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BMC has unveiled its plans to separate its current organization into two independent software entities. One will concentrate on its established mainframe operations, while the other will specialize in tools for managing IT and distributed systems.

Based in Houston, BMC has been under the ownership of global investment firm KRR since 2018. The company retaining the name BMC will oversee the mainframe and software automation technologies, which include BMC’s Intelligent Z Optimization and Transformation (IZOT) and Digital Business Automation (DBA) divisions. Meanwhile, BMC Helix will cover the Digital Service and Operations Management (DSOM) sectors of the business.

“We have determined that the two companies will better serve their markets individually. Each of these businesses has its own profile and characteristics in growth opportunities, margins and profitability, and competitive landscape. We are confident that the underlying economics of both businesses sets each company up to continue driving innovation and growth for long-term success,” commented Ayman Sayed, president and CEO, in a statement.

This strategic initiative is anticipated to benefit both organizations and their clients, according to industry experts. Initially, the split will enable each company to operate more flexibly and focus resources on their specific areas of expertise. Additionally, customers utilizing the various product lines will gain from the greater attention and specialization, according to analysts.

“One organization is set to focus on its mainframe operations, which represent around two-thirds of the overall revenue totaling $2.3 billion, equating to approximately $1.5 billion. The second organization, BMC Helix, will manage its distributed operations, amounting to about $800 million in revenue. The competition primarily involves Broadcom, BMC, and IBM, along with several smaller entities specializing in various mainframe areas,” states Stephen Elliot, group vice president at IDC.

“Clients should anticipate advantages from the enhanced focus,” Elliot remarks, highlighting a more dedicated allocation of personnel, budgets, and resources. “Previously, as a single entity, BMC was attempting to stretch a limited research and development budget across numerous product requirements,” he explains.

The newly separated firms are expected to enhance their product development capabilities in their individual focus areas, free from internal debates regarding feature prioritization, thus fostering innovation for both the mainframe and distributed sectors more rapidly, Elliot asserts.

This strategic realignment may also facilitate partnerships that previously seemed impractical while different product branches operated under one umbrella, Elliot points out. “It’s important to recognize that by splitting into two businesses, each one has the opportunity to collaborate with vendors that were once perceived as rivals and previously difficult to engage. This development creates intriguing political dynamics,” he adds.

BMC highlighted that the separation will enhance the experience for both customers and partners through a refined focus for each entity. “Our clients and partners depend on us during their transformation journeys to accelerate business processes beyond human capabilities. In our role as a strategic partner driving continuous innovation across their mainframe, distributed, cloud, and edge technology requirements, establishing two distinct companies places them at the heart of each company’s objective, complemented by enhanced specialization and attention to specific industry sectors,” Sayed articulated in the statement.

“Moreover, it’s important to acknowledge that this development offers KRR two potential financial exits—along with the increased focus allowing each firm to possibly achieve greater growth rates, which subsequently boosts their overall valuation,” Elliot remarks.

Founded in September 1980, BMC Software originally specialized in developing software for IBM mainframe systems. A decade later, it broadened its offerings to encompass other platforms, including Windows. In May 2013, BMC disclosed plans to be acquired by a consortium of significant private equity investors, and by October 2018, KKR, a prominent global investment firm, had completed the acquisition. BMC made its debut as a public entity in 1988 but was delisted in 2013. In 2023, BMC filed confidentially for an IPO.

BMC indicated that the transition to two independent software firms is anticipated to commence in early 2025.


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