Q&A: BMC's CEO talks up products, profits

Computerworld - BMC Software Inc. last week announced strong second-quarter results, including a 7% year-over-year increase in revenue to $387 million. BMC's CEO, Robert Beauchamp, predicted in an interview that the Houston-based company would see higher revenue for the rest of the fiscal year. BMC, which makes systems management software, is pressing ahead with its Business Service Management products, said Beauchamp, who has been with the company since 1988 and its CEO since 2001. He spoke with Computerworld about the company's success, and its plans to continue that success.

Excerpts from that interview follow:

Given your company's recent financial success, why do you think IT pros like your products? It started four years ago when we conceived Business Service Management products. We knew that the Information Technology Infrastructure Library [ITIL] and IT process optimization was going to become a central focus of IT. So we built an entire product portfolio and a whole strategy around software to manage IT processes and ITIL optimization. We saw in the last quarter that Chevron has a strong initiative around ITIL implementations trying to consolidate their service desks around the world. It resulted in a seven-figure transaction for us. We won [that work] over HP and CA. In the last year, CIOs now talk more about IT process improvement than about infrastructure. We saw a 30 % growth in our BSM product line this quarter.

So, why are you better than HP, CA or IBM? The honest answer is that we have, by far, the best products and, by far, the largest share of sales of IT service management software. We're winning the bake-offs against competitors on software technology and expertise. We were out the gate first in April 2003 when we announced BSM, and nobody else was even talking about it.

Is the revenue pie for these products suddenly bigger, or are you getting a larger piece of the pie? It's both. We're seeing IT organizations say, "Let's go update service management environments with new Web-based technologies and let's use ITIL." Nobody was even talking about ITIL outside of Europe four years ago.

But could your increased revenues also be a result of the fact that IT shops have loosened the purse strings after the long recession? Oh, the recession, I don't even want to think about those days. Now we're seeing people turning their focus back on IT. BMC was listed in a recent survey among those vendors who would gain from IT spending, with Microsoft and others.

Is there also a change in philosophy among CIOs who weathered the recession and now want to make a strategic shift in how they spend money? Well, I think that there is still pressure to reduce costs in IT. A large government agency that is a customer told me last week that it views spending on IT as non-mission-critical, but they see with service center and IT standardization software they can pull $25 million out of IT and give it back to use for mission-critical needs.