Bain Capital Offices

Bain Capital Offices

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Boston

Boston

John Hancock Tower
200 Clarendon Street, Boston, MA 02116 United States

P:+1 (617) 516-2000 F:+1 (617) 516-2010

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New York

A New York

590 Madison Avenue
42nd Floor, New York, NY 10022 United States

P:+1 (212) 326-9420 F:+1 (212) 421-2225

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B New York Bain Capital Ventures
Bain Capital Ventures

632 Broadway, New York, NY 10012 United States

P:+1 (212) 822-2900 F:+1 (646) 439-9100

London

London

Devonshire House
Mayfair Place, London, W1J 8AJ United Kingdom

P:+44 20 7514 5252 F:+44 20 7514 5250

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Munich

Munich
Bain Capital Beteiligungsberatung GmbH

Maximilianstrasse 11, 80539 Muenchen, Germany

P:+49-89244410700 F:+49-89244410731

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Mumbai

Mumbai
Bain Capital Advisors (India) Private Limited

2nd Floor, Free Press House
Nariman Point, , Mumbai 400 021 India

P:+91-2267528000 F:+91-2267528010

Hong Kong

Hong Kong
Bain Capital Asia, LLC

51/F Cheung Kong Center
2 Queen's Road Central, Hong Kong, Hong Kong S.A.R., China

P:+852-36566800 F:+852-36566801

Shanghai

Shanghai
Bain Capital Advisors (China) Ltd.

46/F Two IFC
8 Century Boulevard, Shanghai, 200120 China

P:+86-2161632000 F:+86-2161632088

Tokyo

Tokyo
Bain Capital Asia, LLC

5F, Palace Building
1-1-1 Marunouchi, Chiyoda-ku, Tokyo 100-0005 Japan

P:+81-362127070 F:+81-362127071

Palo Alto

Palo Alto

335 Bryant Street, Palo Alto, CA 94301 United States

P:+1 (650) 798-2500 F:+1 (650) 798-2501

Chicago

Chicago
Sankaty Advisors Illinois, LLC

1603 Orrington Avenue
Suite 815, Evanston, IL 60201 United States

P:+1 (847) 563-5330 F:+1 (847) 563-5331

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Luxembourg

A Luxembourg
Bain Capital Luxembourg S.à.r.l.

4 rue Lou Hemmer, L-1748 Luxembourg, Luxembourg

P:+352-2678601 F:+352-26786060

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B Sankaty European Investments, S.á.r.l.
Sankaty European Holdings, S.á.r.l.

4 rue Lou Hemmer, L-1748 Luxembourg, Luxembourg

P:+352-267866 F:+352-26786651

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Melbourne

Melbourne
Sankaty Advisors (Australia), Pty. Ltd.

Level 20, 101 Collins Street, Melbourne, VIC 3000 Australia

P:+61 3 8102 8600 F:+61 3 9014 6930

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  • Bain Capital Private Equity
    • Bain Capital Private Equity

      Bain Capital Private Equity pioneered the value added investment approach. We partner with management teams to provide strategic resources that build and grow great companies. We have made over 260 investments generating industry leading returns for many leading endowments, foundations, pension funds and individuals.

      »Visit the Bain Private Equity Site
  • Brookside Capital
    • Brookside Capital

      Brookside Capital is the global long/short public equity affiliate of Bain Capital. We employ a fundamental investment approach with a team of industry-focused professionals to identify opportunities that offer capital appreciation over a multi-year time horizon.

      »Visit the Brookside Capital Site
  • Sankaty Advisors
    • Sankaty Advisors

      Sankaty Advisors, the credit affiliate of Bain Capital, LLC, is one of the nation's leading managers of high-yield corporate credit obligations. With approximately $22.3 billion in committed capital, we invest in a wide variety of instruments, including leveraged loans, high-yield bonds, stressed debt, distressed debt, mezzanine debt, structured products and equity investments.

      »Visit the Sankaty Advisors Site
  • Bain Capital Ventures
    • Bain Capital Ventures

      Bain Capital Ventures is the venture capital affiliate of Bain Capital. We focus on seed through late-stage growth investments in business services, software, digital media / mobile / ecommerce, and healthcare IT and services companies. Bain Capital Ventures has made over 100 investments since our launch in 2000.

      »Visit the Bain Capital Ventures Site
  • Absolute Return Capital
    • Absolute Return Capital

      Absolute Return Capital (ARC) is the absolute return affiliate of Bain Capital. The team manages assets in fixed income, equity, commodity and currency markets to produce attractive risk-adjusted returns while maintaining low correlation to traditional investments.

