‘HP-EDS combine will create more opportunities than challenges for BMC’

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: Being a leading enterprise management solutions company, the $1.73-billion BMC is not distracted by shrinking hardware margins. It has an equivocal focus on providing enterprise software solutions that allow customers to more effectively manage their IT infrastructure. Echoing these sentiments is the company president and CEO, Robert ‘Bob’ Beauchamp. Undeterred by the HP-EDS deal, he says, “Business software management (BSM) is in our blood; it’s our DNA.” Joining the company in 1988 as a sales executive, Beauchamp rose rapidly, serving in key leadership positions in research and development, strategic marketing and corporate development. In a recent chat with Rachana Khanzode, Beauchamp talks about the company’s plans to take on the HP-EDS combine and the growing importance of BSM solutions among Indian enterprises. Excerpts:

How important is India in BMC’s revenue model? How much does it contribute to BMC in revenue?

India is a key growth engine for BMC and it is one of the fastest growing regions for the company. In terms of employee numbers, it is the largest BMC office in the world outside of the company’s headquarters in Houston, Texas. That really reflects how critical India is to BMC’s strategy.

BMC employees in India participate and provide support for R&D and different internal initiatives. Employees play a key role in the design, development, maintenance and support of BMC’s software products and solutions.

In addition, we continue to actively elevate and evolve our operations in India to include significant intellectual property creation, including architecture and other strategic, foundational programmes. Being one of the world’s fastest growing economies, we are witnessing accelerated demand from Indian businesses, driven by an increasing number of international investors outsourcing their IT services to Indian companies. In addition, the fast-growing local companies are expanding their global footprint. Companies such as Tata Motors are seeking to gain more control over expanding infrastructures.

Is the demand driven by outsourcing companies and those expanding globally?

BMC’s presence in India will continue to grow with an increasing number of sales professionals, implementation partners and R&D professionals added to the company. Already, we have seen significant uptake of our solutions by consulting firms like HCL, Infosys, TCS and Wipro, as well as with companies such as Tata Motors, Reliance Communications and Idea Cellular. For the coming years, as Indian enterprise businesses continue to grow and mature, we will gain further traction in vertical markets such as financial services, telecom, business process outsourcers and large manufacturing organisations.

How does the merger between HP and EDS impact BMC?

Whenever you have a deal of this size, it certainly changes the business landscape. However, BMC continues to be the top choice of customers and partners looking for business service management (BSM) solutions. In many ways, the EDS deal appears to be a competitive move by HP, primarily to become more competitive with IBM but also with Accenture, Cap Gemini, CSC, HCL, Infosys, Tata, Wipro, and other major players in terms of global services and outsourcing. BMC’s focus is solely on software and more specifically BSM and service automation, and every day we hear from customers that appreciate this focus.

Does this new partnership create any challenges for BMC?

I see the HP-EDS acquisition presenting inevitable questions concerning HP’s commitment to their software business. For HP, software continues to be a very small percentage of its total business, and as such, it is frequently seen as an afterthought or convenient add-on to secure larger dollar services or hardware deals. They say they are committed to the space, but in buying EDS, HP just bet the farm on services. With their focus on a new $14-billion cash cow, will their software business get lost in the larger HP shuffle once again? I think it’s likely that it will. As a result, I believe that the HP-EDS combination will create more opportunities than challenge for BMC.

Firstly, EDS has partnered with BMC in the past, sometimes replacing already-installed HP software. EDS has publicly stated that it will remain technology neutral under HP, and if they stay true to that course, BMC will continue to have opportunities to gain business through EDS.

Secondly, EDS has always been a customer of BMC’s mainframe management solutions—a vital area that HP’s existing software stack neglects. When it comes to mainframe management tools, HP is not an option.

Thirdly, the real advantage for BMC is that, many systems integrators now view HP as a direct competitor. I have spoken with senior executives from the large firms and they clearly see it this way. And clearly, the EDS acquisition puts HP in more heated competition with these India-based system integrators.

Will BMC continue its relationship with EDS?

The world’s largest outsourcers rely on the core components of BMC’s BSM solutions. Throughout Asia-Pacific, BMC has become the de facto standard for the major outsourcers, including EDS, Unisys, Cap Gemini and Accenture.

Despite their acquisition by HP, BMC will continue to work diligently to deliver the same products and support to EDS that we always have.

Your main competitor in BSM and service automation is HP—a much larger company. Why should customers look to BMC for these solutions?

First and foremost, BSM is in our blood. It’s our DNA. While others are out there building their empire of services and hardware, we remain focused on one thing—business service management. And there are many customers out there who will tell you we do an excellent job at it.

HP is still trying to play catch up to the solutions that BMC is already providing. Even with HP’s aggressive and costly acquisitions, they are still many, many months behind. And while they work to renovate and integrate, we continue to innovate.

BMC is not distracted by shrinking hardware margins, integrating a large services company or by fighting other internal businesses for R&D investments.

BMC is singularly focused on providing enterprise software solutions that allow their customers to more effectively manage their IT infrastructure from a business perspective.