It’s now clear that BMC’s transition from a legacy systems management company to business service management (BSM) vendor is going anything but smoothly. It’s just announced it will miss its guidance by up to $22m, and it’s having to cut 825 to 875 jobs to rein in its costs.
The company said it will be refocusing its efforts and resources on what it still sees as growth areas, primarily in its service management business. "We have realigned to increase investment in our service management growth business, maintain profitability in our mainframe business and make the necessary reductions to improve profitability in our distributed systems management business," CEO Bob Beauchamp said in a statement.
The fact BMC got its guidance so wrong must be particularly hard for the company to swallow, not least because it has been arguing that better BSM tools increase a company’s visibility of its operations. It doesn’t look to have a lot of visibility into its own. It’s now forecasting that it will earn between 8 and 12 cents a share, compared with its earlier prediction of 17 to 22 cents a share. The company said its workforce reduction plan will save it around $100m per year. Little consolation for the 800-odd staff who will lose their jobs because BMC was unable to forecast with sufficient accuracy.