The company this week announced plans to acquire mainframe software maker Boole & Babbage in a stock swap valued at $900 million--their largest planned acquisition to date.
With the Boole acquisition, BMC is expected to take third place in the market for systems management software, right behind giants IBM and Computer Associates based on revenue for systems management companies.
"Their acquisitions have been to expand what they've been doing in existing markets or what they're doing in adjunct markets, as opposed to going into new markets" said Melissa Eisenstat, an analyst with CIBC Oppenheimer.
John Puricelli, an analyst with AG Edwards, noted: "They've been growing the company at a good speed. Their acquisitions have been strategic, and it fits the classic buy-rather-than-build decision. I don't think they're making their acquisitions just to grow the company."
For example, BMC earlier this year acquired BGS systems in a stock swap valued at $285 million, further expanding its position in the open systems arena.
Last year, BMC acquired Open Aviator and Data Tools with a similar goal of folding the companies into its existing strategy of application, data and performance management.
The strategy is simple. BMC approaches customers only after database systems and enterprise applications have been installed--and assumes the role of caretaker, making sure systems run smoothly.
"BMC is defining this market, so they don't really have a need to expand into new markets," said Brian Skiba, an analyst with Lehman Bros., adding, "There aren't too many players in this market and BMC has yet to saturate this market."
Some of BMC's competitors include Veritas Software and Platinum Technology.
Analysts said that despite the acquisitions BMC has completed, it will unlikely cause a rippling effect through the industry. Skiba said that by making acquisitions in areas where it is already a player, the action shouldn't inspire a surge of mergers and acquisitions among BMC's competitors. But should BMC venture into new markets, Skiba predicted players like Veritas and Platinum might take heed.