The Gift From BMC - Blessing or Curse?

BMC is looking to sidestep the expense of further developing its limited IT services organization, and instead apply its small services manpower to coordinating VARs to fulfill and service BMC deployments.

The program's lure of increased services revenue is significant. But while the plan could put more money in the pockets of qualified partners, the downside is that small and medium solution providers could lose their incentive to broker BMC sales because they know they cannot fulfill them. Plus, some solution providers fear that they can lose some project control and other freedoms they currently have if they win subcontracting roles coordinated under the vendor's watch.

At issue is BMC's control of the services it plans to hand off. Its own reputation on the line, BMC will work to ensure quality by marshaling the fulfillment of services according to VAR proficiency, said William Donahoo, director of worldwide channel program development and marketing at BMC, Houston.

Under this model, a typical deployment could include a certified partner installing BMC's Patrol product, while qualified subcontractors hand-picked by BMC integrate add-ons such as Remedy. Understandably, BMC doesn't want to crush certain VARs by overloading them with complexity. "We've got their back," Donahoo said.

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But partners including Jyotin Gambhir, CEO of SecureFLO, a VAR in Boston, Mass., which sells BMC's Control-SA security management product, said that because of the size of most BMC customers, having to shoulder services "for a client the size of Safeway would kill a company our size." Also, the incentive to close a BMC sale is reduced if another VAR gets handed the install, he said.

One northeast VAR, who requested anonymity, said as a BMC subcontractor he had to sign a contract preventing him from approaching a particular customer for six months, because his territory overlapped with that of the primary contractor.

BMC will strive to prevent instances where sales conflicts exist between multiple contractors, but there are no guarantees, said Donahoo.

The fact is, only well-heeled VARs can handle BMC's entire BSM (Business Service Management) stack at the level of quality BMC insists on. BMC's IT solutions menu rivals that of IBM's Tivoli, Hewlett-Packard's OpenView and Computer Associates International's Unicenter. All of these product lines are aimed at helping couple complex IT infrastructures with real business processes. Like its rivals, BMC can compete at the application management layer, the infrastructure layer and in the realm of change and configuration management, with ways to plug just about anything else in.

VARs with significant resources and expertise, such as Whitlock Infrastructure Solutions, can handle a broad BMC install with no problem, said Jim Copio, business development manager at Whitlock, South Riding, Virg.

Still, Mike Anderson, vice president of business development at Infospectrum Consulting, a VAR and BMC partner in Wheaton, Ill., that is more than capable of shouldering a full-scale enterprise BSM deployment, has reservations.

Infospectrum makes 70 percent of its revenue from BMC sales and services, and when handed the full IT services package under BMC's new plan will be able to jack up the hourly billing rate by more than $500 an hour. Anderson likes the plan. But he maintains a wait-and-see posture when it comes to BMC executing on the new strategy, mainly because he worries BMC's own sales reps may continue to operate without VARs in mind.

"What BMC is doing is contingent on their ability to get the program massaged into the heads of their sale reps, who make money based on services dollars delivered," said Anderson. "That reality didn't go away with the new strategy."

BMC insists its entire organization will fall in line with the new program. According to Donahoo, BMC's territory managers will act as channel managers that partners performing services can "fall back on for a knowledge base of who has expertise in which area of BMC technology," and "inside sales groups act the same. They have leads and are incented to give them to a partner," he said.

BMC's goal is to increase its indirect sales for all its business units by 20 percent, said Paige Erickson, world wide vice president of channels and alliances.

"Four years ago we were on a path to our own professional services organization," Erickson said. "Part of that not happening was the economy, and other things. But BSM requires services, and our partner want a program like this. They find it very appealing, because services is where they make money."