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What Do You Think of IBM Buying Lombardi?

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Today IBM announced another big acquisition with a definitive agreement to buy Lombardi.  Do you think it's a good acquisition, or is there too much product overlap, and will the companies make a good match?

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  • The BPM sector is hot and growing. No doubt about it. It will make the top 5 items in everyone's list of "What technologies will be even hotter in 2010."

    Think of IBM's announcement as the opening of a flood gate. It is going to be the first of many acquisition announcements in 2010 in the BPM space. IBM's move will send a strong signal to lots of their competitors that they should also be making strong moves in the space, and in fact they may already be a little late.

    I don't know of a single BPM company (ourselves included) that didn't post a record 2009 and doesn't have an even stronger outlook and bookings for 2010. With the economy the way it is, there aren't too many sectors that can make this claim. IBM knows this and others will follow. So, get ready for some interesting news to come!

    Brian Reale
    http://blog.processmaker.com


  • This acquisition will upset the balance of power among BPM product vendors in the market and is likely to trigger many reactions from other players. So I agree with Brian that this will be the first of many acquisitions in 2010.

    Whether it is a good match or not will depend on how and what IBM plans to do with Lombardi. IBM has acquired other products before, but in this case IBM has to apply more wisdom than in the past in they way it aligns Lombardi into its overall BPM strategy/approach. One can argue that Lombardi's success has been influenced to a good extent by its product simplicity - and this is an aspect that can beneficially be exploited by IBM.

  • Like @Jaisundar, I see this as shaking up the balance of power. I think Lombardi customers really valued their "culture" of BPM over other vendors and over the big guys (IBM included). If IBM can preserve or even nurture that culture, in addition to Lombardi's product offering, then this could be a very effective combination.

    From working at Lombardi previously, I think from a personnel point of view this is a very complementary acquisition - where Lombardi's strengths are in technology close to the process itself, and IBM has such a deep bench in the integration space and in back office tech.

    In Austin, we've seen IBM do acquisitions right (Tivoli exploded in revenues after IBM picked them up), and we've seen some go so-so (filenet?). Hopefully this one is in the winner category, because that would be good for IBM, Lombardi, their mutual customers, and the market.

    Time will tell... Lots of work to do for IBM and the folks at Lombardi. For me personally, I think this is a great thing for BP3. Expertise for BPM and for Lombardi's products in particular is going to be in high demand as IBM pushes the product out to more customers. We're looking forward to a blowout 2010.

  • I have three initial reactions to the news of the IBM acquisition of Lombardi.

    First, we do not know the price of the acquisition. The price will tell a lot about the nature of the acquisition and the state of the BPM industry.

    Second, in addition to its own WebSphere, IBM has in the past acquired Lotus Notes (which was also a workflow product, or touted as such), and FileNet. So this will be the third IBM acquisition in the space. It is unclear how this acquisition will impact the overall IBM strategy, especially as it relates to these other products. However, my concern is that Lombardi may get lost inside IBM.

    Third, a few years ago when BEA acquired Fuego there was a lot of talk about consolidation in the industry by the analysts and the press, none of which materilized. Today there are more BPM vendors than there were at that time. I am not sure that this acquisition necessarily protends a stream of acquisitions, especially when we do not know the terms of the deal.

    From an IBM perpective the acquisition does make sense as it will enable IBM to move more in to human-centric processes. However I feel that the industry is up for major changes, and it remains to be seen how agile IBM can be in the face of these changes.

    Rashid Khan
    Leadership BPM at http://bpm.rashid-khan.com
    Smartphone IT at http://mobile.rashid-khan.com

  • @Rashid- good points.
    If you count Webify, this is at least IBM's fourth acquisition in the space. No doubt there are other, related acquisitions that have been more vertical.

    To me, the key question isn't the price of the deal (though that matters), it is the way IBM looks at it: are they buying a business or business proposition, or are they buying some core technology to assimilate into the collective.

    If the former, then bravo IBM and Lombardi on a deal well struck. If the latter, then the BPM market will experience a set-back (briefly - others will fill the void).

