Re: Buy vs. Build

[Kelly Deaver]

**

Please do investigate.

Sales were up but the one time cost of acquiring Bladelogic took a big hit on the quarter -

http://www.bmc.com/USA/News/attachments/BMC_Q1FY09_Earnings.pdf

 

http://www.marketintelligencecenter.com/articles/650370

 

Kelly Deaver

[EMAIL PROTECTED]

(Yes, I work for BMC. This post reflects the opinions of the poster and not the offical opinion of BMC)

-------- Original Message --------
Subject: Re: Buy vs. Build
From: "Pierson, Shawn" SUG.COM>
Date: Mon, July 28, 2008 7:49 am
To: arslist@ARSLIST.ORG

I don't know if this is related to what we all have been complaining about, but BMC's stock price just took a dive last Friday. They lost about 7% of their stock price in a single day. I haven't investigated why, but it isn't a good thing. If their sales are down, or if ITSM is getting bad press, they will have to make some major changes in direction.

-----Original Message-----
From: Action Request System discussion list(ARSList) [mailto:arslist@ARSLIST.ORG] On Behalf Of Axton
Sent: Wednesday, July 23, 2008 8:06 PM
To: arslist@ARSLIST.ORG
Subject: Re: Buy vs. Build

That initially means laying off and then eventually hiring people.
This has some implications in terms of active development in the
product lines and other things. Also, Microsoft has deep pockets.
http://www.gengaming.com/forums/index.php?showtopic=608&mode=threaded

Can BMC weather the storm? Is bankruptcy an option?

Seems like Microsoft got into some hot water over its licensing
practices. Is this a healthy image or a good place to be in?
http://www.aaxnet.com/topics/slicense.html

Seems like there were problems as well:
http://news.cnet.com/Vista-views-Microsofts-license-changes/2009-1016_3-6126885.html

Not advocating anything, just running the cards of the unspoken sides.
Much of everything is in a trap, to varying degrees, just trying to
drop all premonitions and have an open view of all sides.

