BMC Software has big role in Cisco server foray
By BRAD HEM Copyright 2009 Houston Chronicle
March 16, 2009, 4:28PM
Cisco’s bold entry into the computer server market today included a prime role for Houston-based BMC Software.
BMC’s server management software will included in Cisco’s new unified computing system, which the San Jose, Calif.-based company has been secrectly working on for two years. Cisco’s move into the server business puts it in direct competition with the likes of Dell, IBM, Sun Microsystems and HP, which has the vast majority of its server operation in Houston.
It also raises BMC’s profile in the server automation industry, and should also elevate BMC’s revenues in the future, said Richard Sherman, an analyst at MKM Partners. BMC already was one of the top data center automation players, along with companies such as HP, IBM and CA.
“I think it elevates BMC, certainly,” Sherman said of the Cisco deal.
BMC played a prominent role in Cisco’s announcement this morning. BMC CEO Bob Beauchamp talked up the deal on television, saying Cisco would change the data center business the way Apple’s iPhone changed the wireless business.
BMC wouldn’t speculate on the effect the partnership would have on the company’s revenue, said Kia Behnia, BMC’s chief technology officer.
Cisco first discussed the possibility of working with BMC on the project last summer, not long after BMC’s $800 million acquisition of data center automation software company BladeLogic one year ago today, Behnia said. BMC executives “were completely blown away” by Cisco’s plans, he said.
The BladeLogic buy was an important precursor, Behnia said.
“We foresaw that automation would be top of mind,” he said. “Obviously we couldn’t see what new hardware offerings there would be.”
Cisco talked to other service automation players, and selected BMC after listening to recommendations from customers the companies shared, said Jackie Ross, vice president of marketing for Cisco’s server access and virtualization business unit.
“We polled the audience basically,” she said. “BMC’s BladeLogic product showed up repeatedly. That enabled it.”
Ross declined to discuss the deal’s structure, including what percentage BMC would get of sales. BMC’s software will be included with Cisco’s system, but customers will have the option of using other software, she said.
While today’s news represents a big opportunity for BMC, it means more competition for HP’s Houston-based server business. Ross said Cisco thinks there is enough room in the $85 billion-to-$120 billion market for a new player, but HP isn’t so excited.
“That’s great, but I hope they take it all from Dell, IBM and Sun,” said Jim Gaunthier, marketing vice president for HP’s enterprise server and storage business.
He said Cisco will have to play catch-up to compete with the other players.
“They have a vision for tomorrow on something that we are delivering today,” he said.
brad.hem@chron.com
