BladeLogic

Prospectus Summary

PROSPECTUS SUMMARY
This summary highlights selected information contained elsewhere in this prospectus. This summary does not contain all of the information you should consider before investing in our common stock. You should read this entire prospectus carefully, especially the risks of investing in our common stock discussed under "Risk Factors" beginning on page 8, and the consolidated financial statements and notes to those consolidated financial statements, before making an investment decision. Unless the context otherwise requires, we use the terms "BladeLogic," the "Company," "we," "us" and "our" in this prospectus to refer to BladeLogic, Inc. and its subsidiaries.

BLADELOGIC, INC.

Overview

We are a leading provider of data center automation software to enterprises, service providers, government agencies and other organizations in North America, Europe and Asia. Our products and services enable organizations of any size to address the full lifecycle of data center management using one integrated solution for provisioning, change, administration and compliance across complex, distributed server and application environments.

Our solution provides IT departments the ability to effect rapid changes within the data center in a highly precise, secure and automated manner. Specifically, our products and services allow organizations to easily browse, provision, configure, patch, audit and remediate their servers and applications on an automated basis. Moreover, our solution allows organizations to enforce user-defined and industry-standard configuration policies with integrated auditing and remediation capabilities, resulting in enhanced compliance and security throughout the data center. Our sophisticated packaging technology, coupled with a comprehensive roll-back capability, drastically reduces the time, complexity and risk associated with rolling out applications from development to production.

We believe the benefits of our solution include improved data center stability and service quality, decreased application downtime, increased productivity of IT staff, reduced data center operating costs, greater control over configuration changes and increased responsiveness of IT departments to changing business requirements.

We have achieved strong financial results, with revenue increasing from $12.0 million in fiscal 2004 (twelve months) to $18.3 million in fiscal 2005 (twelve months) and $24.6 million in fiscal 2006 (nine months). Our revenue in our first fiscal quarter ended December 31, 2006 was $12.8 million, compared to $6.0 million for the quarter ended December 31, 2005, an increase of 111%. As of February 28, 2007, we had approximately 200 customers in our large and diverse installed base of customers, including nine of the Fortune Global 50 companies.

Our Industry

The data center, home to mission critical computer systems, is the nerve center of the IT department. To meet the demands of today's competitive business environment, organizations have invested hundreds of billions of dollars globally in data center assets, such as servers and application software, and are expected to invest another $240 billion from 2006 through 2010 on physical servers alone. With this growth in computing assets, data centers have become increasingly complex and difficult to manage, driving the need for large investments in personnel and software management tools. In 2006 alone, it is estimated that organizations globally spent $114 billion on managing and administering these assets, the vast majority of which was spent on in-house tools and personnel.

Recent technological trends, such as the adoption of web-based applications, the commoditization of computing hardware, the increased emphasis on compliance and security and the emergence of virtualization, have had a significant impact on the data center. These trends have resulted in:

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Proliferation of servers and software applications. In recent years, the number of physical server shipments has almost doubled, going from 4.2 million shipped in 2001 to 7.7 million shipped in 2006, and is forecasted to increase to 11.0 million by 2010. In addition, the adoption of web-based architectures has increased the rate at which new applications are created and made available to a broader base of users, and server virtualization technology, which creates multiple "virtual servers" on one physical server, has dramatically increased the total number of servers that need to be managed.


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High rate of change within the data center. Organizations require a highly responsive data center environment to keep pace with the needs of the organization, escalating security risks and the growing complexity of the data center. The rate at which changes are made to servers and applications has also been affected by the shift to web-based applications, which have shorter development cycles and deployment times, and emerging computer architectures, like utility or on-demand computing, which require the ability to implement changes in the data center on a nearly continuous basis.


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Increased emphasis on compliance and security. Organizations rely on their IT departments to stay at the forefront of operational, security and regulatory compliance in the data center. Operational compliance requires IT departments to be compliant with the evolving rules, best practices and policies of the enterprise. Security compliance requires IT departments to counter the growing number of security threats through the rapid and consistent provisioning of software patches. Regulatory compliance requires IT departments to establish, maintain, assess and report on the effectiveness of compliance with regulatory requirements.


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Significant increase in the complexity and cost of managing a data center. Maintaining the efficacy and integrity of the data center is a growing challenge given the ever-increasing complexity of the data center's underlying infrastructure, which may be comprised of thousands of physical and virtual servers, multiple operating systems and hundreds of diverse software applications. As a result, IT departments have increased their investment in the management and administration of the data center and become increasingly dependent on highly skilled and expensive personnel.

Our Solution

We have designed our products and services to provide a comprehensive solution to meet the challenges of managing the data center. The principal ways in which our solution addresses these challenges include:

Dramatically reducing the risk of change

Our solution enables IT departments to be more responsive to the needs of the organization by providing them with the ability to effect rapid changes in a highly precise, secure and automated manner. Our solution is designed not only to install and deploy software, but also to manage fine-grained changes to configuration items to ensure all parts of an application and its underlying infrastructure are configured accurately and consistently. Our extensive library of configuration items allows data center staff to precisely provision new servers and applications and to accurately identify and remediate misconfigurations that may adversely affect existing servers and applications. In addition, our solution's ability to automatically roll-back harmful changes enables data center staff to confidently increase the frequency of change in the data center.