Axton Grams

On Wed, Jul 23, 2008 at 4:49 PM, Kaiser Norm E CIV USAF 96 CS/SCCE
<norm.kaiser@eglin.af.mil> wrote:
> Yes, of course. I already have considered existing forces.
>
> Think about it: BMC experiences a drop in revenue from support and a
> drop in revenue in licensing initially. It then rebounds by VOLUME
> sales of the ARS as a RAD toolset.
>
> Think about it: MICROSOFT DOES IT! Buy a copy of Visual Studio and it
> comes with a license key in the manual. You can't install the software
> without the license key. Bingo! Licensing problem (mostly) solved.
>
> Ever watch Gordon Ramsay's Kitchen Nightmares? Last night's episode is a
> perfect example. Gordon shows up to a restaurant that does *some*
> business but is, by no means, a booming business. Gordon tells the
> owner, "You need to completely revamp your menu." The owner resists.
> "No," he says, "I don't want to lose my EXISTING customer base by
> changing." Gordon says, "Well then you'll never be successful."
>
> The moral of the story? Oftentimes you have to jettison an existing
> mildly profitable (but declining) business model and swallow some losses
> in order to go on to big time success.
>
> -----Original Message-----
> From: Action Request System discussion list(ARSList)
> [mailto:arslist@ARSLIST.ORG] On Behalf Of Axton
> Sent: Wednesday, July 23, 2008 3:32 PM
> To: arslist@ARSLIST.ORG
> Subject: Re: Buy vs. Build
>
> Simple answer is "affordable for the customer does not necessarily
> mean profitable for the proprietor." I'm not saying it can't be
> profitable, but there is a lot to account for in developing and
> proposing a business model that is so drastically different than what
> BMC has provided in the past. If such a model were developed, the
> revenue provided by the new model would have to exceed that of the
> current model. Introduction of a new business model would impact the
> existing pricing model, so that has to be taken into account in
> determining the overall viability of a different business model.
>
> Support services entail things that BMC can not avoid being a part of:
> - product maintenance
> - product licensing
>
> With the proposed model you have above, I could probably drop tens of
> thousands of dollars of my current annual support costs. More work,
> reduced revenue...
>
> The counter to the above statement is that the product is no longer a
> viable option for it's customers and sales plummet. This will force
> an adjustment to the pricing model that makes the product marketable.
>
> You have to consider the existing forces that are already in play.
>
> Axton Grams
>
> On Wed, Jul 23, 2008 at 3:00 PM, Kaiser Norm E CIV USAF 96 CS/SCCE
> <norm.kaiser@eglin.af.mil> wrote:
>> Yes, of course Remedy is called a "Help Desk application" BUT THAT'S
>> WRONG! That's part of my point. It's NOT just a Help Desk
> application.
>> It's an application development platform that just *happens* to
> commonly
>> run Help Desk apps because that's the niche it fell into.
>>
>> My point is, to survive, it needs to break that paradigm. And the
> best
>> way is to get people writing apps that are not just Help Desk. Need
> to
>> track monthly sales? Use Remedy. Need a visitor sign-in log? Use
> Remedy.
>> Need a company web page? Use Remedy. Need an equipment checkout form?
>> Use Remedy. Need to track pending orders? Use Remedy. Need a
>> company-wide list of handy telephone numbers? Use Remedy. Need to
> track
>> employee training? Use Remedy.
>>
>> That's the way the marketing should be, in my opinion, but the problem
>> is, the expensive licensing makes all of that impractical. Why make
>> your visitor sign-in log in Remedy and burn up costly user licenses
> when
>> you can make a similar app (certainly not as good) in Access? Now
>> please don't bombard me with messages saying something like, "Well,
> the
>> reason you'd use Remedy and not Access is because Remedy is so good
>> at..." That's not my point. My point is that people will use other
>> tools (Access is just an example) and endure a lesser resulting
> product
>> because the other tools are so much more affordable. Access doesn't
>> have all the awesome capability of Remedy, but it's AFFORDABLE.
>>
>> Then people say, "Yeah, but if they reduced the cost of the ARS, they
>> wouldn't make any money!" To that I contend that ARS is such an
> awesome,
>> robust, and easy-to-use solution, BMC would make much more money by
>> selling in VOLUME.
>>
>> Here's what I envision: Sell ARS at around $500 with NO support. If
> you
>> buy this version, you have to pay for support on a case-by-case basis
>> like Microsoft. Or use the ARSList. Or you could buy a support
>> contract for X amount of dollars for unlimited support. Then
> think--ARS
>> could be anywhere and everywhere. You could buy a copy and take it
> home
>> and use it to stand up a personal web server. Or smaller development
>> companies could buy it, write apps, and then sell the apps with the
> ARS
>> bundled into the price. Say you write a shipping system. You could
>> charge $1000 for the app you wrote and $500 for the ARS to go with it.
>> Total bill: $1500. One stop shop. Right now there are a few third
>> parties writing ARS-based apps (ESS @ Work) but how frightening is
> that?
>> You pour your heart and soul into writing an app in Remedy and then
> get
>> an interested party who wants to buy it but then have to tell them,
>> "Yeah, we sell this awesome product, but to use it, you first have to
> go
>> to ANOTHER company and buy THEIR product for $25,000." Man, that's a
>> tough sell.
>>
>> And the reason why people get thrust into Remedy without training is
>> because management doesn't realize what Remedy truly is and what it is
>> truly capable of because of the *paradigm*...that is, the Help Desk
>> STIGMA. If the ARS was more affordable, it could be marketed to a
> much
>> wider audience and the paradigm could be broken.
>>
>> That's my point. Please excuse the long rant.
>>
>> -----Original Message-----
>> From: Action Request System discussion list(ARSList)
>> [mailto:arslist@ARSLIST.ORG] On Behalf Of Brian Goralczyk
>> Sent: Wednesday, July 23, 2008 1:31 PM
>> To: arslist@ARSLIST.ORG
>> Subject: Re: Buy vs. Build
>>
>> **
>> Fred,
>>
>> I have been using Remedy for over 8 years, and it has always been
> called
>> a Helpdesk application by people outside of the Remedy world. Granted
> I
