BMC pins hopes on direct sales

System management supplier BMC has admitted that its channel strategy is not achieving its goals, forcing the company to look to direct sales to generate business.

In the company?s latest filing with the US Securities & Exchange Commission, it conceded that ?open systems indirect sales were not material in the first three quarters of fiscal 1997?. The vendor will remain dependent on its direct salesforce as the main route to market for its open systems flagship Pilot, with the knock-on effect that cost of sales will rise and operating margins will come under greater pressure.

BMC CEO Max Watson was cautious about committing BMC to targets for direct and indirect business.

?I don?t really know what the right balance is,? he admitted. ?That?s what we?re starting to find out now. If you do too much business through the indirect channel, then you are in danger of losing too much contact with the customer.?

He expected that the company?s open systems business would lean most heavily on the reseller community. ?In the open systems field there are a lot of third parties that have relationships with customers which we can leverage.?

The vendor also has OEM agreements with hardware and software vendors, including Hewlett Packard, Digital and Sequent. To broaden its coverage, BMC has set up a preferred partner programme, which has four levels of membership: consulting partners, which use BMC products as part of their system; solutions partners, which resell BMC products; technology partners, which integrate their products with BMC?s; and marketing alliance partners.