BMC Software Inc. (BMC) recently announced the acquisition of Web application performance monitoring (APM) solutions provider, Coradiant Inc. Financial terms of the acquisition were not disclosed.

Poway, California-based Coradiant develops data center monitoring software and facilitates end-to-end performance monitoring and management of physical, virtual or cloud-based Web applications to attend to end-user requirements. The company partners with the likes of Akamai Technologies Inc. (AKAM) and International Business Machines Inc.’s (IBM) Tivoli Software range.

BMC Software integrated the acquired technology within its flagship Business Service Management (BSM) platform. The new capabilities are expected to enhance BMC Software’s product suites. The company’s new offering, BMC End User Experience Management software leverages Coradiant’s APM capabilities.

Application performance management refers to the discipline within systems management that focuses on monitoring and managing performance and service availability of a software application. According to a research conducted by the U.S. research firm Gartner, end users will increasingly favor vendors that move beyond experience monitoring to behavior monitoring.

BMC Software’s new solution will enable organizations and IT service managers to monitor behavioral changes of end users with respect to the performance of any application, in turn tuning up or improving these for higher productivity and operational stability. This leads us to believe that the new solution would be of big help to customers, enhancing their loyalty to BMC Software’s products.

With this acquisition, BMC Software can now compete in the APM space with ace systems management vendors such as CA Inc. (CA), Hewlett-Packard Co. (HPQ) and International Business Machines Inc.

We remain encouraged by BMC Software’s impressive third quarter results, attributable to strong customer demand for its Service Automation, SaaS and cloud solutions. Growth prospects in most of its business segments, its position in the government vertical and strong cash generation abilities are some other positives.

Details of BMC Software’s fourth quarter performance are expected soon, with results scheduled to be announced after the market closes on May 4, 2011.

Currently, BMC Software has a Zacks #2 Rank (short-term Buy recommendation).

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