    Regarding the lack of followthrough on the Fuego acquisition - I can tell you there was a lot of activity around acquisitions then - however, the market fell out from under all the EAI vendors. They weren't able to adapt to their slowing revenue growth by branching into BPM or other markets, and as a result, they no longer felt they could afford to swallow other vendors. Some of those vendors were quickly acquired - BEA, Webmethods, etc. And the rest looked like damaged goods (Vitria, Tibco, etc). So the consolidation actually happened opportunistically in the EAI/SOA space rather than in the BPM space.

    And you're right -this is a big challenge for IBM to be agile in the face of the changes going on in BPM and in Business Process generally (out there in the wild so to speak).

  • I am really curious to know what are the technical reasons (if any) for IBM's interest in Lombardi.

    Two areas that come to my mind are BPMN support and cloud-based BPM collaboration.

    As far as BPMN is concerned, IBM's implementation has been very slow in coming (even though IBM has been one of the major proponents in the OMG organization). Lombardi seems much stronger in that area.

    For what concerns cloud-based collaboration, IBM's BlueWorks has gathered much less support than Lombardi's Blueprint so far.

    Comments?

  • Based on this acquisition, I get the feeling that IBM shares the market fragmentation philosophy of some analysts, where the BPM market is divided into document-centric (IBM's FileNet), integration-centric (IBM's Process Server) and human-centric (now-IBM's Lombardi). In my opinion think this fragmentation is not really necessary, but a mere vestige of the origins of different vendors. Awareness and adoption of BPM is more harmed then helped by having a variety of similar solutions which try to draw distinctions where no clean categorization exists.


  • In my view, this is a great win-win for both. IBM which has separate lines of products Business Rules and BPM can now offer Integrated solutions for what I call UPP (Unified Policy and Process) space. Lombardi can hope not only to reach out wider clientèle and expand market share (for its product suite) but improve by adding capabilities such IBM's Smart SOA, Lotus Collaboration and Rational's Systems Engineering etc.

  • There's going to be a lot of thinking going on regarding pricing of Lombardi products. Does 'departmental' mean cheaper than FileNet/Websphere?

    FileNet has previously been positioned by IBM as 'content-centric' whilst Lombardi is positioned as 'human-centric'. If content isn't for humans, who is it for?

    If you're interested, I've written a longer blog on the takeover - the story of the day for all BPMers! See www.bpmfutures.com.

  • @uvaydog - interesting comment. If IBM could combine Lombardi+FileNet+Websphere+Lotus into a coherent whole - they could actually take on SharePoint+Exchange (or more to the point Outlook) for unstructured, ad-hoc true human processes, and that would be a true game changer! But alas, given IBM's silos and structure - it will never happen...

  • This move is an indicator to the traction that BPM sphere has acquired. However, I’m looking forward to see how this would affect Filenet product development and its the future releases.
    I do really hope that IBM would learn from the simplicity of Lomardi and would attempt to ease the Filenet application deployment process.

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    A great move for IBM as long as they do something positive with it. IBM have squandered the Filenet product which is aging and needs a thorough overhaul. With Lombardi they have a market leading BPM technology which they can marry with Filenet’s strong Content management capabilities.

    As always the concerns are; will IBM culture squash the Lombardi way? Will IBM be able to integrate the technology into it's stack, usually Big Blue doesn’t really bother, just puts a sticker on it! Finally what does it mean for Filenet BPM and does anyone really care.

    I'm really interested to see what Microsoft does, she has been courted by so many of the other BPM players, this move might finally force her hand. I disagree with the comment above Exchange is not considered a BPM suite, it has the raw power but none of the elegance of today's suite's.

  • While the choice of dance partner was a little surprising, the desire for a liquidity event in the Lombardi management team was there to see long ago.

    From Lombardi’s point of view, as others have pointed out, IBM has the broad based clientele. This will give them room to grow and leverage an existing, widespread sales force that is tightly integrated with the market place. I am sure there will be frustrations along the way, but the methods and techniques developed by the Lombardi team are exemplars to the industry.

    Other major technology vendors will sit up and take notice and may start looking for complementary acquisition targets. My guess is that Microsoft and SAP will perhaps buy someone that seems to fit. I think the Microsoft SharePoint value proposition is a little suspect (unless they bolt in a robust process platform … because Windows Workflow Foundation just doesn’t cut it – see my white paper – SharePoint as a Strategic Weapon – available free on P5 of the White Papers section of the BPM Focus web site). SAP has struggled to communicate a viable product story for anyone other than existing SAP application users

    See more of my analysis here - http://wp.me/p29Ta-2T

  • Well it seems that the replys so far are all over the board.

