This morning Progress Software announced the acquisition of Savvion for $49 Million. On the heels of last month’s acquisition of Lombardi by IBM, I think it’s safe to say this marks a real turning point in the market for BPMS. To me it is a disquieting one, as it suggests the failure of BPM’s “business empowerment” promise to translate into sustainable revenue for the platform vendor. The transaction price here is kind of shocking, surely a sign of the shaky current economy, but the larger trend is also disturbing.
If we go back just a few years, four vendors on the business-centric end of the BPMS landscape stood out by empowering business to play a direct role in process implementation: Lombardi, Savvion, Fuego, and Appian. Their software featured model-driven design based on the BPMN standard. It encouraged a new agile iterative design style based on business-IT collaboration rather than tossing business requirements over the wall. Where most BPMS vendor projects operated in a bubble disconnected from their customers’ larger business process modeling and analysis efforts, these four vendors stood out by saying it would be better to unite them, to put business at the center of BPMS, not just at the center of process modeling and analysis. If Smith and Fingar’s 2002 BPM: The Third Wave was the vision, these four vendors came closest to fulfilling it.
Fuego was acquired a few years ago, and now suddently two of the other three are gone, absorbed into the larger SOA/middleware melting pot. Appian is still hanging out there, but probably not for long. What does it mean? Maybe even greater success for BPM under the wing of larger, more financially secure companies. But I worry that the notion of business-empowered implementation, those BPMS vendors’ sole reason for being, if you ask me, will fade away.
There is room for hope. Fuego, absorbed into BEA and now Oracle, today seems to be the tail wagging the Fusion middleware dog, at least the BPM piece of it. IBM could choose to follow a similar path with Lombardi, although their initial positioning has Lombardi pigeonholed in a separate “departmental” BPM corner. Progress does not have another BPMS to complicate the Savvion product integration, but the synergistic Progress components featured in the acquisition announcement – complex event processing and “business transaction assurance” – seem quite disconnected from what Savvion brings to the table.
I like Savvion’s products and what they have brought to the BPM market. They were the first to offer a free BPMN modeler, for instance, and even today they continue to innovate with features like tabular process design and analysis. If Progress can embrace those business empowerment values and not bury them beneath an IT-centric middleware stack, maybe this will signal a BPM market heading to a brighter and more mature future.
Hey Bruce,
Why is this a surprise? Lombardi and Savvion have been shopping for a buyer for quite some time. VC’s that back companies like these expect a return on investment through a liquidity event typically within 5 to 7 years. A liquidity event being one of three things usually; IPO, sale to another company, or sale of ownership of company to another investor. With the market still being bad for IPOs and investors pulling back, expect companies that received VC backing 5+ years ago to be looking for another a liquidity event of some kind to occur. The next one to take a close look at is MetaStorm. They are majority owned by Venture Capitalists and had a failed IPO in 2008. Investors there are certainly looking to find some way to close that investment through a some kind of liquidity event.
As far as Appian is concerned, we received our first round of VC in 2008 and the original founders maintain majority control over the company. We don’t have any pressure to sellout and given our rapid growth and strong financial health, we have no motivation to find a buyer. Our number one commitment is to our customers and the advancement of our BPM technology and not to a VC firm pressuring for a return on their investment.
We are looking forward to 2010 and will miss competing with Lombardi and Savvion. We’ll pour out a cold one on the street in their honor. Of course the counter argument goes, Lombardi and Savvion could be even stronger at their new homes. But they would have to defy the existing precedent (FileNet / IBM) (Staffware / Tibco). From the looks though of the acquisitions (IBM positioning Lombardi as departmental workflow) (Progress/Savvion learning how to sell to the business instead of IT), the bets are not in their favor.
Don’t despair. BPM is still growing and these recent acquisitions are bringing even more light onto the importance companies buying a BPM platform to power and improve their critical processes. The value proposition of BPM remains as strong as ever.
