BMC And EMC Redefine Relationship

Last March, BMC announced it would no longer invest in its Patrol Storage Manager (PSM) and would stop work on the 3.1 version. PSM is a storage-resource manager tool -- software that is used for things like capacity-planning -- that many view as a central piece to developing a broader storage-management software in the distributed market.

With this current deal, EMC executives say they will continue to give technical support to the 50 customers currently using BMC's PSM software tool, with the hope that those customers will migrate to EMC's ControlCenter software-management suite. EMC will support PSM until January 2005, when those customers will have the option of converting their BMC management software licenses to EMC's ControlCenter software licenses, free of charge.

"We are giving the an alternative," says Barry Ader, director of open software product marketing at EMC.

Essentially, EMC cut this deal with the long-term objective of pulling more customers into its own software-product fold. The storage giant has intentions of deriving 30 percent of its revenue through software, with 50 percent coming from hardware and 20 percent from services. In recent years, the Hopkinton, Mass.-based company has acquired numerous software companies to strengthen its software portfolio, including storage-resource management (SRM) companies like Astrum Software and Prisa Networks, as well as the virtualization company FilePool.

In addition, EMC has purchased software companies like Conley, Terascape and CrosStor. Recent interviews with some top EMC executives, including CEO Joe Tucci, reaffirmed the company's goal of building its software products. With this BMC deal, EMC is hoping to build up its software customer base. BMC officially becomes an EMC VAR of the Control Center product suite -- giving EMC access to the nearly 5,000 BMC customers that use the Patrol family of products for nonstorage needs. When BMC bowed out of the SRM market for storage open systems, it had vowed to continue investing in tools for the database, network and systems management environment. Patrol offers a family of management products for applications like Oracle, SAP and WebSphere.

The BMC-EMC arrangement might strike some as a curious move: At the time it decided to axe its PSM product, BMC had about 4.2 percent share of the storage-software market (not counting array-based software), according to a Gartner Dataquest report. It had been in the distributed space for about seven years. And most companies that are putting an SRM product to market concede the space is in an early investment phase. BMC executives looked at its numbers and saw that PSM was not making the kind of revenue that justified its existence, let alone continued investment.

"The strategy was an economic one," says Dan Hoffman, director of the enterprise storage management division at BMC. "Senior management made a very tough decision. We can't always afford to develop [products] ourselves."