BMC wants to behave like a startup, exec says

It’s almost two and a half years since private equity firms took BMC Software private in a US$6.9b deal

It is coming up to two and a half years since a group of private equity firms took BMC private. The acquisition was led by Bain Capital and Golden Gate Capital and worth around US$6.9 billion.

Since the September 2013 transition to a private company the company has been aggressively investing in R&D, according to BMC’s president for Asia Pacific and Japan, Gavin Selkirk.

BMC’s owners “are not cut and thrust, come in, cut the costs out — they’d have done that by now,” Selkirk said.

“In the initial 12 months [after going private] we spent $150 million over and above our traditional R&D investment which is, depending on the year, ranges between $500 million and $600 million,” he said.

This year BMC will invest significantly over its typical R&D budget, he said.

“That’s not short-term thinking.”

The shift from being NASDAQ listed to privately owned has helped deliver increased agility, Selkirk said.

“The behaviour we’re trying to drive is: We want to behave like the world’s largest startup,” Selkirk said.

Selkirk, a former CEO at Fujitsu Asia Pte, joined BMC in late 2014.

“What I’ve seen is a willingness to look further out than just short term — meaning looking beyond where most multinationals look, which is the month or quarter.

“The business is driving us, and our board is driving us, to think further out.”

“In Asia, my charter has been to drive accelerated growth, and so we made some very significant investments across Asia and in [the A/NZ] business,” Selkirk said.

“The first was to look at how we were engaging with our customers,” he added.

Read more: BMC Software personalises IT services with MyIT

“We revamped our business in terms of skills and capabilities and experience and moved to a completely specialist salesforce,” Selkirk said.

“In a market where revenue growth is challenging, and many organisations are struggling to invest to drive innovation, we’re innovating and we pushed very aggressively in terms of investment around our structure.

“The short term benefit that we’re starting to see from that is that we’re having more meaningful conversations with our customers.”

In Australia, the company has made some headway in the government space, where previously it had little presence.

Read more: Macquarie Telecom pens $1.2m deal with BMC software

At the federal level, users of BMC’s Remedy IT service management platform include the Department of Foreign Affairs and Trade.

The company has seen customer wins at all three levels of Australian government said Chris Gibbs, the Australia / New Zealand managing director.

“From our perspective we’re doubling down in terms of our investment around not just federal government but also in state government” over the next year, Gibbs said.

In Australia the financial services industry will remain key for the company, particularly as the sector grapples with changing regulatory requirement, as well the telco and service provider space, Gibbs said.

BMC announced the appointment of Gibbs in early December.

“I think there’s a huge opportunity for growth for us over the next 12 or 24 months,” Gibbs said. “We’ve got some pretty aggressive targets.”

In Australia, BMC is aiming to grow somewhere in the region of 20 to 30 per cent over the next year.

“There’s no doubt it’s a challenging growth rate, but being in a private equity environment — they’re not going to do this unless we’re certainly growing faster than market and taking share,” Selkirk said.

“I think this market is primed for us to be able to do well,” he added.

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