How BMC’s CEO plans to cut your IT costs by a third

More than two years after going private, a revitalized BMC is focusing squarely on enabling your company’s digital transformation.

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Two different ways. The first is we assume all of our customers are going to be using both public and private clouds to augment their existing on-prem systems. All of our products are designed to manage services. Heterogeneity used to mean different operating systems and different databases. Today, heterogeneity - which is what we really manage, heterogeneous environments - assumes the customer has components of their application on {Amazon} AWS or Azure or the Oracle or SAP cloud, as well as in their data center. We manage those and the data center seamlessly.

The other thing we do is offer our own products as a cloud offering, as a service. TrueSight Pulse is SaaS-based monitoring for web-scale applications and infrastructure. You can have it up and running in minutes and you can deploy it against your legacy systems inside your own data center or you can deploy it against AWS or Azure applications and manage inside those environments in a matter of minutes. We’re writing our software to give customers a single product portfolio that can manage into private clouds, public clouds and legacy systems seamlessly.

What percentage of your revenue today comes from cloud-based offerings versus traditional packaged and licensed software?

We don’t break it out, but I’m going to try to tell you without giving you numbers. The difficulty in answering that question is that many of the world’s largest global outsourcers and systems integrators use our Remedy platform. They host it and offer it as a cloud service to their customers. To the customer, it’s a cloud service but to the outsourcer systems integrator, they’re running it on their cloud. The global outsourcers are very large, if not our largest customer set. They use it themselves. We have probably over 1,000 customers that are using our cloud-based IT service management products.

When you’re talking to customers, what do you tell them they’re going to gain if they follow the path you’re laying out? What percentage change in costs or streamlining?

First we’re going to give customers the ability to move very rapidly. We’re going to give them agility. They’re going to be able to move to the cloud, to move their legacy systems to cloud-based systems very rapidly. We’re helping them with migrations to take advantage of cloud-based technologies and we’re going to give them high reliability. We’re going to give them a system that can manage the service wherever it may be – components of that service they’re running on-prem, components that are running in the cloud. We’re going to give them a single system to manage across all those environments.

The other thing we’re going to give them is massive cost savings. My general rule of thumb is that if we’re not saving 30% a year of the way you were doing it before, we’re not doing our job. We have to be able to help customers cut by about a third the cost of the way they were doing it or improve the agility by a third. That’s a rule of thumb. That’s what we shoot for.

What work remains to be done to flesh out this Digital Enterprise Management strategy?

In each of our product areas we’ve done a really good job of modernizing the portfolio. You see that in our top-line growth and in our win rates. We’re winning consistently against the competition. A few years ago, companies like ServiceNow and others were taking share from us as we didn’t have yet full SaaS capabilities and cloud capabilities. Today we do and, as a result, our win rates are extraordinarily high. In the next year we’re going to be focused on the horizontals across the products, making the integrations between the portfolios better - things like a common data architecture, data planes, shared analytics engines, shared end-user experiences so that if you pick up any BMC product you know it’s a BMC product because they all interoperate in a more seamless fashion. Helping customers implement IoT is something I think you’ll see. We’re working on it with some very large customers. BMC wants to be a leader in that.

What’s been the most difficult part of making this change?

The most difficult part of all corporations is people. Change is hard and it’s one of the reasons why I’m glad we were able to bring in new people. It helps change some of the culture from being a slow-growth company with huge margins to being a high-growth company with good margins. In order to do that, we really had to focus on innovation and growth and going to where the new hot areas of the IT landscape are and investing heavily in those. We’ve had to make some tough decisions. We’ve had to invest in areas that we know are not going to be the most profitable areas for us because we have to grow in those areas. The first few years are going to be about growth and not about profit. It’s making those decisions, investing heavily and getting the entire team to row in the same direction.

How has this changed the competitive landscape?

