BMC Software has reported total revenue of $556.7m for the second quarter ended 30 September 2011, an increase of 11% over the $502.3m in the same quarter previous year. The company’s operating income was $161m for the second quarter of 2011, up 12.2% compared with the $143.5m in the previous year’s same quarter.

However, a decrease of 13% was seen in generally accepted accounting principles (GAAP) net earnings of the company, from $132m in 2010 second quarter to $115m in the same quarter this year.

BMC chairman and chief executive officer Bob Beauchamp said during the second quarter, they reported solid growth in total revenue, non-GAAP earnings and cash flow from operations, however, their performance was mixed. “While we are aggressively addressing our business challenges, we continue to see positive trends and increasing market opportunities in several initiatives, including cloud management, Software-as-a Service and professional services,” Beauchamp said.

The company said cloud management and SaaS transactions continued to show positive momentum, while professional services revenue grew 35% from the year-ago period and delivered a non-GAAP gross margin of 8%.

For full year fiscal 2012, BMC now expects cash flow from operations to be between $800m and $850m, which at the mid-point represents an 8% improvement over fiscal 2011.

Cloud interest sends BMC profits up 40%. Business software firm BMC beat Wall Street expectations during its second quarter, recording a 9% rise in revenue and a 40% jump in profits. It’s another sign that the IT market is growing again and spending is on the up.

The firm said that demand for cloud computing and hybrid data centres pushed BMC to its impressive figures. Revenue came in at $502.3m, up 8.8% from $461.8m a year ago. Revenue was boosted by a 37% increase in professional services and a near-20% rise is revenue from licences.

“Cloud computing is fundamentally changing the way customers are thinking about IT. BMC’s strong performance shows that we understand how to make cloud computing a reality today,” said BMC CEO Bob Beauchamp.

Bob; you are right. It’s only taken you how many years to catch on with the industry trend?

According to a survey conducted on behalf of software supplier BMC, the majority of European organisations that have cut cost from IT operations are reinvesting those funds into strategic IT projects. The survey of 300 European IT decision makers found that 60% were reinvesting their cost savings strategically. This makes a lot of sense as strategic projects can pay dividends in helping businesses grow when economic conditions improve. While those businesses that just save money without reinvestment could lag behind when recovery begins. Every organisation is different and what they choose to do with their savings will depend on a number of factors. Reinvestment is one option. But so too is reducing IT costs such as software or hardware maintenance in order to use the savings to save jobs. Mark Bartrick, Managing Director of Silver Bullet Associates says “cutting IT costs is not hard; simply negotiate better deals with your IT suppliers”.

BMC Software has announced the acquisition of middleware management vendor MQSoftware. The deal is expected to expand BMC’s management platform to enable clients to manage their entire mainframe infrastructure. The company claims that the unified offering will reduce costs by up to 30% by eliminating monitoring silos for transactions and messaging middleware; reduce downtime by 90% due to improved performance monitoring; and boost staff productivity by 40% by simplifying management tasks. BMC recently posted better than expected financial results, with a 3% rise in revenue to $450m. Software licence sales rose nearly 12% to $167m to boost net income to $82.4m, up from $1.2m for the year ago quarter. Although BMC has been active on the acquisition front, this is its first deal that will impact its mainframe business. Mark Bartrick, Managing Director at Silver Bullet Associates says “Mergers and Acquisitions are common in the IT industry, and with the difficult economic conditions driving down share prices, some IT suppliers have become attractive acquisition targets. Such consolidation can be a good thing and can help to eliminate some elements of cost. But be aware what’s in your IT Suppliers contracts regarding Mergers and Acquisitions and ensure you have control over what any acquiring supplier can do to your support charges or terms. Don’t get caught out with a sudden price hike or a cut in support services/hours”.