Thought mainframes were a thing of the past? Enterprise software developer BMC
Bookings rose 19% compared to a year ago, which should provide a foundation for continued growth. But even more impressive was management's strong cost discipline. BMC grew its operating margin from 5% a year ago to 23% this quarter.
License bookings surged 55%, generating $165 million cash flow from operations, as the company completed contracts from major companies like Fortis and Banco Bradesco S.A.
BMC's key growth driver is its business service management segment, and the company believes its next big step is moving into advancing IT process automation. The company has already locked in some deals, such as the one with RealOps to run book automation solutions. BMC also won some strategic customers such as the U.S. Army, PG&E
The competition is intensifying from players like IBM
With improving operating margins, cash flows, and bookings, BMC should continue its momentum into next year. But in the fast-moving tech world, things never stay the same for long. In order to remain a leader, BMC is going to need to continue implementing strategic acquisitions and relationships.
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Fool contributor Tom Taulli, author of The Complete M&A Handbook, does not own shares mentioned in this article. He is currently ranked 4,156 out of more than 60,000 players in CAPS. The Fool has a disclosure policy.