BMC closes on Compuware acquisition

On June 1, BMC announced the close of its amiable acquisition of Compuware. This is a significant event for BMC as it enables them to expand their reach deeper into the mainframe development space and empowers their customers. The combined companies now have significant potential to positively impact enterprise IT and mainframe operations and markets.

We will describe benefits and mention some cautions based on our discussions with BMC and Compuware executives. This is intended to help enterprises to better prepare for and understand the potential impact of this merger. We are planning a more in-depth report on how this and other significant acquisitions are advancing BMC’s market strategy and influencing its products available later this year.

Plans post-acquisition

Compuware will operate as a wholly-owned subsidiary of BMC. Chris O’Malley (current Compuware CEO) will continue to head the subsidiary. He will report directly to Bill Miller, President of BMC zSolutions. Bill heads the integration task force responsible for planning merger activities with Chris actively participating. Both executives have long, successful involvement with mainframes. In our opinion, they make an excellent team.

At the center of implementation planning for both BMC and Compuware, there resides a deep focus on and commitment to maintaining customer well-being and benefit. To that end, they have agreed to adhere to a policy of zero-disruption throughout the integration period. One manifestation of this is that the Compuware management team will remain with their current (pre-acquisition) performance objectives unchanged.

Looking further, both companies recognize that for themselves, as well as their customers, digital transformation will continue to be an on-going, high-priority activity. Both companies have made extensive progress in their own internal transformation efforts. The insight and knowledge gained from those experiences will be leveraged as they aid customers pursuing their own transformation projects.

To further enable successful transformation efforts, BMC will operate in accordance with their Autonomous Digital Enterprise strategy – which has been specifically designed to empower their customer’s success in this digital era. The strategy adheres to the following five characteristics:

1. Transcendent Customer Experience – create and assure exceptional, customer-focused experiences and interfaces.
2. Automation Everywhere – facilitate pervasive AI and data-supported automation of enterprise operations.
3. Enterprise DevOps – mainstream the mainframe with agile development products that are innovative, integrated, consistent, and contemporary.
4. Data-driven Enterprise – integrate data-driven operations with comprehensive, actionable reporting and feedback.
5. Cybersecurity – security is an essential, critical function, implement it as automated, intelligence-driven, and adaptive.

The current operating plan for both BMC and Compuware is to maintain a business-as-usual approach by following their customer procedures as they exist today. Each companies’ separate Sales and Support teams will remain as they are today. Compuware solution development operations will not change. They will continue their quarterly software releases schedule. BMC will evolve their release schedule to match.

What happens now?

We found BMC and Compuware to be straightforward and honest in their responses. The probable scenarios given here reflect our own opinions. Barring external disruptions, we foresee little deviation from this for the balance of the calendar year.

We expect that standard corporate functions, such as Legal and HR departments, will be the first to merge. Other standard cross-enterprise functions may alter processes or procedures over time. Customers may see changes when agreement processes are standardized. We do not foresee any disruptive actions.

Normal personnel turnover will continue. We do not foresee any exceptional activity. Policies and processes for hiring, retiring, and dismissal may or may not change. Either way, customers should not see any negative impact.

Since both BMC and Compuware are financially sound there exists no significant pressure for any radical action. We believe that BMC may allow the Compuware subsidiary to prepare its own financial plans and objectives subject only to the legal requirements for consolidating such information for SEC and stockholder reports. Financial planning targets for 2021 might change, but we have no data that would allow us to provide any helpful insight.

The respective product portfolios are highly complementary, with virtually no overlap. This is very good news. The sales, product development, and support functions will continue to operate relatively independently. BMC and Compuware are two long-term partners; both familiar with each other’s operations, any more significant integration can be expected to occur smoothly. As mentioned, BMC will adopt Compuware’s quarterly model for product development and release. We expect the model of adopting what is best from either companies’ processes will continue to benefit all.

The Final Word

This is the largest merger ever undertaken by BMC. Still, we believe BMC’s past successful record of acquisitions will expect they will continue that success with these mergers, (we see no reason why they shouldn’t) they are uniquely positioned to effectively assist customers in making the transition to Digital Enterprises.

BMC has an established record of identifying, even anticipating, and then filling major much-needed mainframe solutions. They have become effective at introducing and promoting innovative contributions that facilitate and enhance enterprise mainframe operations.

Compuware’s specialty has been in making rapid changes to mainframe solutions and then extending and evolving mainframe development processes, methodology, and applications. Compuware’s five-year history of quarterly updates brought them significant attention. Each company has an established record for innovative leadership. 

We have followed BMC and Compuware for some time. We observe as their respective visions and strategies evolved along complementary paths, even in similar directions. We think this contributes significantly to the potential for a successful merger. This is not a guarantee everything will be bliss. But we believe customers (shared, separate, and new) will find real benefits when the chose to work with the combined companies.

Our final take is that customers should be reassured that their relationship with Compuware and BMC will not be changing in the immediate future. Both companies are committed to being responsive to their customers. Jointly, they can provide enormous assistance to address their customers’ requirements for successful digital transformation. BMC and Compuware have a credible plan for their merger. We hope they succeed with minimal problems. Watch for further articles on their efforts.