BMC Software Seals CenITex Deal - Analyst Blog

Leading large enterprise software company, BMC Software Inc. (BMC) recently announced that CenITex, the shared-services information technology (IT) agency of the government of Victoria (Australia) has successfully implemented its proactive operations monitoring and management solution. Financial terms of the deal were not divulged.

CenITex was set up as a State body by the Victorian Government to centralize Information and Communications Technology (ICT) support to government departments and agencies. Last year, CenITex selected BMC Software's IT services for managing its shared services through the deployment of an integrated and standardized technology services platform.

BMC Software's proactive operations platform helps users plan their business goals with the help of predictive analytics. The platform also provides automated preventive measures and improves service availability, performance, and delivery, while reducing capital and operational costs, and minimizing business risk at the same time. Apart from these facilities, CenITex will be able to reap the benefits of the BMC Remedy IT Service Management Suite, BMC Atrium CMDB and BMC Atrium Orchestrator solution.

While we are yet unclear about the financial benefits of the deal, we believe that the association with the Victorian Government will prove to be an important revenue driver in the quarters to come.

In March 2010, BMC Software bagged a deal from Australia's most internationalized university, Monash University, which was much similar to CenITex deal. The University deployed BMC Software's Business Service Management (BSM) solutions to manage ICT shared-service initiative. The proactive operations solutions that have been selected by CenITex are a part of its BSM suite.

We are also encouraged by the selection of BMC Software's Business Service Management solutions by the University of Arizona. This proves that the demand for the BSM product suite is increasing and is becoming a significant revenue driver.

BMC Software is a global company with its operations extended into numerous international offices. The company plans to continue to look for opportunities to efficiently expand its operations in international locations to maximize its global competitiveness. BMC Software's Australian exposure would increase international revenues. During the recently concluded second quarter earnings, international revenues were roughly 49.0% of the total revenue.

Apart from winning deals across different sectors, BMC Software is advancing with its cloud-strategy following an alliance with tech giant Cisco Systems Inc. (CSCO). Under the alliance, both the companies will jointly develop and market new solutions for large-scale multi-tenant cloud computing infrastructures.

BMC Software's cloud-exposure, acquisition spree and strong cash generation abilities are positives. However, we remain apprehensive about the challenges posed by industry leaders, such as International Business Machines Inc. (IBM), Hewlett-Packard Company (HPQ), EMC Corporation (EMC) and CA Technologies (CA) due to their strong positions in cloud computing and IT solution markets.

Currently, BMC Software has a Zacks #3 Rank, implying a short-term Hold recommendation.

 
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