BMC pulls the plug, competitors pick up the pieces - Storage Networking

BMC has announced that they will stop development on Patrol Storage Manager 3.1 (PSM), its flagship open systems storage product. Their decision sent a tremor through the storage industry, upset existing PSM customers and canceled BMC's OEM partnership with out-of-luck Invio Software, a storage provisioning company. It also played havoc with payroll: BMC laid off 3.5 percent of its workforce--232 employees worldwide, 104 of them from BMC's Houston headquarters. All of this happened in spite of the fact that, in 2002, analyst firm Gartner tapped BMC as one of the three top SAN management software vendors.

Why the decision, why now, and what does this mean for storage development in general? Storage management remains a strong market and most vendors, analysts and even customers agree that it's a growth area. But the storage management space has not achieved the overall revenue levels that the analysts had predicted for it. Small and midrange companies are continuing to carefully watch their budgets and primarily invest in storage arrays and tape, not in management packages. Large data centers are spending big bucks on storage and storage management, but they tend to prefer the blue chip status and lengthy storage experience of IBM, HDS and EMC to companies who are less known in the storage field. (This includes both well-known companies like BMC in the networking and mainframe markets, as well as storage start-ups.)

BMC's initial reason for braving storage in open systems environments is understandable. The Aberdeen Group's David Hill, research director of Storage and Storage Management, lists three of the critical areas of F's reason for existence: attempting to control storage management costs, protecting company data, and increasing productivity in the face of flat or shrinking budgets. Accomplishing this, especially at an enterprise level, requires a certain level of intelligence in data management software, especially in the storage management market. Those companies who can fulfill their management promises stand to gain a great deal, especially if the economy improves and business releases its stranglehold on F budgets

In fact, BMC still doesn't doubt that storage management is a growth market. Dan Hoffmann, director of marketing for BMC said, 'This was not a decision based on pessimism about the industry. BMC believes storage is a growth market. It's just that in a world of tough choices, even good products can lose when they have to make a painful choice." Hoffman noted that BMC is not dumping the product. "We have stabilized this product; we have no plans to enhance it. BMC values its PSM customers, and will support them over the next two years."

For network expert BMC, getting into open systems storage management was a gamble. BMC's traditional expertise is in systems and database management, represented by hundreds of different products throughout multiple product lines. Given its undoubted network management expertise, it hoped to apply the same level of integration, management and reporting to the storage networking environment. The company acquired Boole & Babbage's mainframe storage management tools in December 1998, re-engineered the mainframe tools to suit open systems, and announced their Application Centric Storage Management (ACSM) initiative in 2000. BMC was headed in the right direction: application-centric storage management improved on device-only management by policing application service levels. And the ACSM announcement trumped competing introductions of similar initiatives, which gave BMC a head start on convincing the market of application-centric storage's value. (In this schema, storage management and provisioning is based on ap plication data and service levels. It's often integrated with policy applications that can relieve manual provisioning pressures on F departments, which can be intense.)

However, by BMC's new fiscal year in 2003, PSM had not achieved the level of return that senior management wanted to see in a tight economy. The flagship storage management line took intensive development effort, and salespeople struggled to penetrate the ranks of storage customers. Senior management concluded that their development, marketing and sales investments in PSM would better be invested in their network management products, which were the primary source of BMC's revenues.