Channel Chief Vows Increased Partner Focus As BMC Gets Set To Become Private

As BMC Software gets set to be taken private by investors, the company's channel chief is vowing the move won't hinder the company's efforts to expand its channel program.

Several of the vendor's largest channel partners said they aren't concerned about the impact of the planned $6.9 billion deal – and some even say the move could give the company more freedom to work with the channel than it has in the past.

"I'm optimistic because I think BMC will be more focused," said Tim Yario, president of Column Technologies, a BMC partner based in Lombard, Ill.

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BMC disclosed last month a plan for a group of investors, led by Bain Capital and Golden Gate Capital, to take the vendor private in a deal valued at $6.9 billion. The company expects to complete the process by the end of this year. Last week the company announced the start of the "consent solicitation" stage of the deal, which calls for paying stockholders $46.25 per share for the company.

BMC reported revenue of just over $2.2 billion for the fiscal year ended March 31, up 1.4 percent from fiscal 2012. The company develops business service management software for data center automation and managing applications and cloud-computing systems, competing with CA Technologies, Hewlett-Packard, IBM and other companies.

In an interview with CRN, Brian Marvin, executive vice president of worldwide channels, said the process of going private shouldn't interfere with the vendor's channel efforts.

"From a channel perspective, no change at all," Marvin said when asked about any potential impact on the channel of going private. "It's business as usual."

But Marvin acknowledges that BMC hasn't always had "a channel-centric strategy" and the company has to go beyond business as usual. "There have been times when we haven't been the most channel-friendly company. And we're changing that."

NEXT: Channel Chief Outlines Plans For Improved Partner Program

Large corporations are the most frequent buyers of BMC's products and the majority of BMC's sales have been direct. In an interview in 2007, Lori Cook, then vice president of worldwide professional services and channels, said about one-third of the vendor's sales were through the company's 400-plus partners.

Channel sales still accounted for about one-third of BMC's sales as of early last year, according to Jason Andrew, who held the post of vice president of sales and worldwide strategic alliances for about one year. (He is currently EMEA sales general manager and vice president.)

Marvin declined to disclose the current volume of BMC's channel sales. But he said BMC is making "fundamental changes" to its BMC Partner Advantage channel program -- including establishing rules of engagement with BMC's direct sales force -- to boost channel sales.

"We've been a very direct-sales-oriented business, but we're changing that very significantly," he said. "The channel is becoming a more pivotal part of our growth strategy."

Without providing details, Marvin said BMC is developing new marketing and financial incentives for partners to encourage them to go after new business among small and midsize businesses and in geographies where BMC isn't a player. And while partners can sell across BMC's entire product line, the vendor will be "refining the channel" to focus on partners who can work with specific products such as the company's cloud computing and Software-as-a-Service offerings.

One product BMC is particularly counting on the channel to sell is its MyIT software, the company's self-service mobile application the company began selling earlier this year that gives users access to IT services.

"It has a lot of potential," said Column Technologies' Yario of MyIT, with which his company has invested in training, he said. "It's designed from an end-user perspective. There's a lot of buzz around the product."

Column is one of BMC's biggest partners, with more than $25 million in BMC-related sales in 2012. Column sells BMC software licenses and provides consulting, training, maintenance and support services. The solution provider became a BMC partner in 2003 when the vendor acquired Remedy Corp., a developer of service management applications.

While Yario said his company has a good relationship with BMC, he described the company's sales focus as "direct first and partner second" until now. But he said he met recently with the channel chief and he's convinced the company is sincere in wanting to become more channel-centric.

As for the bid to go private, Yario said that could result in BMC becoming more targeted in its indirect-sales efforts, leaving more opportunities for channel partners.

DLT Solutions, the Herndon, Va.-based solution provider that focuses primarily on government markets, has been a BMC partner for two years and last month added BMC's business service management and cloud management products to the GSA IT Schedule 70, allowing government agencies to purchase the software on a faster track.

"BMC has been a central part of government agencies' IT infrastructures for years," said Brian Strosser, DLT's sales executive vice president, in an interview. With the Schedule 70 approval, he expects DLT's sales of BMC products to grow.

BMC's software "addresses a lot of the key initiatives that government entities are undertaking today," Strosser said, noting that the vendor's software involves cybersecurity, cloud computing, mobility and data center consolidation.

PUBLISHED ON JUNE 10, 2013