BMC Software Reaches Taiwan - Analyst Blog

Leading large enterprise software company BMC Software Inc. (BMC) announced that its mainframe solutions will be used by a Taiwan-based software consultancy firm, Galaxy Software Services Corp. Financial. Details of the agreement were not disclosed.

Since its inception, Galaxy Software has been providing business application software and consulting services to its broad range of customers including government, medical, manufacturing and financial institutions. With the help of BMC Software's mainframe solutions, Galaxy Software will help Asian banks and telecom organizations to quickly process customer requirements while reducing costs.

BMC Software's Mainframe solutions are crucial for high-performance computers or mainframes used for large-scale computing purposes that offer greater availability and security than a smaller-scale machine. BMC Software's Mainframe Service Management segment generates revenue by selling software for mainframe database management, database monitoring and management, as well as scheduling.

Despite having a global reach, BMC Software continues to be on the lookout for opportunities to expand in international locations and maximize its competitiveness. The association with Galaxy Software Services will strengthen BMC Software's Asian exposure.

A few days back, the company's Business Service Management solutions were deployed by CenITex, the shared-services information technology (IT) agency of the government of Victoria (Australia), which is expected to increase international revenues. During the recently concluded second quarter, international revenues were roughly 49.0% of the total revenue.

Despite continuous deal wins and expanding global exposure, BMC Software's share price remains depressed. Revenues from the mainframe division have not increased for the last couple of years due to replacement of mainframe systems by the distributed computing networks, in which different parts of a program are run simultaneously on many computers connected over a network. BMC Software also faces competition in the mainframe market with CA Technologies (CA) and Compuware Corp. (CPWR), both of which also rely on their mainframe businesses for nearly half of their revenue.

Apart from these, the challenges posed by industry leaders, such as International Business Machines Inc. (IBM), Hewlett-Packard Company (HPQ), EMC Corporation (EMC) and CA Technologies due to their strong positions in cloud computing and IT solution markets are also concerns.

Currently, BMC Software has a Zacks #4 Rank, implying a short-term Sell recommendation.

 
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