BMC buys app management vendor for $150M

IDG News Service - BMC Software Inc. has offered $150 million in cash for Identify Software Ltd., an Israeli vendor of application problem-resolution software, and plans to build a transaction management business division around the acquisition.

The company's goal is to monitor and manage transaction-based applications, identify bottlenecks and errors in business applications, and locate their cause -- regardless of platform -- said Bob Beauchamp, president and CEO of BMC.

A transaction "may begin on someone's Web browser and may traverse through Windows servers, mainframes to Linux servers. To do transaction management right, you have to be able to diagnose where the problem lies," Beauchamp said. And that's a complex task.

"The reason we are buying Identify is, we couldn't figure it out. They figured it out before we did," Beauchamp said.

Identify's software helps trace problems in transaction-based applications across multiple platforms, including J2EE and .Net. It will be integrated into products, including BMC's Remedy line, said Yochi Slonim, Identify's president and CEO.

The deal will not affect Identify's relationship with Microsoft Corp., Slonim said. Identify's code is deeply integrated with Microsoft's software development tools, but BMC is not a competitor in that market, he said.

The acquisition gives BMC a boost in the J2EE and .Net market by allowing BMC to add control and management at a more granular level, according to Richard L. Ptak, an analyst at Ptak, Noel & Associates.

"Now that mainstream enterprises have deployed J2EE applications, they are dealing with the difficulties of managing a modular application architecture distributed across multiple tiers," he said. BMC already has tools that help resolve problems by mapping the topology of J2EE applications.

"Identify brings transaction recording to the table, which gives administrators the ability to replay the actual problematic transactions," Ptak said.

By acquiring Identify, BMC is also preparing for a time when businesses will have virtualized their applications and adopted a service-oriented architecture to make it easier to change and recompose them, Ptak said.

"IT will need solutions to manage the performance of dynamic applications that run on dynamic hardware resources and are integrated in dynamic ways," he said.

BMC will be able to automatically discover how infrastructure is configured, even as it changes day to day, with its BMC Discovery Solution, while technology from Identify will allow it to track changing transaction paths through the infrastructure. "Customers that buy today's solutions are also getting the technologies in place to solve future problems," Ptak said.

The deal is not yet complete; it is subject to customary closing conditions, including the approval of shareholders.

Houston-based BMC expects the transaction to close during the second quarter of this year.