BMC Acquires I/O Concepts - Analyst Blog


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Consistent with its recent acquisition spree, BMC Software Inc. ( BMC ) announced that it has bought I/O Concepts, a leader in the ioEnterprise line of mainframe console security, automation and consolidation solutions.

The acquisition is expected to allow BMC to improve the productivity of its customers, through a reduction in their staffing requirements and also enhance systems availability for its MainView Solutions. However, the financial terms of the transaction were not disclosed.

The acquisition is expected to improve BMC's datacenter management solutions and automation with the inclusion of a best-in-class product that complements and enhances the company's industry-leading monitoring and automation suite. The acquisition will also enable BMC to offer the benefits of scaling operations to its customers through improved and modernized business processes.

BMC has always been active on the acquisition front. The company earlier acquired Phurnace Software. Phurnace develops automation software that helps to reduce the cost, complexity and risk of deploying and configuring Java-based applications on physical, virtual and cloud computing environments.

BMC has integrated Phurnace's technology into the BMC BladeLogic Server Automation Suite product, thus providing customers with seamless, rapid full-stack provisioning and compliance of all infrastructure layers, including the operating system, patches, middleware and applications. This acquisition has also helped the company to enhance its server automation process.

Acquisitions may help the company to diversify its businesses, but growth may be impacted by weaker expenditure from different government and private customers. Moreover, the concern over the IT spending growth may have a dampening effect. The recent European economic turmoil may add to these pressures over the next few quarters.

Moreover, the company is trying to re-build its sales model, which addresses sales compensation and attrition. It is also implementing new strategies to manage sales efficiently. BMC is also taking additional measures to improve its business pipeline. This rebuild will help the company to improve its business volume, which may be reflected in the results of the upcoming quarter.

BMC provided mediocre guidance for fiscal 2012 as it factored in the lingering issues affecting the tech industry. This apart, the company has been witnessing a reduction in total bookings. These factors may take a toll on its business volume over the next few quarters, in our view.

BMC has a Zacks #4 Rank, implying a short-term Sell rating.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing , Business , Stocks

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