BMC cuts staff, discontinues storage product

BMC Software Inc. last week laid off 3.5 percent of its 6,942-strong worldwide workforce, 5 percent of which worked at the company’s Houston, Texas headquarters.

Some 232 employees worldwide were affected, 104 of whom were based in Houston. The move is part of BMC’s fiscal 2004 planning process and its bid to refocus its efforts on different business and technology areas.

The layoff news follows BMC’s recent announcement that it would halt development of Patrol Storage Manager Version 3.1. That announcement was made soon after the availability of Version 2.2 was announced in January. A company spokesman says BMC decided to pull back on development of its distributed storage management product when the software didn’t deliver the return on investment senior management had expected.

"We had targeted it as a high-growth area, and there just wasn’t the return coming in that called for any future investment," he says. Patrol Storage Manager had been shipping for about two years, and Version 3.1 was expected to ship in the second quarter of this year.

"BMC is shifting its resources to high-priority projects, such as service management and sales," says the spokesman. Last November, the company closed its $350 million acquisition of service-management software maker Remedy from Peregrine Systems Inc., which had filed for bankruptcy at the time.

The spokesman says while the layoffs and product news are unrelated to some degree, about 40 (20 percent) of the laid off employees worked in the company’s storage department. "The layoffs affected the entire organization; there wasn’t one specific group that was targeted. The company did try to reallocate as many people as we could to what we’ve identified as high-growth areas," he says.

BMC will continue to support Patrol Storage Manager customers, and the company will also continue to support and develop its mainframe storage management product as well as the 18 storage hardware knowledge modules that work with the company’s flagship Patrol systems management software. "We have not eliminated storage altogether by any means," the spokesman says.

Last month, BMC reported revenue of US$349.6 million for its fiscal third quarter ending Dec. 31, 2002 - a 9 percent increase from the same period last year.

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