Malcolm Ross
Director Product Management
Appian Corp
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This post was mentioned on Twitter by skemsley: Bruce Silver on the trend in BPM acquisitions: The Beginning of the End in BPM? http://j.mp/70q3FF…
[…] and Savvion ? that?s two out of the three announcing acquisition in less than a month.? Bruce Silver recalls the line-up a few years back and lists ?four vendors on the business-centric end of the […]
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[…] The Beginning of the End in BPM? « BPMS Watch Bruce Silver on Progress-Savvion acquisition. “I think it?s safe to say this marks a real turning point in the market for BPMS. To me it is a disquieting one, as it suggests the failure of BPM?s ‘business empowerment’ promise to translate into sustainable revenue for the platform vendor.” Also see comment by Malcolm Ross (of Appian) at the end. (tags: bpm) […]
This is certainly the end of the beginning… Compare this to the maturation of the DBMS, once there were scads of offerings, now there are really only three enterprise choices (Oracle, MSSQL, DB2)… Looks like we’ll only have three real enterprise choices for BPM.
[…] This post was mentioned on Twitter by Sandy Kemsley, Eric D. Schabell, kenlacrosse, Andy Winskill, Jose Gabriel García and others. Jose Gabriel García said: RT @JGabrielGarcia: Bruce Silver: ¿El principio del fin en #BPM? http://bit.ly/6A2i3C. Atencion al comentario de Appian al post. I agree. […]
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I believe strongly that there is a much larger play here. Today’s BPMS products mentioned above – didn’t quite, truly provide for a business empowered solution. Anyone who has seriously applied these on many many different initiatives – would agree with that. Don’t get me wrong, these are great products and provide a great value.
But, they missed the point on complete “Process Management Lifecycle”; and many other implementation limitations that hinder a large scale roll-out.
While I fear that company’s such as ORACLE and IBM would squander the opportunities – that they have the power to realize. I also believe that a “larger scheme of BPM related things” are in play. And, I would suggest that IBM is best positioned to leverage this opportunity – among the bigger (biggest of plahyers).
Having said that, there are still companies such Appian – which are not “shopping” for a buyer as they are able to sustain themselves on their own. Jaan Baan’s Cordys – is a sleeping giant in that regard. In the open source arena – I would like to see Intalio|BPM succeed as well.
Certainly, an interesting dicussion or debate to have. Only time will tell.
Kunal,
Excellent points. While many BPMS vendors talk about “enterprise BPM,” very few have developed product features geared to marrying business empowerment with an enterprise-scale effort comprising dozens of projects simultaneously under development. Lombardi is one of those, and so it will be interesting to see if IBM can harness those features or consign Lombardi to the “departmental” box. If the big middleware vendors try to incorporate the good parts of the BPMS pureplays they acquire (instead of crushing the life out of them), all this consolidation could prove a good thing for BPM.
Not only is this not the beginning of the end, but it is not even the end of the beginning. I have no experience whatsoever with all the vendors you have mentioned, but I have suffered from the lack of progress in bridging the BPMN – BPEL gap in both IBM and Oracle products.
When we were vendor-shopping for a SOA middleware in my last company (a medium-sized telco), IBM’s exaggerated claims of seamless integration between the business view and the process execution convinced us to go with WebSphere. Unfortunately, the technology was at least five years from living up to the promise. The rest of the vendors (TIBCO, BEA, Oracle)did not even claim to offer an automated way to keep the two worlds in sync. Oracle is even further behind, still struggling to fully integrate its own BPEL engine with the Service Bus it acquired from BEA. BPMN is not their current concern and it seems like they don’t understand what it can do for them.
I really don’t know if any of the major middleware players trully understand the promise of BPMN (maybe with the exception of IBM). On the other side of the spectrum, you have all these vendors that I had never heard of, probably because they can not compete with the behemoths in the BPEL – ESB world.
By itself, BPMN is of very little use (capturing requirements). It is when these processes can be executed that you get true value and you need to accept that process execution will involve both BPEL for long-lived processes and ESB microflows. You need to incorporate SOAP interfaces, structured data and more exceptional paths than any business person cares to deal with.
I hope that IBM will lead the way and perfect what they claim they already have. If they manage to get their software right, you will see a new generation of enterprise middleware, focused on the end-to-end business process.
Hi,
Im looking online training for IBMBPM and Appian. I am planning for one tool to start in March.
I am in PST time zone now. Please get schedules after 8 pm PST.