Deal Wins Continue for BMC - Analyst Blog

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Global software major BMC Software Inc. ( BMC ) recently announced that it has won a new contract from Canadian North Airlines, a major provider of scheduled passenger and cargo services in Canada. As per the deal, BMC will provide its highly efficient and cost effective software-as-a-service (SaaS)-based help desk and IT systems support solution, Remedyforce Service Desk to Canadian North Airlines to efficiently address its IT requirements.

The airline presently deploys distributed web-based applications for reservations, logistics, scheduling and coordination with other regional carriers. The company has been using the freeware to manage its IT services in the past, but with the advent of new technology the company is searching for better options to manage costs and improve profitability.

Winning new deals always helps the company to improve its business and this, coupled with new product introductions further enable the company to cater to a new set of customers. Concurrent with this trend, the company recently introduced a self-service mobile app and business intelligence enhancements for its powerful workload automation solution, Control-M. 

The company has further supplemented this device with new features including a new wizard conversion toolset that makes it simple and quicker for companies to consolidate Control-M and achieve improved productivity and efficiency. This new product is expected to attract many takers as it has a positive effect on the productivity of the company.

Many companies are increasingly adopting the SaaS business model to reduce capital investment. BMC has historically enabled managed service providers to provide such services to customers through its Remedy IT Service Management suite. Hence, new deal wins continue for the company, with the most recent from Salesforce.com ( CRM ) for the delivery of a complete SaaS-enabled help desk solution.

As per a report published by the technology research firm Gartner, the SaaS market will grow consistently through 2013 with revenue totaling $16.0 billion for enterprise application markets. We believe this offers immense growth opportunity for BMC going forward, since the company is already well entrenched in this space.

So it is evident that BMC Software's growth prospects remain solid, given the steady flow of deal wins. However, near-term challenges like the European exposure and lowered 2012 guidance are headwinds. This apart, stiff competition from established companies such as International Business Machines Corp. ( IBM ), Hewlett-Packard Company ( HPQ ) and CA Inc. ( CA ) in this space is also a challenge for the company.

BMC Software holds a Zacks #3 Rank, implying a short-term Hold 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 The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Stocks

Referenced Stocks: BMC , CA , CRM , HPQ , IBM

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