BMC Software: Sweating the Big Stuff

Software customers say the company's Patrol product can be tough to deploy. Once in place, they say, it successfully monitors critical applications.

Deploying BMC's Patrol can be an unexpectedly onerous task, but most customers say it's worth the hard labor because of the software's deep—and broad—ability to monitor every critical application in an organization.

"When you bring on a product like BMC, you feel some pain," says Steve Huffman, information-technology director of Memorial Hospital & Health System in South Bend, Ind. "Even if the product were free, there's a monumental cost in getting it up and running and configured properly."

Two years ago, Huffman's group spent roughly six months rolling out Patrol for about 50 AIX, HP-UX and Windows 2000 servers, which run its PeopleSoft and Cerner health-care information systems. The project involved training systems administrators on Patrol and figuring out which metrics to gather from each server. The key benefit, Huffman says, is that Patrol provides the same view to both the operational staff and senior information-technology managers. "It's one tool for everybody," he says.

Unlike major competitors, BMC offers tools to emulate how an application will handle additional load and pinpoint where bottlenecks will likely occur with Patrol Perform & Predict, says Boris Gdalevich, capacity manager for Quest Diagnostics, a medical testing company in Teterboro, N.J. "Lots of tools analyze trends, but not many provide the ability to predict," he says.

But some BMC customers have hit serious potholes. John S. Camp, chief information officer at Wayne State University in Detroit, says that four years after initially rolling out Patrol, his group still has difficulty getting it to work properly in the university's 80-server data center. He says problems with Patrol have included an agent that "went haywire" on an IBM supercomputer and the software's inability to collect information from a Windows NT server cluster.

Camp says BMC was responsive and that the company's professional services group tried to hammer out the kinks. In the end, however, "It just turned out to be more difficult than I thought it would be," he says. "In a nutshell, we probably took on too much."

Dave Wagner, BMC's director of enterprise assurance solutions, says such cases typically are the result of a company that's overly ambitious. "If you find a customer who's been struggling with an implementation, they probably don't have the level of maturity they need," he says.

Application Performance Management BMC Software 2101 City West Blvd., Houston, TX 77042 (713) 918-8800 www.bmc.com Ticker: BMC (NYSE) Employees: 6,400 Bob Beauchamp President, CEO A 16-year company veteran, the Texas native was appointed CEO in January 2001 after serving in various roles at BMC, including head of research and development. Mary L. Smars VP, Enterprise Service Management Heads the business unit that produces the Patrol family of management software; she joined the company in 1989. Products Patrol Perform & Predict provides real-time and historical analysis of server performance and can estimate the effects of changes to the infrastructure. Patrol End-to-End Response Timer measures application performance by simulating transactions from desktop computers. Knowledge Modules for Patrol monitor application-specific metrics for individual applications. Reference Checks Nielsen Media Research Bill Bridges Manager, Systems Assurance bill.bridges@nielsenmedia.com Project: TV ratings company uses BMC Patrol to monitor 200 Windows and Solaris servers that run its proprietary data-gathering applications. Men's Wearhouse James Tran Senior Analyst jtran@tmw.com Project: Houston-based clothing retailer, which has used Patrol since 2001, has found that the server agents in Version 7 consume less server processor capacity than their predecessors. Wayne State University John S. Camp CIO john.camp@wayne.edu Project: After four years, the university hasn't been able to get the product to work as expected in its heterogeneous data center. Quest Diagnostics Boris Gdalevich Capacity Manager (201) 729-7497 Project: Medical testing lab uses BMC Patrol because it can monitor the company's diverse mix of servers and applications, including Oracle, Sybase and Microsoft SQL Server databases. Memorial Hermann John F. Barr Lead Systems Architect john_barr@mhhs.org Project: Uses BMC Patrol because it supports OpenVMS, the operating system that runs the Houston hospital's medical-information systems. Southern Co. Joe Allen Principal I.T. Analyst (404) 506-4873 Project: Atlanta utility used BMC tools to rapidly locate the source of performance problems in an Oracle database, running on an IBM OS/390 server. Executives listed here are all users of BMC's products. Their willingness to talk has been confirmed by Baseline.

BMC Software Operating Results*

2004FY 2003FY 2002FY Revenue $1.42B $1.33B $1.29B Gross margin 94.4% 93.5% 92.6% Operating profit/loss -$98.9M $21.2M -$283.6M Net profit/loss -$26.8M $48.0M -$184.1M Net margin -1.9% 3.6% -14.3% Earnings per share -$0.12 $0.20 -$0.75 R&D expenditure† $586.1M $489.9M $479.2M

* Fiscal year ends March 31
† Includes support expenses
Source: company reports

Other Financials**

Total assets - $3.04B
Stockholders' equity - $1.22B
Cash and equivalents‡ - $908.9M
Long-term debt - None Shares outstanding - 227.9M
Market value as of 6/25 - $4.02B
** As of March 31, 2004, except as noted
‡ Includes short-term investments