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Anne Stuart’s BPM in Action

Dennis Byron

Gartner Says BPM Software Growth to Outpace Market in 2009

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Actually that is not exactly what Gartner says in its December 11 prediction about upcoming software spending. The exact wording is:

"In the current market conditions, organizations will look to streamline processes even further, utilizing products such as business process management (BPM), data integration, data quality, master data management (MDM), compliance and risk solutions and corporate performance management."

I'm interpreting "even further" to "outpace market" because overall Gartner is pessimistic about what you'll be spending overall on enterprise software next year. In fact, I don't know exactly how it got from its pessimistic tone to a prediction of 6%-plus growth. I would guess (a word I could not use when I was predicting this number at IDC) more like flat.

There is a couple of things to remember about "software spending" when you see press releases such as this from Gartner or IDC.

  • Half of the $200-billion-plus number at least is pretty much locked in because it represents subscription maintnenance contracts on already installed software. Of course that could even suffer to the extent that the contracts are held by IT users that file for reorganization or just plain go belly up. If, per some unlikely chance, some major enterprise software supplier were to increase its maintenance subscription rate, this percentage could even rise.
  • 25-35% of the total relates to software upgrades, new seats, new versions if they are not included in the maintenance contract, and similar "cost of doing business" expenses. Of course new seats will probably not be a big issue in 2009 but often new versions are required to relfect annual governmental regulation changes or other similar unavoidable activity
  • 10% or so is represented in the checks Dell, HP and others mail to Redmond to put Windows, Office, and so forth on PCs and servers in the factory
  • The remainder is the part of your budget that the suppliers really compete over, software for a new project or to totally rip and replace some legacy application or middleware, or similar things you usually put out in Request for Proposal form

It is the latter type of project where business process management (BPM) software is most relevant. There is not enough of an installed base yet to make it a major factor in the maintnenance or upgrade category and BPM is rarely bundled in at the factory.

So, on one hand (good IDC/Gartner speak), BPM is going to be on lists of projects that get cut in the economic downturn that is upon us before maintenance/upgrade expenses get cut. But on the other, as Gartner points out, you need BPM to streamline processes.

-- Dennis Byron

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In the process of finishing an upcoming IT Business Edge article on software-market consolidation and beginning a similar article on the ERP market at year-end, I hit a two-fer interview affecting both subjects. I talked with Ned Lilly, CEO of ERP... Read More

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Business process management and optimization -- philosophies, policies, practices, and punditry.

Anne Stuart

I am the editor of ebizQ.

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