CEO switch continues BMC's multi-cloud management push

Executive changes at BMC put a familiar face back in charge, in an ongoing reinvention to make BMC a multi-cloud management vendor to help enterprise customers adopt modern computing architectures.

Former BMC chairman and CEO Bob Beauchamp has returned as interim president and CEO effective immediately, as Peter Leav, who served as CEO since 2016, has left to take "a planned career break," the company said.

Beauchamp, who also will sit on BMC's board, started as a salesman at BMC in 1988, rose to the role of CEO in 2001, and remained in that role as BMC went private in 2013 in a $6.9 billion deal. Leav took the helm in 2016 to see the company through its next stage of growth, the company said at the time. That included KKR's purchase of BMC in 2018 for a reported $8.5 billion.

BMC once was known as one of the "Big Four" companies in IT service management (ITSM) software alongside Hewlett Packard Enterprise, CA Technologies and IBM. Like its rivals, the company has shied away from the ITSM identification label in recent years and positioned itself as a specialist in multi-cloud management. Growth prospects were bleak at the time of BMC's initial move to go private; it posted $2.2 billion in revenue during its fiscal 2013, up from $2.17 billion the fiscal year prior.

Bob Laliberte

In recent years, those Big Four have undergone significant changes and revamped their strategies to remain relevant in a market where cloud computing -- not mainframes and traditional data center architectures -- is in vogue, and cloud infrastructure vendors offer an ever-greater range of management and governance tools. Besides BMC's two private ownerships, HPE sold off many of its software assets to Micro Focus for $8.5 billion in 2017, while Broadcom bought CA Technologies last year for $18.9 billion.

BMC still has a substantial menu of traditional ITSM products, embodied by the Remedy Service Management Suite at the large enterprise level. It also offers a version called Remedyforce for the midmarket and Track-It for small companies.

BMC sees challenges in ITSM from the likes of ServiceNow, which offers an array of cloud-based applications and has experienced rapid growth in value. BMC has also modernized its older software, such as the Control-M data management tool, to address new trends in DevOps practices.

BMC's multi-cloud products, meanwhile, cater to areas such as workload migration, performance monitoring, cost management, security and workload automation.

CEO change comes at inflection point for BMC, customers

Today, BMC is in a good position to grow both organically and through mergers and acquisitions under Beauchamp's leadership, according to a KKR statement, although it provided no examples. However, a BMC executive gave some clues into the company's acquisition plans in a Bloomberg interview last year, describing an appetite for potential deals worth up to "tens of millions [of dollars]."

Stodgy companies understand some [infrastructure management] problems better than the new ones, because they helped create them.

Still, Beauchamp is officially an interim leader, and his influence may be limited if BMC's longer-term goal is to attract a CEO with fresh ideas for both the business and for customer service.

Hybrid computing environments are the norm in the modern enterprise. Recent survey data from Enterprise Strategy Group (ESG) in Milford, Mass., shows that 58% of respondents use IaaS -- and within that, half run production applications on such services, ESG analyst Bob Laliberte said. Moreover, 76% said they use more than one public cloud.

"BMC clearly has a strong background on the on-prem side, but they will need to expand to cover major cloud vendors to take advantage of the opportunity to deliver overall management," Laliberte said. BMC also must focus on customers' need for edge computing management, he added.

Maribel Lopez

There is indeed a role for BMC to play in today's market, to help enterprises navigate challenges around infrastructure management, said Maribel Lopez, principal of Lopez Research in San Francisco. "Peoples' environments have become very unwieldy," Lopez said.

Some enterprises view BMC, like some of its traditional competitors, as a stodgy company that wants to reinvent itself, but actually, that offers a counterintuitive strength, she added.

"Stodgy companies understand some of these problems better than the new ones, because they helped create them," she said. "They have people that can be tapped to figure out legacy stuff versus born-on-the-cloud stuff."