BMC Software

Our heritage is helping our customers gain business advantage through more effective use of their IT groups. We continue that today by ensuring that our customers can confidently utilize new technology and application services to fundamentally change their business models. The company moves from Sugar Land to a new complex in Houston's Westchase area. BMC Software, Inc. is one of the world's largest developers and vendors of independent systems software. The company made its name with programs that increased the efficiency of IBM mainframe computer systems, and mainframes continue to constitute a sizable percentage of its sales. BMC also produces software for other computer systems, including Microsoft Windows NT and XP and the Linux operating systems. BMC products perform a variety of functions: monitoring and managing service levels; improving application responsiveness; minimizing system outages; automating systems maintenance tasks; assuring data availability, integrity, and recoverability; efficiently managing enterprise storage assets; increasing network performance; and administering business integrated scheduling, output management, and security. BMC is headquartered in Houston, Texas, in its own complex of four office buildings comprising over 1.5 million square feet of area. It also has offices in Austin, Texas; Waltham, Massachusetts; and San Jose, California. More than a third of BMC's 2003 revenues came from international sales. The company maintains offices throughout the world, including development offices in Tel Aviv, Israel; Aix en Provence, France; Frankfurt, Germany; Singapore; and, Pune, India. BMC licenses its software products to such firms as Intel Corporation, Hewlett-Packard, and Computer Associates. The company reached total revenues of $1.3 billion in 2002. BMC Software began in the late 1970s as a partnership that did contract programming in the Houston area. The company took its name from the initials of the three partners: Scott Boulett, John Moores, Dan Cloer. By 1980, when it was incorporated, the 36-year-old Moores had become the company's CEO. As a programmer with Shell Oil, Moores realized that the software written for IBM mainframes, computers that dominated business and government at the time, could be much more efficient. With that in mind, Moores developed BMC's first product, the 3270 Optimizer, which sped up transmission by compressing data streams. To grow the young company, Moores paid top dollar to lure the best software developers and sales people to his firm. The strategy was successful, and new software poured out of BMC's development labs. Profit margins were unfortunately low due to the company's high salaries and generous benefit packages. Another of Moores's innovations was marketing BMC software by telephone. Rather than send its sales staff out to meet personally with potential clients as other firms did, BMC sales people phoned database managers at target firms. Working in this way, they could pitch products directly to the individuals responsible for purchasing them, make many more sales calls in a day, and do it all for less money. Adding strength to the strategy, BMC designed its software packages specifically to make phone marketing easier. "We develop products that salesmen can explain in two or three minutes," BMC's Max Watson told the Wall Street Journal . The company worked on products for which it could make a clear, unambiguous claim--for example, that a particular program performed six to ten times faster than a comparable one by IBM. In 1982, BMC's novel marketing methods and its IBM mainframe products attracted the attention of venture capitalist Jacqueline Morby. In BMC, she saw a company that was not living up to its potential, primarily because it was trying to develop too many products at the same time. For the next four years, Morby worked hard at introducing sound business practices at BMC. She persuaded Moores to cut back on new software developmen