Consistently enforcing operational, security and regulatory policies

Our solution is designed to help IT departments achieve continuous compliance with operational, security and regulatory policies. We provide data center staff with the means to define sophisticated and highly granular configuration policies, or "desired state" conditions. Using our solution, data center staff can scan and audit the data center environment at regular intervals to measure compliance against these configuration policies, generate reports on the state of compliance, and, if required, remediate the specific policy violations to bring a server or application back into compliance.

Reducing the time and resources required to roll-out applications

The roll-out of an application in the data center is a complex, time-consuming and costly process that requires the coordination of multiple IT groups within the organization. Our solution automates the application roll-out process by providing a sophisticated packaging technology that enables the deployment of an application and all its underlying configuration items via a package. Unlike other solutions that require the creation of a new package every time an application is moved from one environment to another, our solution allows a single package to be used across development, quality assurance and production environments. In addition, to mitigate the inherent risk and to reduce costs involved with the roll-out of an application, our solution can roll-back all changes or selectively roll-back a subset of the changes to quickly return the application to a stable configuration.

Significantly reducing the cost of data center management

The growing complexity of the data center, the proliferation of servers and applications, the increasing frequency of change and the high priority on compliance and security have dramatically increased the costs of managing the data center. To counter these increasing costs, we offer a comprehensive, cross-platform solution that automates the critical tasks related to managing the lifecycle of servers and applications. Our solution is designed to minimize lost revenues, reputational harm and remediation costs associated with downtime, avoid costs associated with security breaches and non-compliance with regulatory requirements, and drastically increase the productivity of the data center staff.

Our Strategy

Our objective is to enhance our position as a leading supplier of data center automation and management software. Key elements of our strategy include:

Extend our technology leadership, product depth and addressable markets

We plan to enhance our existing solution and introduce new data center automation software products that address emerging trends and regulatory requirements, and target new market opportunities, such as utility computing. We have made and will continue to make significant investments in software research and development to introduce new versions of our products that incorporate innovative features, improved functionality and address unique business requirements across different geographies and industries.

Expand our direct sales team, distribution channels and geographic markets served

We plan to continue investing in the expansion of our direct sales team and other distribution channels across all geographies. We intend to grow our direct sales force as well as our distribution relationships, including those with value-added resellers and system integrators. In addition, we plan to identify and select original equipment manufacturers to help extend our product distribution capabilities.

Broaden and develop strategic relationships

We plan to broaden our existing relationships and develop new relationships with leading technology and distribution partners, including software application vendors and systems integrators. We believe that these types of strategic relationships will allow us to expand our addressable market, increase sales of our software through joint selling and marketing arrangements, and improve our insight into emerging industry trends. We believe that there are many potential partners, and we plan on developing several strategic relationships in the near term.

Enhance and expand our customer support and professional services

We plan to continue to create and deliver innovative services offerings that provide faster deployment of our software, rapid resolution of problems and more value to our customers. As we increase our customer base and broaden our product platform and capabilities, we intend to expand the size and range of our customer support and professional service offerings. In the near term, we plan to enhance and expand our current training offering to ensure that our customers successfully deploy and administer our products in their own environment. We will opportunistically look to partner with highly qualified third party providers of professional services in order to complement our existing offerings.

Pursue strategic opportunities

We may pursue acquisitions that we believe will provide products and/or technologies that are complementary to our current offerings. We continually seek to enhance and expand the functionality of our solution and in the future we may pursue acquisitions that will enable us to offer more comprehensive functionality to customers. We currently have no plans, proposals or arrangements with respect to any acquisition.

Risk Factors

Our business is subject to numerous risks, which are highlighted in the section entitled "Risk Factors" immediately following this prospectus summary. Principal risks of our business include:

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we have a history of losses, a limited operating history and may not achieve profitability in the future;


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our operating results may fluctuate from period to period and within each period, which makes our operating results difficult to predict and could cause our revenues, expenses and profitability to differ from expectations during certain periods;


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our industry is intensely competitive, and most of our competitors have greater financial, technical and sales and marketing resources and larger installed customer bases than we do, which could enable them to compete more effectively than we do;


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if we are unable to develop and introduce new products or enhancements to existing products and respond to technological changes, if our new products or enhancements do not achieve market acceptance or if we fail to manage product transitions, our results of operations and competitive position will suffer; and


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our inability to identify, attract, train, integrate and retain highly qualified employees or the loss of key personnel may impair our ability to grow our business.

Our Corporate Information

We were incorporated in the state of Delaware on July 31, 2001. Our corporate headquarters are located at 10 Maguire Road, Building 3, Lexington, Massachusetts 02421, and our telephone number is (781) 257-3500. Our website address is www.bladelogic.com. The information on, or that can be accessed through, our website is not part of this prospectus.

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