How BMC Software is Creating Strategic Differentiators

BMC Software followed the Dell model by going private. Industry watchers observe similarities in the approach. How has the move worked for BMC? Michael (Dell) and I exchanged notes recently, there were a lot of similarities. The ‘short-termism’ that is often associated with a public company has given way to more strategic thinking. We can now spend more time on the business than studying the markets and dealing with shareholders. You don’t have to explain the complexity of the income statements to a closed set of decision makers; decisions can be made much faster. However, there will always be financial goals.

HP, CA and IBM compete with you directly in certain markets. IBM and HP have their hardware businesses to tap into and all these companies are acquiring. Given this scenario, what exactly is BMC bringing to the table? While there is a place for everyone in the marketplace, and while the others are picking their niche domains or positioning either in big data and analytics, application tools and services, or going on to become cloud providers, we believe that BMC is the only company focused on the core service management environment. We are staying true to our original mission of being an abstraction layer that is helping manage and tame unbelievable amounts of complexity.

It is a given that IT decision makers are always divided about the ways and means to achieve business transformation. Who, do you believe, are going to be your next big set of customers in India who will buy the BMC “digital transformation through applications” story? Every big corporation or government agency recognizes that the way they communicate is changing dramatically. The power of analytics behind decision making will be real time, at the speed of light. Look at the famous example: The first version of disruption that happened in the automobile industry is the NY taxi driver. What we are seeing now is the ‘nexeneration’ of this phenomenon. The New York Times, for example, has an augmented app driver. Almost every industry is going to be transformed by augmented ‘X’ (fill in the blanks). The next five years are going to see crucial changes which will happen at a frightening pace.   Organizations will experiment and evolve their model for digital transformation and the application layer will be indispensable to the process. I don’t see why Indian enterprises should be any different.

BMC has been talking about the partner ecosystem playing a vital role in increasing bandwidth and profitability in 2015. The company has not been known to be very tier-2 channel dependent. How will things change now and what part of the global revenues will be tied to the channels? Our channel map is clear. The distribution partners will continue to focus on the SMB. In North America and Western Europe, we will still be direct, and combine our distribution business. As far as customer value and delivery is concerned, we have three different types of partners. The GSIs such as Accenture, HCL and TCS have and will continue to help spread out to all types of customers to points where we will not go direct. Gavin (Selkirk), who heads our APAC channels, will engage with the partner ecosystem extensively to further the business. Besides these, we have strong technology partners such as Microsoft and Salesforce.com, with whom we have technical alliances where we want to deliver interoperability for competitive advantage. It helps that we are neutral and our objective is to foster interoperability in heterogeneous environments. We have partners in specific areas such as IoT. We might partner with these companies to use their technology, or pay them to use their technology and so on. In the SMB sector, we will certainly engage with partners and will not be direct.

How strong will the SMB business be for BMC? BMC has a strong customer footprint, having a total of 27,000 customers over 130 countries, and by definition, the bulk of these will qualify as SME/SMB. However, in terms of revenues, most of it will be skewed towards the top set of accounts. This matrix will not change. The other thing that will happen, even at the enterprise, is making technology available without high-touch. We recently received an order from Go-Pro for Workflow Automation. We do not recall any BMC person having gone there, or having conducted meetings; the entire process was executed online. I think we will see more of that.

How will Customer Connect and BMC Marketplace fit into the new BMC messaging and strategies? They will continue to remain big pieces of the overall strategy. Right now, we haven’t made any big changes in any of these. Paul Appleby runs our worldwide sales and marketing group. He focuses on partners and the channels. During the course of 2015, we will have more to say about specific changes in our partner program since we have started spending more time with the SMB and indirect business.

The newly appointed CTO at BMC Software reports directly into you. Is this a strategic move, given the new messaging of the company? Well, the CTO, as a matter of tradition, always reported directly into me. Phil Harris joined us recently from Cisco, and heads the BMC IT organization.  He is assisted by the vice president in driving the IT organization.  They helps us map the future architecture, the product mission. The organization is about the integration of our products and platforms, not just stand alone solution sets.

BMC Software says its new Customer Experience Center (CEC) in Pune is setting new standards. What are the strategic differentiators that the company will acquire by establishing this CEC? BMC Software India’s Pune R&D center hosts the entire ecosystem of the organization, including R&D, customer support, global delivery, finance, human resources, and procurement. The premise of setting up the CEC in Pune, India, is to attract visitors across the globe, and demonstrate to them the product capabilities first-hand, in real time, and in a world-class environment. Effectively, the CEC stands to complete the trilogy of customer, partner, and solution provider. The CEC brings visitors face-to face with this vision by allowing them to experience the amalgamation of technology and manpower through the Network Operation Center (NOC) located in the CEC. One of the interesting elements of the NOC is that it seeks to raise the bar with its state-of-the-art manning facilities that just require a single human interface.

So, is BMC India one of the fastest growing markets for BMC Software in APAC? Over the years, BMC India has grown to become one of the largest sites of BMC Software, and it has conducted over a dozen employee engagement programs.  Having said that, we do not single out or silo any of our markets. We see India to be as important or significant as our other markets in APAC and elsewhere; the idea is to have “revenue influencers for global growth”, than talk about numbers, no matter which geography. A case in point is the CEC, which is a strategic global enterprise for us; a center that delivers products and services that serve the entire world.

How will BMC Software do things differently for customers in 2015 that will distinguish the company? Our goals for 2015 would be to accelerate our growth by helping customers deal with two-speed IT, innovation at the edge, revenue generating applications of the digital era, while optimizing the cost model across the business. 

Shantheri Mallaya is an assistant editor for IDG India. Send your feedback to shantheri_mallaya@idgindia.com. Follow Shantheri on Twitter at @Shaanemaan.