The last decade has been tumultuous for BMC Software, one of the nation’s leading information technology and enterprise software developers. In 2013, a consortium of private equity firms, including Bain Capital and Golden Gate Capital, took the publicly traded company private. It was then purchased in 2018 by global investment giant KKR (KKR +0.77%), which had planned an initial public offering (IPO) for 2024. The owner, however, changed course in October 2024 and announced that BMC would instead be split into two separate entities, with one being up for sale at a $2 billion valuation -- but hasn't ruled out a future IPO.
The company was taken private after stakeholders complained that its management had been too slow to move into cloud computing. Since then, however, it's developed a number of products designed to ease automation, development, workflow, artificial intelligence, and security applications for more than 10,000 clients, including 86% of the Forbes Global 50.
This article will cover how to invest in BMC, the status of an IPO, and some alternatives to consider.
Is BMC Software publicly traded?
It's not. BMC was publicly traded until 2013, when it was taken private because of stakeholder concerns about its lack of progress in adapting to cloud-based computing. The company has filed paperwork with the Securities and Exchange Commission (SEC) to go public but changed course in October 2024, splitting it into two: BMC Helix, with a focus on monitoring and management software tools, and BMC Software, which will concentrate on software automation tools and mainframe computers.
At the time, the company described the split as part of an effort to take advantage of a rosy economic outlook and said in early 2025 that it would seek $2 billion for the sale of BMC Helix. CEO Ayman Sayed also didn't rule out the possibility of an IPO for BMC Software.
Is BMC Software profitable?
As a privately held company, BMC isn't required to disclose much in the way of financial information. The company, however, said its revenue reached $2.3 billion -- smaller than ServiceNow's $10.98 billion but a respectable amount.
It's worth noting that KKR bought the company for $8.3 billion. When the investment firm notified the SEC of its plan to offer shares of the company in 2024, it estimated its market valuation at $14 billion to $15 billion. So, it's probably safe to assume that BMC isn't exactly struggling to stay afloat.
Alternatives to BMC Software
Because BMC Software is owned by private equity firm KKR, you can't buy its stock directly. Accredited investors, often high-net-worth individuals, may be able to purchase pre-IPO shares on platforms such as Equity Bee and Forge Global.
Nonaccredited investors, however, must wait for the IPO. Here are three options to consider for investors interested in companies in the same line of business:
KKR
KKR is a global investment firm that has $664 billion in assets under management (AUM). It bought BMC Software in 2018 and lists technology as a core industry in its Americas, Europe, and Asia segments.
Known as a pioneer in leveraged buyouts (LBOs), which involve using debt to acquire companies and laying off employees, KKR has been taking minority stakes in tech and healthcare firms.
Its adjusted net income came to $4.4 billion in the first quarter of 2025, a 37% increase from the previous Q1. Fee-related earnings were also up 37%, climbing to $3.4 billion. As of mid-2025, share prices had risen 20% over the previous 12 months.
ServiceNow
BMC Software founder Moores played a key role in arranging venture capital financing for ServiceNow (NOW +1.77%), founded in 2003. The company was named one of the most innovative U.S. companies by Forbes magazine in 2018. ServiceNow announced a partnership in May 2023 with Nvidia (NVDA -0.56%) to provide artificial intelligence (AI) services to major corporations, using company-specific data.
ServiceNow reported $3 billion in total revenue during the first quarter of 2025, a 19% year-over-year gain. The company announced its first-ever share buyback in May 2023, and it's already one-third of the way to its total planned repurchase amount of $4.5 billion.
IBM
IBM (IBM -0.02%), which began life focused on punch cards, is moving into cloud computing. It’s sold off many of its secondary businesses, such as its ownership of The Weather Channel, and has become a far more streamlined company. Like many tech giants, it’s also moving into AI applications, microchip design, and quantum computing.
Investors may be encouraged by the moves. Its shares have been disappointing over the last decade -- dramatically underperforming the S&P 500 -- even when considering its high dividend yield. Still, the company’s software business has been its most attractive feature for investors lately. Software revenues climbed 7% during the first quarter of 2025, reaching $6.3 billion.
How to buy similar stocks to BMC Software
People who want to buy one of these alternatives to BMC Software can purchase shares in any brokerage account. Here's a step-by-step guide to investing in these stocks.
1. Open your brokerage app: Log in to your brokerage account where you handle your investments.
2. Search for the stock: Enter the ticker or company name into the search bar to bring up the stock's trading page.
3. Decide how many shares to buy: Consider your investment goals and how much of your portfolio you want to allocate to this stock.
