BMC Snaps Up Data Center Automation Company

Software data center

BMC is paying $28 in cash per outstanding share of BladeLogic common stock or approximately $800 million, net of cash acquired. BladeLogic is expected to become part of BMC early in the first quarter of fiscal year 2009.

"We have coveted this business for a very long time," said Bob Beauchamp, BMC's president and chief executive officer, said in a conference call. "In fact, in all of our evaluations of this technology for as long as we've been looking at this space, BladeLogic was the best product of its type on the market, period. Convincing them to sell it was not an easy process."

The companies are betting that with the merger, the new entity can address what it said is a vital need in providing business-relevant automation of the IT lifecycle, with continuous compliance built in by combining BMC's Business Service Management (BSM) platform with BladeLogic's data center automation solutions.

"Organizations around the world will spend more than $140 billion dollars this year running data centers," said Beauchamp. "Automation is the only way IT can bring this spending under control and still meet the reliability and time-to-market requirements of their businesses. BMC's acquisition of BladeLogic is a natural and very significant next step in our vision of Business Service Management."

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The companies said that customers of the combined solution can expect a 90 percent improvement in IT operational efficiency in 90 days. The companies said that by contrast, its competitors have incomplete and disjointed portfolios that can lead to partial solutions that require expensive and lengthy professional services. "When it comes to data center management, IT organizations have learned the hard way that the architecture you start with is the architecture you're stuck with," said Dev Ittycheria, BladeLogic's president and chief executive officer, in a statement. "From day one, we focused on developing an architecture specifically designed for managing today's complex data center."

David Greene, vice president of corporate marketing at BMC, said the union is also good news for channel partners. Greene said BMC has been working with resellers to help them get started on service automation, and provide training and service support which will expand.

Over the last twelve months, BMC has acquired and integrated several companies, including network compliance and change management firm Emprisa Networks last October, and IT analytics developer ProactiveNet in May of 2007.

"BMC has transitioned to a more aggressive competitive stance," said software analyst Ezra Gottheil in a research note. "BMC's acquisition of BladeLogic will help the company compete more effectively against the systems management software behemoths, HP and IBM."

BMC's Greene said the company has made offers to senior management at BladeLogic and believes many will stay on with the company.