Leading large enterprise software company BMC Software Inc. (BMC) recently announced that U.S. Forces Japan (USFJ) has successfully implemented its BladeLogic Server Automation solution.
 
The solution was deployed into USGJ’s Command Cyber Readiness Inspection (“CCRI”) infrastructure to facilitate the Defense Information Systems Agency (“DISA”) to provide secured SIPRNET & NIPRNET connections with the Global Information Grid (“GIG”).
  
GIG is an all-encompassing communications project of the United States Department of Defens (“DOD”), which is supported by the above-mentioned Internet protocol router network connections.
 
BMC Software’s solution has helped the DOD to achieve outstanding performance in its inspection activities with significant reduction in man hours.
  
The increasing focus on IT compliance within the U.S. Department of Defense is driven by the need to ensure the security, availability and integrity of mission-critical IT information systems.  Although we believe the success of BMC Software’s product suites will bring in additional contract wins from the defense sector, we remain skeptical about any financial benefit due to he lack of information.
  
Nevertheless, we remain encouraged by the continuous customer wins from different industrial sectors.
 
Notably, in June, North Carolina-based non-profit healthcare system Novant Health selected BMC Software’s Business Service Management (“BSM”) solution to provide improved automated services to the patients.
  
Apart from information technology (“IT”) customer wins, cloud computing servicesa an acquisitions remain major growth drivers for BMC Software. These strategies  have helped BMC Software to expand its product portfolio.
 
BMC Software reported fourth quarter revenues of $491.0 million, marking year-over-year growth of 3.0% due to strong performance across its three segments. However, earnings per share of 65 cents missed the Zacks Consensus Estimate by 5 cents. Despite the earnings shortfall, BMC Software provided  a decent fiscal 2011 guidance as it remains optimistic about its growth prospects.
 
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 a bit apprehensive about the challenges posed by industry leaders such as International Business Machines Inc. (IBM), Hewlett Packard Company (HPQ), EMC Corporation (EMC) and CA Technologies (CA),  owing to their strong position in the areas of cloud computing and IT solutions.
 
We have a short-term Hold rating, implying a Zacks #3 Rank on BMC Software.
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