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                                 UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

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                                    FORM 8-K
                                 CURRENT REPORT

                     PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934



         Date of Report (Date of earliest event reported): May 27, 2005


                               BMC SOFTWARE, INC.
             (Exact Name of Registrant as Specified in Its Charter)



        DELAWARE                    001-16393                   74-2126120
(State of Incorporation)     (Commission File Number)        (I.R.S. Employer
                                                          Identification Number)

              2101 CITYWEST BLVD.
                 HOUSTON, TEXAS                     77042-2827
  (Address of principal executive offices)          (Zip Code)

       Registrant's telephone number, including area code: (713) 918-8800



Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:

[_] Written communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)

[_] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)

[_] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act (17 CFR 204.14d-2(b))

[_] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act (17 CFR 240.13e-4(c))

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ITEM 1.01. Entry into a Material Definitive Agreement.

On May 27, 2005, the Board of Directors (the "Board") of BMC Software, Inc. (the
"Company") approved the Compensation Committee's recommendations regarding
executive compensation for the Company's CEO and senior executive officers for
fiscal 2006. The Compensation Committee set 2006 annual base salaries for Robert
E. Beauchamp, Dan Barnea, Cosmo Santullo, George Harrington, and Jerome Adams,
each of whom is a Company named executive officer for 2005, at the same levels
as 2005, or $700,000, $425,000, $425,000, $400,000 and $400,000, respectively.

The Compensation Committee also approved the annual incentive compensation plan
pursuant to the Company's Short-Term Incentive Performance Award Program, a copy
of which has previously been filed by the Company and is incorporated herein by
reference. The Compensation Committee established target annual incentives as a
percentage of base salary for each of Messrs. Beauchamp, Barnea, Santullo,
Harrington and Adams at 150%, 125%, 150%, 100% and 100%, respectively, such
amounts being unchanged from fiscal 2005. For fiscal 2006, the annual incentive
compensation plan has three components. The first component is a quarterly
incentive based on achieving certain earnings per share ("EPS") targets. An
aggregate of 25% of the annual target incentive, or 6.25% per quarter, is based
on the quarterly EPS targets. The second component is an annual incentive based
on achieving an annual EPS target, and 25% of the annual target incentive is
based on the annual EPS target. The third component, or 50% of the annual target
incentive, is based on achieving an annual corporate operating margin target.
The targets have all been set and approved by the Compensation Committee and the
Board. With respect to the annual EPS target and corporate operating margin
target, no bonuses will be paid if the Company does not achieve a total revenue
goal set by the Compensation Committee and approved by the Board and the actual
bonus payments under such awards may be less than or greater than the target
amounts depending on whether and the extent to which the goals upon which such
bonuses are based are achieved.

The Compensation Committee also approved a three-year measurement period under
the Company's Long-Term Incentive Performance Award Program ("LTIP"), a copy of
which has previously been filed by the Company and is incorporated herein by
reference. Messrs. Beauchamp, Barnea, Santullo, Harrington and Adams are
eligible to participate with target LTIP award amounts of $1,400,000, $500,000,
$500,000, $300,000 and $300,000, respectively.

The Compensation Committee also awarded options to purchase shares of Company
stock to each of Messrs. Barnea, Santullo, Harrington and Adams as follows:
175,000 shares, 250,000 shares, 250,000 shares and 175,000 shares, respectively.
Such options will vest 6.25% per quarter over the next four years. Mr. Beauchamp
was not awarded any options by the Compensation Committee.

ITEM 9.01. Financial Statements and Exhibits



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10.10 BMC Software, Inc. Short-Term Incentive Performance Award Program (as
amended and restated); incorporated by reference to Exhibit 10.10 to the
Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2004.

10.11 BMC Software, Inc. Long-Term Incentive Performance Award Program;
incorporated by reference to Exhibit 10.11 to the Company's Annual Report on
Form 10-K for the year ended March 31, 2003.



                                   SIGNATURE

      Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.

Date:  June 1, 2005

                                   BMC SOFTWARE, INC.


                                   By: /s/ ROBERT H. WHILDEN, JR.
                                      --------------------------------
                                      Robert H. Whilden, Jr.
                                      Senior Vice President, General
                                      Counsel and Secretary



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