertain a buyer, Dell might be at the front of the queue. Yes, we know that Dell is shopping for other goods — Dario Zamarian, Dell’s networking GM and SVP, has suggested that a purchase in L4-L7 network services might be forthcoming — and BMC’s price tag might be a bit steep (its market capitalization is about $6 billion).

Then again, Dell sees itself as an up-and-coming player in converged data-center infrastructure, and BMC offers management-software capabilities that Dell might need if it is to weave a compelling cloud-management narrative.

Intangibles and Existing Partnership

As for intangibles, Dell and BMC are very familiar with one another. The companies have partnered since 2002, working to accelerate IT deployment and configuration in a growing number of data centers. Dell has been a BMC customer for many years, too. Last and least, they’re both Texas-based companies.

The current arrangement between the two companies involves integration of Dell’s Advanced Infrastructure Manager (AIM) with BMC’s Atrium Orchestrator. It also encompasses BMC Asset Management as well as integration between BMC Server Automation (part of the BMC BladeLogic Automation Suite) and the Dell Lifecycle Controller.

If Dell were to acquire BMC, it obviously would want to squeeze more from the marriage. One possible scenario would involve Dell recreating and expanding upon the sort of engagement BMC has with Cisco pertaining to the latter’s Unified Computing System (UCS).

Congruent Messages

In this case, though, BMC’s software would be wedded to Dell’s evolving Virtual Integrated System (VIS). A lot of the marketing language Dell uses on its website is uncannily similar to the sort of pitch BMC makes for its cloud-management software. Both companies talk about automating and simplifying data-center environments, they both emphasize management of physical and virtual infrastructure, and they both stress the openness of their respective architectures, especially the ability to manage multiplatform (and multivendor) hardware and software.

In selling itself to Dell, though, BMC would be walking away from its relationship with Cisco, and its partnerships with some others, too. What’s more, Dell would assume ownership of some parts of the BMC business, such as mainframe-management software, that might not seem a great fit, at least at first glance.  Still, a Dell-BMC combination seems more plausible than fanciful.

If I were to wager on whether BMC will buy or be bought, though, it’s probably easier to imagine it buying an EMM or MDM vendor than to envision it getting scooped up at a potentially considerable premium by Dell (or another vendor). Even so, either outcome is within the realm of rational deduction.