After Dell, BMC To Go Private: Who’s Next?

It has only been a couple of months since it was announced that Dell might be taken off the market by Michael Dell and Silver Lake Management in a leveraged buyout. That matter remains to be resolved, even though an offer from Michael Dell’s consortium worth $24.4 billion is on the table. While it may be some time before the Dell deal is completed, one company that has been sold for sure is BMC. Like Dell, BMC is also a legacy IT vendor. It has been taken over by not one but two equity firms, paying $6.9 billion for the company.

Dell will almost certainly go private in the near future and BMC already has gone private. One can only wonder whether this is a trend that is emerging in the market. Soon, it could see other legacy IT vendors jumping on the bandwagon and being taken off the market. The thing with BMC though is that it isn’t as well known as Dell or any other leading vendor for that matter. Yet, people within the industry are surely paying attention to its purchase by Golden Gate Partners and Bain Capital.

Ironically, Dell offered direct competition to BMC over the past few months. Even though BMC’s focus was on different management software and suites for businesses, Dell became a competitor when it purchased Quest Software at the in September 2012. At the time, Quest Software was BMC’s biggest rival. BMC’s main services are used by companies to keep their data centers up and running, not glamorous by any means. This is why BMC is quite unknown to the average person.

The thing is that it may become a trend in the not too distant future. Already, leading PC vendors are under pressure from their stakeholders to show better performance. With the PC market on the decline, cloud management and other services to enterprises are becoming the preferred product offering for the companies. So, it is quite possible that Dell and BMC might not be the only legacy IT vendors being taken off the market and branching out into different arenas.

This was exemplified recently by IBM, when the company revealed its earnings for the first quarter of the year. During Q1 2013, IBM actually managed to improve its sales with regards to cloud computing and other tools for analytics it provides to enterprises. However, it lost ground with its main products with revenues not increasing from where they were in the same quarter last year. It goes to show how important other services, particularly cloud related have becoming important for IT vendors.

You should not be surprised if you see other companies joining Dell and BMC off the market. Of course, it is virtually impossible to fathom Microsoft or Oracle being bought by a private bidder. Yet, there are many companies like BMC which are not in the limelight but are worth billions. So, you might see more of them being bought out by private equities over the next couple of years.

[Image via arstechnica]