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Analyst Blog

BMC Software Inc. is winning deals at regular intervals.  Recently, Saudi Arabian mobile telecommunications company mobily opted for BMC’s Cloud Lifecycle Management (CLM) solution. Separately, cloud-based talent management software solutions provider Cornerstone OnDemand deployed BMC’s End User Experience Management solution.

While mobily needed a solution for deploying cloud services and automating its IT infrastructure; Cornerstone OnDemand wanted to provide its 9.4 million users with top quality customer service. BMC’s solution is expected to help Cornerstone rectify any glitch even before end consumers come to know about them.

As the complexity of the IT environment grows and consumerism is further prioritized, spending on cloud computing is expected to help companies increase their business potential.

The increasing number of deal flows has helped BMC to improve its business volume and expand its customer base. Last month, BMC had won a contract from Osiatis. Osiatis is using BMC’s Business Service Management solution for achieving several of its business goals.

Prior to that, France Telecom had selected the BMC Proactive Net Performance Management solution for efficient customer services. This solution identifies and prioritizes practical problems. The actual work of the solution is to identify the main reasons for the problems and thereafter inform the concerned team.

We believe that these offerings from BMC will find many takers, as it makes life easier for the customers. BMC has been enjoying a steady flow of deals and is also witnessing steady growth in its SaaS-based business. Moreover, cloud bookings have also improved during the current quarter.

On the other hand, significant Fed budget cuts have had an impact on government funds for IT administration. This apart, the economic weakness in Europe has hurt business volume from that region.

Competition increases at par with the growth in business opportunity. With companies such as IBM Corp. (IBM - Analyst Report), Salesforce.com (CRM - Analyst Report) trying to expand their cloud-based business, things could become difficult for the company.

BMC carries a Zacks #3 Rank, implying a short-term Hold rating. We have a long-term Neutral recommendation on the stock.

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