BMC Software Inc. has announced plans to buy New Dimension Software Ltd. in a US$650 million cash transaction that will bring workload scheduling and security software to BMC's portfolio of enterprise management solutions, the companies announced last week.
Both BMC Software and New Dimension Software have offices dedicated to the federal marketplace. Under terms of the deal, New Dimension Software will operate as an independent business unit of BMC Software. Any changes at its federal office, which employs about 20 people, will not be made for nine to 12 months, a BMC Software spokesman said.
New Dimension Software offers enterprise management tools for mainframe, Unix and Microsoft Corp. Windows NT environments. The company's software handles job scheduling, user administration and security.
The acquisition extends BMC Software's Application Service Assurance solutions, a strategy designed to reduce the complexity of managing large enterprises by improving availability, performance and recovery of business-critical applications, said Wayne Morris, vice president of corporate marketing for BMC.
"We believe [New Dimension Software] brings the best-of-breed solutions in a couple of critical areas our customers have asked us to fill out," Morris said.
Federal contracts account for about 15 percent of New Dimension Software's revenue, which was $93 million in 1998, said Gary Liebowitz, vice president of marketing for New Dimension Software.
The Internal Revenue Service, the Defense Information Systems Agency and the Federal Aviation Administration are among the federal agencies that use the Tel Aviv, Israel-based company's enterprise output and production products.
The acquisition means BMC Software, which competes against mega-vendors Computer Associates International Inc. and Tivoli Systems Inc., will be able to deliver a more comprehensive package, said John McConnell, president of McConnell Associates Inc., a Boulder, Colorado-based consulting company.
"What BMC gets that they haven't had is the workload scheduling," McConnell said. "That really matters in operations that have to have the payroll done by Wednesday at 3 o'clock every week."
But McConnell and Richard Ptak, vice president of systems and application management at the Hurwitz Group Inc., Framingham, Massachusetts, warned that BMC Software will have to organize its offering rationally to avoid overwhelming customers.
"It's a good technical acquisition for them," Ptak said. "But one problem that I see...is it's one more application in their toolkit, which is already overflowing."