IDG Enterprise CEO Interview Series: BMC CEO Bob Beauchamp and CTO Kia Behnia

BMC CEO Bob Beauchamp emphasizes greater IT automation

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Beauchamp: Absolutely. When you take Blade and you add it to our network configuration automation product, and you add it to our run book automation product, you have the core of the automation suite. One of our competitors says they're all about cloud, but they have no automation tool. They've got all sorts of management widgets, but you can't provision a cloud. Without BladeLogic, we would not have been able to provision clouds. We would not have had the relationship with Cisco. We would not have been involved in as strategic a relationship as we have with Dell. We wouldn't be as involved as we are now with Accenture and Capgemini and CSC and Wipro and most of the global outsourcers and systems integrators.

How do these partnerships go beyond the usual marketing slogans -- are they having a material impact on the bottom line?

Beauchamp: It depends which ones. We won an order last December, one of the biggest orders in our history. Accenture was very involved in that deal. They are actually doing the implementation of our software. The two of us worked together on that deal. Accenture views us very importantly, as their management partner in many cases. You can't say it was just the direct sell through that was material. It was the influence and the relationship. You can tell a similar story around CSC and about many of the Asian outsourcers and systems integrators.

What can you tell us about the Cisco deal? What are you seeing through your work with Cisco? Are they successfully moving the Unified Computing System (UCS) product into organizations?

Beauchamp: I think they said somewhere around 900 UCS boxes had shipped. That's their number, not mine. We'll just call it north of 100 in terms of how many that [our products] were sold with. That number is not bad in my opinion, considering the fact that such a high percentage of the UCS boxes are proof of concepts. Lots of companies are doing pilots. We will be a lagging indicator. As they start to go from proof of concepts into heavy production, that's where we're going to play. Until you see a giant chemical company throw out one vendor and go with a huge UCS, we won't get huge orders out of that. So that's part one.

But part two with Cisco is that because we're doing this relationship with them, our whole management stack is interesting to them as it relates to cloud initiatives and partnering and where they're engaged with the customer. So we partner with them in the field level, on a daily basis with them on very important customer initiatives where they're working on large deals or we're working on large deals.

By the way, we do the same thing with Dell. We work with Dell on deals. They're focused a little more on midmarket. But we're working with both of them.

You've done a lot of acquisitions over the years. And we talked to (Cisco's) Chambers recently and he claims that 90 percent of his acquisitions have been successful compared to a 30 percent industry success rate. How have you done with acquisitions? How would you grade the company? What have you done well? What could you do better? And where do you go from here?

Beauchamp: I think we have done exceptionally well with acquisitions. I don't know that I have a number, but the ones that really mattered have gone very well -- certainly in the last 10 years. Look at Remedy: Not only has it changed BMC, but the whole industry's had to respond to that. By linking it with our systems management products, the whole concept of smart trouble ticketing [has really taken off]. We paid an extremely good price for that company. And by the way, the guy that wrote the software, the founder, is still with us.

The next big one we did was BladeLogic. And Blade has transformed us again, just at the right moment, just as virtualization was coming online, just as cloud computing was coming online, and automation was coming in. We had an initiative to develop a similar technology internally. We had a plan. We had dates. And ultimately we just looked at build-and-buy and said, this train is leaving the station and the risk is high for us; we will be too late if we don't hurry. And Blade was clearly the best asset, so we went and bought Blade.

What I probably can't do for you is make all 30 years of acquisitions make sense, because we went through different phases in the different times that we did these things. In the last 10, since I've been the CEO of the company in January 2001, we were at a crossroads. When I met with the board I told them, I said, look, we're going to have to reposition ourselves. We've got great products. Customers generally like BMC. We've got competitors they don't like so much. But this industry's going to change, and we're heavily mainframe-dependent. And the market's going to change. Who are we going to be in a few years?

We began to develop this BSM strategy. And we literally took a single sheet of paper -- I think it was the July 2002 board meeting where we said, this is where we think it's going, and we're going to need this piece and this piece and this piece, and there's a service desk that's going to have to get plugged in here, and we'll tie those together.

What kinds of technology are you missing still?

Beauchamp: I'll give you my answer, but it's a trained non-answer, right? If you look at what I've described here in what we're trying to do, and how we need to make it faster, quicker, better, it's just filling that out. At our annual strategy meeting with the board in October, we really think through what's really coming, we will probably add another block on there. We keep refreshing it.

You've described your mission of providing this horizontal layer of management. Would you be able to fulfill that mission if someone acquired you?

Beauchamp: Oh, conceptually you could. I mean there's nothing inherently evil about being acquired. If somebody bought us, it would just depend on why.

Can you tell us a little bit about your future? Where are you headed?

Beauchamp: The industry is naturally attracted to the existence of an independent management layer that can abstract all of this complexity and enable heterogeneity. Because heterogeneity isn't going away for lots of reasons. If you look at a lot of the spaces -- desktop management, network, Internet search -- there are clear winners. There's a number one by a big margin and then there are others. And we in this space still don't have a clear number one. I think a clear number one can resolve, and I think it should most likely resolve in an independent company.

Right now big companies have these huge network operations centers. You've got the Windows guys watching the Windows apps, the network guys watching the network stuff, and the Linux experts watching for that. Everybody's on different screens, just staring. And everyone I know who does this work hates it. Are we moving beyond that environment?

Beauchamp: It's still the case that when large companies have an outage, they have a room with every chair filled, and they would go around the room and say, it's not my fault. That's why I think our industry's still got a long way to go. It's ridiculous that that's still happening. Our mission is to eliminate that. If you watch science fiction, you don't ever see people sitting around talking about what operating system is malfunctioning. I don't envision a world in the future where people are talking about how the California server's down. I don't care. Get me away from that. That should be like phone switches. That should just be rerouting and reconfiguring itself dynamically.

Anything we haven't asked that you'd like to say?

Beauchamp: I think that it's interesting in this economy that we're seeing the kind of growth we're seeing, and it says something about how IT is going through a generational upgrade now. There's something happening. If you think about 2002, that was horrible for us. I mean it was like all of a sudden the money just left the building. Nobody was buying anything. This is different. People are really redesigning their businesses and they're using automation as a platform to redesign their businesses. And they know that waiting 90 days for a server to get provisioned isn't going to work. And so the real strategy of BMC is that we just go after that. We just go after the things that can't keep going the way they're going.

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