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BMC to Buy Marimba for Change Management

UPDATED: Aiming to give its business service management strategy a boost, BMC Software Thursday agreed to acquire Marimba for $239 million in cash.

The purchase price is reflective of a price per share of $8.25, but the total cost will be whittled down to $187 million after adjusting for Marimba's expected net cash balance as of March 31, according to a statement from BMC.

BMC said it will also assume outstanding Marimba stock and convert it into BMC stock based on a conversion ratio derived from the purchase price per share.

In acquiring Mountain View, Calif.-based Marimba, BMC is looking to acquire a leader in the narrowing market for change and configuration management, which helps businesses automate software distribution and patch management for desktops, servers, laptops and other devices, according to changes in the computing environment.

James Duggan, vice president and research director of applications and development at research concern Gartner, said the deal was big for BMC, which is looking to land more customers in a lucrative automated software management market.

Should the deal succeed, it would better position Houston's BMC against IBM's Tivoli line, Microsoft's Systems Management Server (SMS), and HP which acquired Novadigm and Consera for automated systems management, Duggan told internetnews.com.

"It's a follow-up to Novadigm being acquired by HP," Duggan said. "Novadigm and Marimba were the most direct competitors. It's the desktop's provisioning equivalent of the last mile. It's how you manage a package of stuff and send it out to 10,000 desktops quickly and learn which ones fail and who has taken a hard drive off of their machine. It's a management play, so it fits very closely to what BMC has done on the mainframe."

To wit, HP issued a statement claiming BMC's bid validated its own purchases.

"BMC's announcement underscores the fact that automated management software is crucial to companies that want to increase business agility and allow IT supply to meet business demand," said Todd DeLaughter, vice president and general manager of HP's Management Software Organization, in a note to the press. "It's a strategic market to HP and its customers, which is why we have been acquiring technology leaders aggressively over the last nine months ahead of our competition."

Automated management software is in high demand because of the increase in application lifecycle management and utility, or on-demand computing environments, where change is frequent and requires automation software.

BMC will use Marimba's core assets to bolster its business service management strategy. They will complement BMC's existing Remedy line of service desk, change management and asset management software, all of which automate and manage service and support processes. Marimba's customer base spans government, financial services, health care and retail sector.

Marimba President and CEO Rich Wyckoff said the deal was a natural fit.

"Given the highly complementary nature of Marimba's solutions to BMC Software's core technologies and Remedy offerings, the combined solutions provide customers with a single vendor that delivers a complete change and configuration management solution tying together process-based asset and change management capabilities with policy-based discovery, patch management, and software distribution," he said in a statement.