BMC Takes Over VaraLogix - Analyst Blog
14 Août 2012 - 11:45AM
Zacks
BMC software (BMC)
has announced the acquisition of application release automation
provider VaraLogix for an undisclosed amount. This acquisition is
expected to help BMC expand its DevOps portfolio, which is a tool
for IT professionals.
The resultant enhancement to the
DevOps portfolio is expected to increase the efficiency, accuracy
and speed of application development, which in turn would help IT
professionals improve the ROI for their companies. These advantages
should help the adoption of the technology and therefore convert to
higher revenue for BMC.
The increasing volumes of software
applications and their updates are leading to new capabilities that
could help companies stay ahead in the race. However, companies
generally treat the installation of new applications cautiously,
since any mistakes could prove to be costly.
The acquisition is useful in this
regard, as the collaboration of the technologies of BMC and
VaraLogix creates an abstraction layer that enables IT teams to
deploy applications even without prior programming experience. It
therefore also addresses the need for advanced application
specialists in the installation process.
Although competition is gradually
intensifying in the SaaS space, BMC’s focus on its Service segment
has enabled it to regain some market share. This apart, the BMC
RemedyForce is gaining momentum and is expected to generate
additional revenue. Again this acquisition is expected to affect
the service business in a positive way.
Moreover, the company is slowly
expanding its customer base both on account of market expansion and
at the expense of competitors. On the other hand, rationalization
of expenditure by different government and private customers may
weigh on the overall business volumes of the company. The current
economic turmoil may also affect the business going forward.
The company witnessed growth in
most of its business segments and generated decent cash flow in the
first quarter of 2013. However, we are a bit apprehensive about the
bleak business conditions in Europe. Moreover, growing competition
from big players such as IBM Inc. (IBM),
Hewlett-Packard Company (HPQ), EMC
Corp. (EMC) and CA Inc. (CA) is a
challenge for the company.
The company carries a Zacks #3
Rank, implying a short-term Hold rating.
BMC SOFTWARE (BMC): Free Stock Analysis Report
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