4. Select order type: Choose between a market order to buy at the current price or a limit order to specify the maximum price you're willing to pay.
5. Submit your order: Confirm the details and submit your buy order.
6. Review your purchase: Check your portfolio to ensure your order was filled as expected and adjust your investment strategy accordingly.
Dollar-Cost Averaging
ETFs with exposure to BMC Software
Since they're not publicly traded, BMC isn't held by any exchange-traded funds (ETFs). So, you can't get passive exposure to them. However, plenty of ETFs focus on information technology. Here are three top funds you might consider:
Vanguard Information Technology ETF
Vanguard is well-known for its low-cost index funds. The Vanguard Information Technology ETF (VGT +0.43%) certainly falls into this category, with a rock-bottom 0.09% expense ratio. This means that for every $10,000 you invest, your annual fund expenses are just $9.
The ETF tracks a broad index of U.S. tech companies of all sizes. However, it is a market-cap-weighted ETF, so its top holdings make up a larger proportion of its assets.
The top three holdings -- Apple (AAPL -0.75%), Microsoft (MSFT +0.43%), and Nvidia -- account for more than 45% of the fund's total assets, and more than 20% of the fund is made up of companies specializing in systems software. In short, the ETF is an excellent choice for investors who want a set-it-and-forget-it way to invest in the overall information technology sector.
Invesco S&P 500 Equal Weight Technology ETF
One major risk factor with many technology-related ETFs is that they're rather top-heavy. Because they are market-cap-weighted, and several blue chip tech stocks have trillion-dollar market caps, they are highly concentrated in just a few stocks.
The Invesco S&P 500 Equal Weight Technology ETF (RSPT +1.00%) aims to create a truly diversified basket of tech stocks. This ETF allocates an equal share of assets to every company in the index it tracks. In other words, a relatively small company in the index, such as Hewlett-Packard Enterprise (HPE +1.88%), gets the same exposure as a massive company, like Microsoft or Nvidia.
The 0.40% expense ratio is quite reasonable for a unique ETF like this. It could be a smart choice for investors who don't want their investment returns to be too dependent on any single company's success.
Ark Innovation ETF
The Ark Innovation ETF (ARKK -0.90%) is actively managed by well-known investor Cathie Wood and her team. Its goal is to beat the market over time, and it is designed to capitalize on innovative and rapidly growing tech companies. The fund's three largest holdings, accounting for roughly 30% of its total, are Tesla (TSLA +0.10%), Coinbase (COIN -1.70%), and Roblox (RBLX +1.11%).
The idea is to invest the fund's assets in whatever opportunities seem the most attractive at any given time. By doing so, the Ark Innovation ETF aims to beat the performance of the overall tech sector. The fund hasn't exactly been a standout performer in the market downturn. But this ETF is worth a closer look if you seek potential market-beating performance over the long run.
Should you invest in BMC Software?
Since BMC Software isn't a publicly traded company yet, its shares aren't for sale. This isn't necessarily a bad thing since it gives investors time to research the company thoroughly while they await its IPO.
The research process might excite you even more about the company's prospects and increase your conviction that it's an appealing stock to buy. However, you could also discover things about the company that change your mind about buying its shares.
Here are some reasons you might want to invest in BMC:
- You believe cloud computing will continue to soar.
- You think BMC will be a strong growth stock.
- You believe BMC can compete with applications being developed by top AI companies.
- You think businesses will continue to use the company's platform-as-a-service.
- You believe companies will need more of the services offered by BMC as information technology systems become more complex.
Of course, there are some reasons you might think this isn't the best investment for your portfolio:
- You worry that BMC will be overwhelmed by larger, more profitable operations.
- You're uncertain about the growth prospects of cloud computing and AI.
- You think the information systems technology management (ISTM) field is already too crowded with larger competitors.
- You believe the last decade -- with two takeovers and a scrapped IPO-- bodes ill for its future.
- You'd prefer to invest in an information technology stock with a lengthier track record.
The bottom line
The course of IPO stocks is notoriously hard to predict. Although BMC Software has a lengthy track record of innovation and strong performance in a very competitive sector, it faces a number of competitors in the information technology, consulting, AI, and cloud computing areas, and its optimism in splitting the company in 2024 to take advantage of an improving economy in 2025 may have been misplaced.
If you invest in a new stock, especially a tech-related business, be ready for volatility. Do your research, make sure it fits into a diversified portfolio, and never buy shares in a company you’re not prepared to hold long-term.
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