>> never describe it as such, and I correct everybody I can, but the fact
>> remains, if you are not on the backside of Remedy, you seem to relate
> it
>> to a helpdesk application. That might be because that is how it has
>> been pushed and utilized for a decade plus.
>>
>> I have to say, I am not sure that ARS is dying either. Granted I know
>> the "in" thing these days is ITSM, but that doesn't mean that once
> they
>> get it into a company that they company doesn't realize they can use
> it
>> for other things. I think of the problems is that there are a lot of
>> people who gte put into the feed and care part of the system and only
>> get trained on what they need to know i.e. ITSM. I have also found
> that
>> there are many cases where these people don't know anything about
> Remedy
>> and don't get any formal training. They are given books and told to
>> figure it out. In fact, most projects that I have been on, the FTEs
>> don't even know about the list.
>>
>> So where is the fault? Is it BMC for trying to make more money (and
>> they seem to be selling a lot of ITSM licenses) or is it the companies
>> for not sending their employees for proper trainiing? Or as is often
>> the case, does the blame fall a little bit on everyone?
>>
>> Brian
>>
>>
>> On Wed, Jul 23, 2008 at 9:42 AM, Kaiser Norm E CIV USAF 96 CS/SCCE
>> <norm.kaiser@eglin.af.mil> wrote:
>>
>>
>> Hmmm...we'll see. I don't think just releasing a new version
> of
>> the
>> Admin tool (based on existing open source code) will do much to
>> reinvigorate the ARS when BMC has discarded the "Your Business
>> -- Your
>> Way" approach.
>>
>> I've seen just one job posting for a custom developer
>> recently...before
>> that, it seems every single one was for an ITSM configurator.
>> With
>> fewer custom development jobs, developers are bound to leave
> the
>> field
>> for other toolsets where pastures are greener. When they
> leave,
>> the ARS
>> loses its biggest advocates of "Remedy as a rapid app
>> development tool."
>> As you lose advocates, you lose word of mouth, which is what
>> grew Remedy
>> into what it is.
>>
>> I honestly don't think ITSM will drive anyone to think, "Hey
>> look at
>> this cool development tool we have at our disposal." Instead, I
>> think
>> the mentality is more and more becoming, "Hey, cowboy! Don't
>> touch that!
>> It's too complicated. We don't want you breaking our OOTB
>> solution."
>>
>> I think lowering the price and attracting new people in to
> build
>> apps of
>> all sorts and sizes is the only thing that will make the ARS a
>> viable
>> platform in the eyes of many businesses.
>>
>> Think about it...ask just about any outsider about Remedy and
>> typically
>> (not always) they say something along the lines of, "Oh
>> yeah...that's
>> that Help Desk thing, right?" not, "Oh yeah...that's that
>> awesome rapid
>> app toolset!" I can't ever remember talking to an outsider (a
>> network
>> engineer, a CIO, an IT specialist, etc.) who knew you could
>> build
>> applications with Remedy.
>>
>>
>> -----Original Message-----
>> From: Action Request System discussion list(ARSList)
>>
>> [mailto:arslist@ARSLIST.ORG] On Behalf Of Rick Cook
>> Sent: Wednesday, July 23, 2008 10:12 AM
>> To: arslist@ARSLIST.ORG
>> Subject: Re: Buy vs. Build
>>
>>
>> **
>> I have to take some exception to your first remark, Norm. If
>> the ARS
>> were dying a slow death, why would BMC bring out a new
>> Administrator
>> tool (7.5) that will EXPAND the developer's ability to do core
>> ARS
>> development? I know that part of the reason for that is that
>> it's old
>> technology that's in the way of some architectural advances
> that
>> need to
>> take place, but that's my point. AR System developers will,
>> with 7.5,
>> have the ability to build things we can't even imagine doing
>> now. How
>> many software companies give developers like us that much power
>> over
>> their OOB applications?
>>
>> In my opinion, the core AR System development, which has taken
> a
>> back
>> seat (maybe in the trunk) to OOB apps for a few years now, WILL
>> be
>> making a renaissance in the next few years as companies that
>> bought ITSM
>> increasingly realize that with it, they got a pretty good
>> workflow
>> engine that is easy to integrate with their ITSM products. I
>> take great
>> pains to point out to new Remedy/ITSM customers that every part
>> of that
>> application suite was built with the same workflow engine they
>> have at
>> their disposal, and that a skilled and experienced development
>> team can
>> build an application to support any business function with it.
>>
>> I don't see AR System ever being the financial driver that it
>> used to
>> be, as the revenue model will always be more robust for OOB
>> apps. But
>> it can and should return to being more of a technological
> driver
>> in the
>> next 2-3 years.
>>
>> I do agree that an MSDN-like arrangement would be a net win for
>> both BMC
>> and for the developers. I have heard Doug say he's proposed it
>> many
>> times. I hope he continues to do so until his wisdom is
>> accepted.
>>
>> Rick
>>
>>
>> On Wed, Jul 23, 2008 at 5:50 AM, Kaiser Norm E CIV USAF 96
>> CS/SCCE
>> <norm.kaiser@eglin.af.mil> wrote:
>>
>>
>> Shawn/Bing:
>>
>> You guess hit the mark squarely. The ARS is dying a
> slow
>> death,
>> and
>> unfortunately BMC is doing nothing to stop it.
>>
>> Think on it for just a moment. If BMC would lower the
>> price of
>> the ARS
>> down to, say, the price of the Visual Studio (somewhere
>> in the
>> range of
>> $500) and abolished ARS user licenses (they could
>> continue to
>> sell the
>> user licenses for their OOTB apps), think of how many
>> copies of
>> ARS they
>> would sell.
>>
>> I've written apps in a variety of environments, and to
>> this day
>> the
>> fastest and easiest I've found is ARS. Build an app in
>> Remedy
>> and
>> voila! Instant app that runs in Windows and Unix
>> environments
>> AND is
>> client or web-based. When people see how easy and quick
>> it is
>> not knock
>> out a complete application, they'll flock to it in
>> droves.
>>
>> But as is, the licensing model blocks newcomers to the
>> platform.
>> It's
>> the "thanks but no thanks" effect. True, ARS has its
>> diehards
>> (us), but
>> we are a very small community.
>>
>>
>> -----Original Message-----
>> From: Action Request System discussion list(ARSList)
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