BMC To Acquire Numara Software: A Few Thoughts From Your Favorite ITSM Analyst

OK, the second part of the title is probably untrue. But hopefully Forrester IS your favorite place for IT service management (ITSM) analysis and opinion.

My colleague Dave Johnson (who is well worth following from a Twitter and blog perspective BTW) wrote an immediate reaction to the BMC announcement yesterday. Of course as analysts we are pre-briefed on such things and having had time to think about the announcement I offer the following somewhat random thoughts and opinions:

  1. BMC (and everyone else) is “suffering” at the hands of ServiceNow in the enterprise ITSM space (both new and existing business). Some might see the Numara purchase as a retreat to the mid-market or a tactical diversion to maintain revenue growth in light of shareholder expectations. However, I think it is most likely point 3 (below) – especially in light of the fact that BMC are nearly always in my discussions with Forrester clients on ITSM tool selection (albeit sometimes only from a replacement perspective). And let’s not forget that BMC has long been the dominant ITSM player in terms of customer base with its enterprise and mid-market plays – Remedy and Service Desk Express. BMC continues to win a lot of new business. This is an offensive rather than defensive move.
  2. ServiceNow is actually a red herring in respect of the Numara offerings given that it is “above” the lower end of the mid-market now (unless sold in smaller bundles via its partner offerings). Oddly, many mid-market ITSM tool vendors still see ServiceNow as their main threat. In my opinion, this is potentially lethal for them as while they are looking at ServiceNow, BMC RemedyForce, Nimsoft, and maybe someone like ManageEngine will be circling their customers and WILL steal existing business (remember that ITSM tools are changed on average every 5 years, the rise of interest in SaaS ITSM offerings can only accelerate this IMO).
  3. BMC is definitely buying people here: Numara’s mid-market customers, and sales, product management, and development people. They already have two mid-market plays for ITSM – Service Desk Express and RemedyForce, do they need more? Also, do they really need the people? BMC has some great people, maybe they need a different type of people, people that can’t sit back and say that “I work for the largest and most successful ITSM tool vendor.” You need to miss a meal or two to really feel the hunger. Expect to see the ex-Numara people, including partners, playing a big role in BMC's future.
  4. The technology may play a part but I see it as outside the core ITSM-capability space. Maybe IT asset management (ITAM) for the mid-market and Numara will also bring a better mobile management play (that BMC has yet to commit to strategically).
  5. RemedyForce is, to me, BMC’s best chance in the SaaS for ITSM space (and as a ServiceNow competitor in all spaces) at least short term (on the back of SalesForce.com’s SaaS credentials and BMC’s for ITSM). I’d hate to see RemedyForce get “lost” in what is an already complicated BMC ITSM-offering set up. Killing the now-superfluous Numara Cloud and Service Desk Express still leaves them with five offerings for salespeople and potential customers to think through. Thankfully, however, BMC is quick to point out that RemedyForce is central to its SaaS and mid-market plays and also in certain enterprise customer scenarios.
  6. BMC needs to get better messaging out about customizing Remedy and associated costs, and the issues-of-old related to the cost and pain of upgrading between product versions. Cost, ease of use, and upgrades are why customers are leaving what is a very, very functionally- rich ITSM offering.
  7. Finally, BMC is seeing with RemedyForce what I have been talking about for a while … that ITSM tool selection should be as much (if not more) about your ITSM maturity than company size. I still think a massive investment in RemedyForce’s ITIL process “coverage” and marketing will make it ultimately able to compete with ServiceNow at the enterprise level and not just limited to the mid-market.

There you go – a quickly-written blog that hopefully is both insightful and fair. If you think it is a BMC-bashing piece I advise you to read it again. I know BMC and other ITSM tool vendors appreciate honesty above all things (OK, well maybe not above happy customers and revenue growth).

As always your comments, thoughts, and opinions are definitely appreciated.

