BMC chairman looks to future

When Max P. Watson Jr. - chairman of the board chief executive officer and president of BMC Software Inc. - thinks about what his company has achieved in the last four or five years he is both immensely pleased and a little bit anxious.

During that span BMC which specializes in software for monitoring the health of applications and data made a transition - a profitable transition - that other companies have failed to make. The company moved its product set from IBM Corp. mainframes to the open-systems environment.

"If I look out at the next 12 months I am worried about us staying focused " Watson said. "We have accomplished a lot. It would be easy for us to say we've made it but we haven't made it."

BMC's primary product is a management system called Patrol which uses client-based agents - what the company calls "knowledge modules" - to monitor the health of the targeted applications or databases.

During the last year in particular the company has stepped up its presence in the management market signing partnerships with such major industry players as Dell Computer Corp. Digital Equipment Corp. IBM Corp. and Intel Corp. propagating its Patrol management technology throughout the computing environment. The company's latest product launch is aimed at Internet applications management (see accompanying story at left).

BMC is one of the world's largest independent software vendors with more than $400 million in revenue in fiscal 1996. That same year the company also tripled revenue from its Patrol product line to $45 million. Watson would like to see that grow to more than $100 million in annual revenue in the next several years with as much as 10 percent of that coming from the federal market.

But Watson also knows that as the computing industry continues to evolve BMC must evolve with it pushing out new products to address new end-user requirements.

Watson compares his business approach with that of Intel CEO Andy Grove who has described himself as driven by "paranoia " always pushing ahead for fear of who might be catching up with his company.

The Internet is a perfect example. The World Wide Web has emerged as the newest computing platform like client/server and open-systems computing before it. As every other software vendor has done BMC has been working long and hard to carve out its role in this new environment to tailor its technology to end-user requirements.

On the other hand while the Internet has arrived with incredible hype BMC has approached this market without deviating from its basic focus on application and data management. The Web has the same kind of performance problems as other computing platforms which is why Watson jokingly refers to it as the "World Wide Weight."

Despite the uncertainty that faces any software firm in today's technology market Watson believes he does have cause to be hopeful.

BMC's latest Internet technology originated with an engineer who came up with the idea developed a prototype and pitched it to company executives. The company has fostered that kind of creativity by paying engineers commissions on product sales.

Without providing details Watson said the amount of money involved can be quite substantial and indeed memorable. "We are giving people the capability to earn enough money in a year that their grandchildren will know about it " Watson said. This approach ensures a steady amount of innovation from the company's workforce. "The best ideas just bubble up " Watson said. "There is no shortage of ideas."

Watson believes this approach has laid the foundation for years of success. He also recognizes that this bottoms-up approach sets BMC apart from some other technology vendors which are driven by the sheer force of personality of their chief executive.

Watson appreciates this ambivalent measure of his company's success. "I probably contribute less to [directing] BMC than any other president of a company " Watson said.


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