BMC announced yesterday its intent to buy ProactiveNet, a 7-year old, privately held niche provider of tooling that dynamically sets alarm thresholds based on self-learning of system behavior. BMC did not disclose terms for buying the Santa Clara-based provider, whose R&D team is back in India.

It adds a piece that has long proven elusive for systems management vendors: providing realistic thresholds for system alarms, rather than arbitrary ones that are typically set by hand. ProactiveNet uses self-learning algorithms to chart a system’s normal behavior so it can flag what are true rather than theoretical outliers.

At this point, BMC is making an offer that is subject to formal approval. Once the deals closes, BMC expects to fold the technology into its performance and event management offerings.

But it doesn’t come without controversy, as BMC previously had a reselling relationship with rival Netuitive, a smaller 5-year old firm whose sales kicked in last year with 4x growth. By comparison, ProactiveNet hit 56% year over year growth in 2006, but over a larger revenue base.

Tom Drain, BMC’s program manager for distributed systems management products, said the primary differentiator between the two products was ProactiveNet’s ease of use. “It was primarily from time to value, that was one of the differentiators that we liked.”

But Drain conceded that, although he expects little issue with integrating ProactiveNet’s products, that BMC has had limited experience with them in the field, where they crossed paths at just a handful of customers. ProactiveNet’s interfaces were only received certification by BMC last summer.

Netuitive president Nicola Sanna countered the difference is that its product is more functional than ProactiveNet’s. “If you want to do very advanced analytics, there is no comparison,” he claimed. “They were the more established player, but their functionality was less deep.”

As to the BMC reselling relationships, Sanna not surprisingly minimized it, and claimed that BMC comprised less than 10% of the 50-person company’s 175 customer-base. By comparison, the company was 30 people with 70 customers when we first spoke with them two years ago, and at the time, most of its initial growth spurt came from the BMC relationship.

According to Drain, for now BMC has no immediate plans to terminate the Netuitive relationship, although he obviously would not make any future commitments.

BMC claims that the amount being paid ProactiveNet which numbers over a hundred staff, shouldn’t be material to its earnings. Evidently the market agreed, with BMC shares dropping by $0.23, or less than 1%, in trading today.

Regardless of the merits of the deal, BMC’s reversal of tracks in buying a competitor to a company with which it had a resale agreement is either a tale of spurned lovers, or one getting too big for its britches.

Perhaps there is a real technology differentiator, but we have not had the chance to conduct an apples- to-apples comparison to validate either side’s arguments.

Nonetheless, what’s surprising is that, of the two players, BMC chose the older, larger player, and one with which it did not have a current relationship. The conventional wisdom is that, all other factors remaining equal, it is simpler to absorb a smaller firm, and one that you’re familiar with. Clearly something must have gone askew between BMC and Netuitive, which, by the way, continues to maintain a reseller deal with NetIQ.

And obviously, this couldn't have been a surprise to Netuitive, which just scored $8m in funding back in April.

Who says this industry is boring?

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