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Comments

This is an exciting

This is an exciting development. As a vendor in the small/mid sector, HelpMaster has often been in the same conversation with TrackIt, and after 16 years of competing with them, it will be weird to see "BMC TrackIt" coming through on our sales and support channels (if they do...see below)

TrackIt has been kicked around a bit. Blue Ocean TrackIt sounded natural. Intuit TrackIt sounded like progress. Numara TrackIt was a twist, but BMC TrackIt sounds just odd. Not sure it fits.

Now that TrackIt has a new owner, it will be interesting to see if this market will want to do business with a behemoth such as BMC. With existing products that can cater for this market, perhaps BMC will discontinue Footprints and TrackIt, and just work on converting clients to their other products. If this happens, the small/mid sector of the helpdesk software market is going to really liven up.

Either way, it's going to be an interesting time.

Looking forward to it.

Numara Products Going Forward

My initial conversation with BMC is that the two products you mention will continue with Numara branding replaced by BMC's.

Money Can't Buy Everything...

Observation #3:

You can buy a customer base, but you *cannot buy goodwill*.

One can only hope (all parties involved, actually) that the acquiring company has the good sense to manage the expectations and network of relationships well enough that existing goodwill it isn't destroyed in the process.

Preserving goodwill seldom happens when large technology organizations acquire smaller companies.

Could this be the 1:10,000,000,000??

We'll see, I guess...

kengon

BMC now have a fourth ITSM

BMC now have a fourth ITSM product to all to their confused portfolio of Remedy, Remedy OnDemand, Service Desk Express and RemedyForce (based on the SaleForce.Com PaaS) ITSM products.

There is a huge Remedy installed based out there but users dislike it because most have very old versions. BMC have neglected the Remedy cash cow and its installed base for too long. The acquisition of Numara might just be a knee-jerk response to a changing market. Is or can BMC make the sum of BMC and Numara greater than their individual values?

Numara is certainly a fine product that is well-integrated product that has a newer and much better look and feel than the BMC products and is a better all-round ITSM offering than the older BMC products. Numara is far from a mid-market offering. Elements of Remedy would compete with other BMC products such as their Atrium CMDB.

In SaaS terms, ServiceNow can easily and more actively compete with RemedyForce if it chooses to do so.

People tend to forget that BMC is much more than ITSM: it still gets lumbered with the Remedy reputation.

I would have thought BMC's future lies in developing a vision for their massive product set and developing easily implementable integrated packages for sets of related products.

The truth is that products like ServiceNow are comprehensive, easy to deploy and use, relatively cost-effective and can be used outside the core ITSM area because they provide a true platform on which services can be developed. Customers are enthused by ServiceNow.

It would be a pity if Numara got lost in the BMC mix or the Numara people left BMC.

Service-Now

Where to for Service-Now -- Maybe HP?

Not sure what you mean ...

Hi Daniel

Thanks for commenting ... though I'm not sure what you mean ... do you mean who will buy ServiceNow? There has been a lot of talk over recent years as to who would acquire them (and I have heard rumors of offers made) but IMO those days are gone (probably even if a ridiculously large sum was offered).

An IPO has been on the cards for a couple of years (and that it just publicly) and I can't see that not happening now given all the staff changes of late - ServiceNow has "acquired" some great people and I don't see this as a sign of an organization about to become part of a larger one.

But who really knows, anything is possible. Unless Numara was actively seeking a buyer, the BMC acquisition is proof of this. CA Technologies acquired Nimsoft for a "reputable"* SaaS play so who is to say IBM or HP wouldn't consider ServiceNow, stranger things have happened. A conspiracy theory could be that ServiceNow are making IPO noises to force a potential suitor's hand. Only those who move in circles far higher than mine are party to such things.

Cheers

Stephen

* By reputable I mean having SaaS credibility. ServiceNow has it, BMC RemedyForce has it, Nimsoft has it, as do some others. For some though it still needs to be earned (at least in the eyes, hearts, and guts of potential customers).