    At a minimum it is recognition and validation of the interest in, and potential growth opportunity for BPM related strategies and solutions across the board.

    Given IBM's marketing strength and influence in the industry, and assuming that IBM's interest in Lombardi is recognition of its need to offer more attractive solutions, this could be a boon to the entire industry generating more awareness and interest in BPM. A rising tide lifts all boats.

    Integrated with IBM Global Services' long standing Business Transformation and IT Strategy consulting services it also has the potential of placing more emphasis on the business issues, value and impact. Forcing the industry to take more of a "total business solution" approach, including products and services (both pre-sale consulting and post-sale integration / support) and lessening the focus on technology.

    It is interesting to note that internally, IBM is driving its people to Lotus apps, while Lombardi, at least in its marketing, is closely integrated with Microsoft's suite of products. Speaking of unintended consequences, obviously depending on what IBM does with it, the big winner in this whole discussion could be Microsoft. You have to remember that the godfather of collaboration, the inventor of Notes and Groove, is the CTO of Microsoft and the guiding force behind SharePoint and Office development.

    It remains to be seen. As others have pointed out IBM's success in integrating acquisitions is a mixed bag and it is a heavy handed culture that the people at Lombardi may not appreciate. Did they buy it to strengthen their product lineup? Did they buy it in order to transform its products to be more IBM centric? Did they buy its position and influence in the marketplace? Did they buy it to bury it?

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    BPM market is ripe for consolidation. This acquisition is an indicator of what is to come. Pure Play vendors such as Lombardi have been successful in selling to business audience and in building a best of breed BPM suite, which can be a good leverage for IBM. IBM has its own stack of BPM technologies which are still not fitting into a cohesive strategy. Only time will tell if IBM will be able to fit Lombardi into its technology and business strategy. How well the different software groups within IBM umbrella embrace this acquisition, will determine the overall outcome. I have worked with Lombardi for past few years and wish this great product survives and thrives under IBM portfolio. I wish IBM draws up a BPM strategy and positioning which will remove the confusion both internal to IBM as well as its clients and partners.

  • Interesting trail of conversations here. The positives I see with this buy out is the fact that in this region - Middle East, where IBM has a direct presence, support and knowledge would be more localized rather than through partners who only know how to sell software.

    Apprehensions are there if the passion and focus of Lombardi would still survive or get drowned in the Big Blue!

  • IBM should sort out the front end of this enlarged product range with something like mxGraph. Has nobody told them that users don't like slow interfaces? C'on guys, less of the server round-trips!

    Best,

    Raph

  • I don't know of a single BPM company (ourselves included) that didn't post a record 2009 and doesn't have an even stronger outlook and bookings for 2010. With the economy the way it is, there aren't too many sectors that can make this claim. IBM knows this and others will follow. So, get ready for some interesting news to come!

  • It seems old in comparison with this SAP Gravity tool running on Google Wave....
    http://www.youtube.com/watch?v=FaNhXPSCQWo

  • The BPM sector is hot and growing. No doubt about it. It will make the top 5 items in everyone's list of "What technologies will be even hotter in 2010."

    Think of IBM's announcement as the opening of a flood gate. It is going to be the first of many acquisition announcements in 2010 in the BPM space. IBM's move will send a strong signal to lots of their competitors that they should also be making strong moves in the space, and in fact they may already be a little late.

    I don't know of a single BPM company (ourselves included) that didn't post a record 2009 and doesn't have an even stronger outlook and bookings for 2010. With the economy the way it is, there aren't too many sectors that can make this claim. IBM knows this and others will follow. So, get ready for some interesting news to come!

  • I would suggest a comparison to what happened in ERP, over time a number of organisations and good products were swallowed up and the best bits absorbed into heavyweight suites. This may have served the larger enterprise initially but ultimately led to modularised process facing products effectively de-merging the cumbersome and costly giants. This may be the start of a series of acquisitions in BPM but will it ultimately be better for the consumer is the question that needs further thought.

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