It’s changed the conversation with the customer so that we’re not talking about individual point products as much. We’re talking about how those products work together. You mentioned ServiceNow. If you’re talking about a service desk, that’s one thing. But with Digital Enterprise Management we’re talking about a mobile client that can request services and it ties to the IT service management which then kicks off the automation that actually does the provisioning of the systems, then the monitoring tool to monitor the performance and availability of those systems and the tuning of those systems. It brings the power of the breadth of our portfolio together so when BMC goes to the customer, we’re not talking about just a service desk. We’re not just talking about a monitor or a service catalog. We’re talking about how those things come together and give the customer a platform for managing their massively complex digital enterprise – which every customer is now having to deal with.

We give them a platform to manage it and not death by a thousand products, which is what our competitors today have to deal with. You buy this bit from me and that bit from another company and that bit from another company and if you’ll buy these 30 products from 30 different companies you’ll have a great solution. BMC tells the customer: ‘We can give you a platform from one company that can do it better or as good as any one of those components and our goal is to be better than all of them’.

Bob, is this changing your partnership strategy as well? Does this open up the doors for different partnerships to get you in to customers?

Let me give you an example: Internet of Things is such a huge, complex topic that BMC, while we deliver great technology to do that, we need [companies] like Capgemini and Wipro and other partners to help us with designing and deploying these systems because there is a lot of process and business process reinvention involved and new business creation. We’re probably more attracted than we’ve ever been to those companies who advise clients on business process redesign. That’s an area that our products enable but that we need partners to help implement these global platforms.

One of the other areas that’s hot today is DevOps and I know that you have focused on this area. How are you helping customers realize that DevOps vision?

Maybe the hottest thing we’re doing right now is a slight variation of that. We call it SecOps, security operations, and it’s like DevOps but focusing on vulnerability management. As you know, the big hole in enterprises has to do with either Day Zero or, more often, known vulnerabilities in existing infrastructure. We all know about the retailer that got hit through their HVAC system. It doesn’t take more than a few hours to find that most enterprises have either back-dated versions of operating systems, databases or network software with known exploits. The bad guys can go in, take control of your systems and steal your data for months and months before they’re found. BMC has the capability now to discover your platform, how your systems are designed, what operating systems, what databases, what versions you’re running on, then through partnerships with people like Qualys, we’re able to tell you which one of your software or hardware components has known vulnerabilities.

The really important part is we then prioritize those. Do you want us to do it? If you say yes, our software can patch those solutions. I was with a bank in Germany recently that told me when Heartbleed came out, in the course of less than two days, they were able to use our security operations product to patch over 30,000 servers and close that out so they didn’t lose data. BMC is really the only company out there that can provide powerful patching, provisioning, prioritization and diagnostics of your vulnerability exposures.

Bob, what should customers expect from BMC in 2016?

They should expect some incredible innovation. You’re going to see even more new products coming out, each one focused on managing the cloud and helping the customers get to the cloud quickly. We’re going to change the experience that all digital workers have today by providing them a true digital workplace. Our technologies are going to be leading edge, innovative solutions to help them deploy their own digital strategies.

Is there anything important that I didn’t cover?

The only thing I might mention is our mainframe business. Today it is less than 25 percent of our business but even there we’re continuing to innovate. We’ve come out with multiple products [recently] on the mainframe and they’re growing incredibly fast – in fact, they are some of the fastest growing products we have. These new products we’ve come out with are helping customers cut their MLC [monthly license charge] prices dramatically. We just came out with a new suite of next-generation DB2 utilities. We’re continuing to invest in the mainframe, even though it’s not a high growth area for the industry. CA and others appear to be walking away from the market. We’ve been investing in it and it’s resulting in really solid growth. I don’t know a single bank today of size that isn’t still running mission-critical systems on mainframe. When we promise customers we can manage from the mainframe all the way through distributed into mobile, we can and we’re committed to it. Where others are picking little pieces of the enterprise, we give them a platform to manage all of it.

This story, "How BMC’s CEO plans to cut your IT costs by a third" was originally published by Network World.

Copyright © 2016 IDG Communications, Inc.

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