      »Visit the Absolute Return Capital Site

Newsroom BMC Software aims to be more aggressive as private company

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News
Date: 
October 18, 2013
Author: 
Larry Dignan

Summary: Here's why tracking newly private tech companies matters: Chances are good that at least one of your go-to enterprise vendors will be going private at some point.

BMC Software's recent move to go private highlights an enterprise technology trend that will impact buyers in some way. The biggest question revolves around whether customers benefit or excel when your large enterprise provider goes private.

Here's why tracking newly private tech companies matters: Chances are good that at least one of your go-to enterprise vendors will be going private at some point. Some of these vendors will drop out of site and restructure heavily. This restructuring could ultimately affect the support the customer sees. Other companies will go private, retool and become more aggressive and innovative.

BMC Software plans to be in that latter category. According to Bob Beauchamp, CEO of BMC Software, the company is poised to better pursue growth markets as a private entity. Why? BMC will have multiyear and annual spending plans compared to its previous 90 day cycle that would pause at times to hit the financials Wall Street demanded.

What's unclear is how this will play out. The tech giant as private company history is mixed. Some companies go private, rebuild and go public again and do well. Seagate Technology is one example of a success story. Other companies such as Avaya and Novell have had more mixed results. Infor, an ERP competitor, has made some strong product strides, but some analysts question whether it has the balance sheet to compete with SAP and Oracle. BlackBerry is likely to go private and could be split up. Dell needs to diversify away from the PC business, but the effort will take years to play out.

We caught up to Beauchamp and BMC CTO Kia Behnia to talk shop and the master plan as a private company.

What are the perks of being private so far? Beauchamp said he expects that BMC will be able to be a lot more aggressive. "We now have the ability and flexibility to behave in a less predictable manner," he said. Much of this flexibility comes from being freed from a 90 day spending plan cycle. In a public company, projects are started, paused and restarted all based on how tight the quarter is relative to Wall Street expectations. "I had a CIO of a Fortune 500 company say 'I wish we were going private' because he had to manage his budget to the last day of the quarter and then wait for the CFO to release funds to spend again." By going private, BMC is able to spend on annual and multiyear investment plans instead of riding the quarter ups and downs.

Behnia added another argument for going private is that funds that would have been used for stock buybacks could be funneled into acquisitions and research and development. Overall, it remains to be seen how funds get used. After all, private companies do have to pay out dividends to owners.

Enterprise software is evolving under selection pressure from challenging economic conditions and the adaptive possibilities afforded by cloud computing, mobility, big data analytics and social engagement.

BMC will spend on cloud, acquisitions, big data and becoming "a standard in the management layer." Beauchamp said that the company plans to aggressively chase SaaS, big data and cloud computing. The general idea is to use BMC's role as the Switzerland of IT and business management software to connect systems with one management console. "We can now have an element of surprise and be first to market," said Behnia.

Do customers care? Beauchamp said he has a whole presentation on what it means for BMC to go private, but hasn't had to use it. In most cases, CIOs ask if anything is dramatically changing, Beauchamp says no and technology talk ensues. BMC has had to communicate more with its employee base. "There are enough stories about companies going private for restructuring that you need to communicate directly to employees that BMC is about a growth play," said Beauchamp. One customer, however, cared, but that's because it was a government agency wanting background on Bain, an owner of BMC. Bain became an election issue last presidential election.

The plan. BMC's core strategy is to provide an integrated environment to manage IT and digital services. Think of an ERP system to manage technology and business infrastructure. Most products in the BMC portfolio will be integrated, said Beauchamp.

Where are BMC's bets going? Beauchamp said that cloud, SaaS and mobility are multiyear investments. These businesses will take years to develop, but deliver long product cycles. Growth in these areas will come via acquisitions and organic growth. Behnia noted that BMC's efforts to launch enterprise app stores and manage bring your own device programs. Behnia argued that the workforce is going mobile and wants self service at the same time the IT department wants fewer support calls.

Partnerships. BMC has crafted a few high-profile partnerships with cloud providers. For instance, BMC has hooked up with Salesforce to jointly sell Remedyforce, an IT service management service. Amazon Web Services, another key BMC partner, points directly to the company to manage hybrid cloud environments. Beauchamp and Behnia said similar partnerships will be rolled out. The idea is that BMC wants multiple partnerships to manage everything from Azure clouds to VMware as on-premise and public cloud infrastructure integrate.

Behnia said BMC would be interested in OpenStack, but hasn't seen customers adopting it just yet. BMC usually waits until customers actually deploy to add management functionality. "OpenStack lacks capabilities for mission critical environments today, but development and enthusiasm is growing," said Behnia. Beauchamp added that BMC will remain agnostic and plug into any infrastructure. "We've abstracted management so we can plug and play. Customers don't want to be hardwired into an infrastructure stack," said Beauchamp.