BMC Bids $800M for BladeLogic

BMC signs agreement to purchase automation vendor BladeLogic for big bucks

March 18, 2008

3 Min Read
Network Computing logo

BMC has announced plans to acquire automation specialist BladeLogic for $800 million, taking aim at HP and IBM in the booming server and storage management space.

The $28 per share deal, to which both companies have agreed, is now subject to BladeLogic shareholder approval, and BMC execs expect to close sometime in June.

"We're very excited about today's announcement," said Bob Beauchamp, the BMC CEO, during a conference call. "The directors of BladeLogic have unanimously recommended that the BladeLogic stockholders accept the offer."

Today's deal follows BMC's acquisition of runbook automation specialist RealOps for an undisclosed fee last year, and it signals the vendor's intention to extend its management reach further into the data center.

Storage is included in the plans. Although traditionally focused on servers, BladeLogic has been working on a tighter integration of storage into its wares."BladeLogic is the fastest growing company in the fastest growing IT management segment," said Beauchamp, explaining that he is keen to keep a large chunk of BladeLogic's 230-strong workforce, including its management team and CEO Dev Ittycheria.

"We will have retention plans for many of the key employees across the company," said Beauchamp. "There will be both equity and other retention vehicles in the system for lower level people in the company to keep them excited."

The exec would not reveal his roadmap for BladeLogic's technology, although he promised that the acquisition would form the centerpiece of BMC's services automation division, which incorporates the RealOps software that has been integrated with BMC's Atrium CMDB technology.

BladeLogic isn't alone in looking to automate management and provisioning of servers and storage. HP, for example, bought Opsware for $1.6 billion in 2006. Other vendors targeting this space include IBM, Symantec, CA, and EMC, which last year announced products to track storage wares and activate automated provisioning.

Today's acquisition announcement will help BMC compete more effectively against these vendors, notably HP and IBM, according to at least one analyst."BladeLogic is a young, rapidly growing company in the mushrooming data center automation space," wrote TBR analyst Ezra Gottheil, in a note released earlier today. "[The acquisition] significantly enhances the company's offerings in provisioning, configuration compliance, and application deployment."

Despite these benefits, the analyst warns that an acquisition of this size is risky. "The cost of the BladeLogic acquisition is approximately one-half of BMC's current assets," he writes. "BladeLogic, with its very rapid growth, may present more of a challenge in integrating with stolid BMC."

Rival HP also ramped up its own automation efforts today, unveiling a set of enhancements to the Process Automation System product it acquired when it bought Opsware in 2006.

HP has now integrated the software, now renamed Operations Orchestration, with a number of its other data center offerings, including the Storage Essentials SRM software, Universal CMDB, and Client Automation, which is used for installing software patches and upgrades on client devices.

Available next month, pricing for Operations Orchestration starts at $75,000, the same as entry-level pricing for the Process Automation System.HP is also planning to extend the reach of Operations Orchestration even further, according to Jennifer Johnson, director of product marketing, for the vendor's software division. "This is the first round of integration that you will see," she told Byte & Switch, but would not reveal which parts of the data center this will affect.

Have a comment on this story? Please click "Discuss" below. If you'd like to contact Byte and Switch's editors directly, send us a message.

  • BladeLogic Inc.

  • BMC Software Inc. (NYSE: BMC)

  • CA Inc. (Nasdaq: CA)

  • EMC Corp. (NYSE: EMC)

  • Hewlett-Packard Co. (NYSE: HPQ)

  • IBM Corp. (NYSE: IBM)

  • Opsware Inc. (Nasdaq: OPSW)

  • Symantec Corp. (Nasdaq: SYMC)

  • Technology Business Research Inc. (TBR)

Stay informed! Sign up to get expert advice and insight delivered direct to your inbox

You May Also Like

More Insights