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.

Nor does BMC's decision mean they're leaving storage altogether: Ceasing PSM development does not impact their successful mainframe storage management products such as MainView, nor their PATROL knowledge modules for storage arrays. BMC is not dumping all of its storage lines. Hoffmann said, "Certainly storage is a critical part of F, and BMC recognizes that by maintaining our product in the mainframe side, and in the knowledge module side, BMC will continue to invest in storage infrastructure. What we're not going to do any longer is compete with new development in storage." BMC PATROL already supports eighteen storage hardware vendors at present, and BMC will introduce two new ones this year: Patrol for Cisco MDS 9000 and Patrol for StorageTek L-series tape libraries. The L-Series is the first tape library in the PATROL knowledge module line, and BMC is also developing PATROL for Storage Arrays and PATROL for Storage Networking.

Hoffman also commented, "A lot of people were surprised at this decision. We had gained a measure of leadership." But Marco Coulter, CA's vice president for BrightStor storage strategy, remarked that, "It didn't come as too much of a surprise." Coulter's take on BMC's decision is that it lacked long-term open systems storage experience, and counted too heavily on leveraging their PATROL storage management knowledge into storage management products such as PSM. He added that, without many years in the open systems storage trenches, BMC could not fully grasp how business really used its storage.

BMC was a late entrant to the open systems storage space, which meant that it was trying to market and sell into data centers that were already firmly in competitors' camps. With smaller customers, where the same people handled both the network and storage, differentiation was not an issue. But PSM was focused on data centers and enterprises that had separate networking and storage administrative groups. The network groups were often familiar with front-ranked BMC's systems management products, but it was a different story with their storage counterparts. The storage administrators were already familiar with established storage companies, whose sales forces were already familiar with storage networking customers' problems, vocabulary, and expectations. Network-related product salespeople had to develop customer relationships from scratch as well as sell new storage products, which usually meets a high level of resistance. Dutch said of BMC, "They weren't able to really effectively leverage the relationships they had with people on the network side to the storage side."

Karen Dutch, director of marketing at InterSAN, had a similar take on BMC. Talking about assigning resources, she said, "Where are you going to put your energies? It's all about focus." BMC's legacy and primary revenues is in network and system management, and they decided to focus on that. For companies like InterSAN, this is good news--a competitor has left the market space, and BMC's decision seems to reaffirm the strategic value of focus in fields like storage management.

Dutch does not believe BMC's decision is part of a larger shakeup, nor does Fujitsu Softek's director of product marketing, Scott Shimomura. He said of BMC's move, "From a high level perspective, we don't believe this is an indication of the storage management market. The general issues related to BMC leaving the market purely center on their problems or lack of traction that they've been experiencing on their end." BMC's decision was not uncommon for a very large company to make about a relatively small product line. Shimomura said, "BMC was not generating enough revenues to justify the large investment they've probably been making. In a billion dollar company, where are they going to invest their money? In a $250 million line of business that might grow to $300 or $400 million, or a $10 or $20 million business that might double to $40 million?" However, the smaller revenues that might not justify investment for BMC are great news for smaller storage vendors like Fujitsu Softek, InterSAN and CreekPath, who see BMC's drop out as an opportunity to (1) suffer less competition in general, and (2) snatch PSM customers.

Although BMC's decision may have been reasonable under the circumstances, their PSM customers are understandably annoyed. Fujitsu Softek, in fact, has trumpeted a wholesale replacement of PSM (which it refers to as a competitive upgrade) for nervous BMC storage customers. Softek is offering free user licenses and installation to companies who buy their Softek Storage Manager, and at press time had closed a very large deal with a disgruntled PSM customer. According to Steven Murphy, Softek's president and CEO, "Softek is throwing an application availability life preserver to businesses that were 'voted off' the BMC Software storage management island." Survivor references aside, Murphy went on to point out that customers should not automatically trust large vendors to indefinitely maintain individual product lines, while smaller companies can focus on single innovative products. (Murphy left out the part about the high risk of small company survival, probably because Fujitsu Softek has a good-sized customer ba se and a wealthy corporate parent.)

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