Milan-based Neptuny Software is the leading provider of Information Technology (IT) Performance Optimization, as well as Capacity and Virtualization Planning solutions. Neptuny’s Caplan solution, which is basically a Capacity Planning solution for large data centers and networks, facilitates organizations in planning their capacity needs for business processes. Caplan has been successfully adopted by major customers such as Vodafone Group plc (VOD), Unicredit Group, Expedia Inc. (EXPE), Accenture plc (ACN), Computer Sciences Corp. (CSC), Deutsche Bank AG (DB) and several Fortune 100 companies.
 
BMC Software will integrate Neptuny’s Caplan portfolio into its Business Service Management portfolio and Cloud Management offerings. The company noticed an increasing trend in virtualization and cloud computing deployment amongst its customers. The transformation of physical servers into virtualized and cloud computing infrastructure will require capacity management by clients.
 
Neptuny’s capacity management tool will now allow BMC Software’s clients to align their physical, virtual and cloud infrastructure with their business needs, thereby improving service levels and reducing capital expenditures. According to BMC Software, Caplan will increase its market share in the capacity management space.
 
We believe that the acquisition will prove profitable, as jointly delivered capacity management solutions could significantly increase demand among customers. Moreover, BMC Software will have access to Neptuny’s rich customer base.
 
Expansion through acquisitions has been an important growth strategy for BMC Software. Moreover, opportunities for growth in the SaaS segment, a spate of successful government deals and strong cash generation abilities are positives for the company.
 
However, we remain apprehensive about the challenges posed by industry leaders such as International Business Machines Inc. (), Hewlett Packard Company (HPQ), EMC Corporation (EMC) and CA Technologies (CA) due to their strong positions in cloud computing and IT solutions markets.
 
We currently have a short-term Hold recommendation on BMC Software, as indicated by the Zacks #3 Rank.

 
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