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Are the Days Numbered for BPM Pure Plays?

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Following on the heels of another big BPM M&A this week with Progress buying Savvion, and as Tony Baer brings up over at OnStrategies Perspectives, are the days numbered for BPM pure plays?

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  • The hard problem for BPM vendors is that BPM is a 'disruptive' sale. Once you begin crossing departmental boundaries, the sales cycle increases and the complexity of the project increases. A company like Oracle can sell BPM as an add on, while the pure play company counts on sales to stay alive...

  • No. They are not numbered at all! The days of "legacy" BPM pure plays are numbered. But in there place there will crop up a new breed of BPM pure plays that are based on 21st Century technologies such as SaaS, Cloud, smartphones, social networking technologies, etc.

    The reason for my conviction issimple. BPM is about agility. Stack vendors are generally unable to provide agility and BPM as a part of the stack makes it more rigid, expensive and hard to change. As I have said in my other posts, there is a need for simplification in BPM and getting processes automated quickly. There is a need for simple workflow that is used by the masses. Companies that address that need will be the next BPM pure plays.

  • I definitely believe the answer to the question is "yes". BPM has been a market in the making for too long. Longer even than other areas of the SOA Market! Coupled with the fact that the market never really reached mainstream and the fact that ALL major vendors have an offering, I find it hard to believe any small(er) company can make it.

    Savvion was a good product, with good customers in a bad market. If this is what they are worth, you can only imagine!

  • I think Mr. Khan hits on a good point - new vendors leveraging the cloud are likely to emerge. They may not even call themselves BPM vendors though... so it may not be obvious to everyone that that is the space they're addressing. But clearly that is the best path for a new entrant to disrupt. The second source of disruption may be open source BPM tooling.

    But yes, I think legacy pure plays are unlikely to reach over $1B in revenue, and therefore eventually they're buyout targets.

  • Tony Baer hit the nail on the head when he said "the cold hard facts are that anytime, anything executes in software, IT must be front and center. So much for bypassing IT."

    Exactly. But not every BPMS is based on going around IT. ActiveVOS is a BPMS that is instead geared toward fostering collaboration, not turf battles, between business and IT. Enterprises naturally look for IT to continue to play its pivotal role in the development of new applications. The development just needs to be done with significant input from business users, not by expecting those users to actually develop the apps themselves (as if they want to).

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    BPM pure play vendors have shaped the BPM market to what we see today. The intense focus on product capabilities, providing business value and maturing the application of BPM concepts has helped pure play vendors succeed and expand in a very short span of time. This success has become a bane, as the larger players attracted to pure plays and have started acquiring them. I am seeing a cycle where we might see some consolidation but there will still be a major play for pure play vendors. The pure play BPM vendors have differentiated themselves by targetting the business audience and I am not sure how the enterprise software vendors will match this focus. Let us wait and watch.

  • BPM Pure Plays are at their best right now!! We are the innovators. Oracle, IBM, Progress and SAP are simple acquirers. They saw that BPM vendors were delivering solutions extending their own and wanted a piece of the action. Just because several well know BPM players - Lombardi, WebMethods, BEA/Fuego and Savvion - have been subsumed into larger organizations proves that pure plays such as HandySoft, Appian, Metastorm, Cordys, K2, BizAgi and others have viable products meeting unique market requirements. We will continue to drive innovation in specific areas. We might be forced to become more agile, customer oriented and price sensitive because of intense competition, but that is captialism. The market wants solid, innovative and responsive vendors that meet their needs. Some companies want to work with the big guys like IBM and Oracle. But many are very happy to work with BPM Pure Play vendors becuase of our dedication to the art and science of BPM both from a product perspective and an implementation methodology. I am personally very excited for 2010.

  • Not sure if I totally agree with Scott – selling BPM as an add-on is not an effective approach if the add-on value is not directly linked to a real pain. There have been many pure-play BPM sales to customers who already own the BPM offerings of the stack vendors – because, as Rashid points out, pure play BPM vendors offer greater flexibility, better time to market, and lower TCO than their heavier stack counterparts.

    In our experience the nature of the sales force in the stack vendors dilutes the value of BPM because the focus moves strongly back to IT infrastructure and away from the business. This means that there is still a huge market for BPMS vendors who provide emphasis purely on business process improvement with technology that is usable by business people -- and the more aspects of the business (strategy, goals, capabilities, systems, people, process interrelationships, etc) the BPMS vendor can provide visibility to and factor into enabling those improvements, the better.

  • I also agree with Mr. Kahn, but I'm not sure the BPM was ever a "pure play". There are just too many pieces - organizational, procedural, and technical - that have to work together in a successful BPM environment.

    The good news is that in this complexity there is lots of room for vision and innovation. Will those companies and/or solutions look like they do today? Aboslutely not - or at least they better not.

    BPM, taken to some logical conclusion, is not a single set of application code, it has to be a business strategy. It has to be an approach to business that seeks to align and optimize business resources around an effective operational strategy. It has to be able to take advantage of what is good about the current environment as well as being able to integrate new ideas and new methods.

    In my view the market for BPM has yet to be defined. We are just at the beginning of our understanding of where this is going, and where it might lead us - far too early in the process to even begin to understand what the future will hold.

  • I agree with Mukund Balasubramanian. BPM has been touted as the next big thing for the last 25 years. And then a recognition of the confluence of BPM and Workflow. More than 2 decades, and it still did not become mainstream. I think BPM will become an add-on to ERP, PaaS (Platforma as a Service), etc.

  • Yes, in the case of the original ‘Pure Play’ BPM vendors – after 10-15 years hard work it’s not surprising that their founders are looking to realise their investments. With more recent entrants it becomes a matter of definition – is Cordys a ‘Pure Play’ or a SaaS/Cloud player?

    In any case I don’t think the rise and fall of individual companies, or even individual products, matters so much – there seems to be no shortage of replacements.

    It is the ‘Pure Play’ vision that matters most – process improvement as well as process execution, simplicity of change as important as the process functionality. I wonder whether that is partly why IBM has bought Lombardi – to clearly, deeply and finally show their product developers what a BPM product should look like. ‘Now take the Websphere stack, with all of its scalability and resilience, and make the front end look like this’ might be the instruction. If so, the days of ‘Pure Play’ might actually just be beginning…

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    The pure plays are limited in their ability to reach enterprise level, cross functional usage which are driven by extensive usage of other platforms like ESB, etc.
    Enterprises also realize that as the adoption and awareness of BPM increases within, the need for a more comprehensive middleware layer becomes more important.
    Both these factors are probably playing out a key role in the market consolidation activity taking place.
    In summary, pure play tools which reach a threshold, will have to merge to continue pursuing a larger growth story within their customer organizations

  • We should separate out two distinct concepts: BPM companies and BPM technology. BPM technology is not a pure play and never was meant to be one. The problem was that it was ahead of its time and that's why it didn't gain much speed until only recently. What caused this change? Simple - the birth of the modern Web Service - simple, fast, effective integration. Without this BPM could never realize its full potential. So, from a technology perspective it is less of a pure play now than it ever was.

    However, here is the dichotomy. Thanks to the interconnectedness of today's BPM technology, BPM vendors can and will become more pure plays. Who needs to be part of a giant Oracle or IBM stack when as a vendor I can simply sell into their existing client base and fill the needs and gaping holes that they leave behind in their clients. For this reason, it is easier to be a pure play today than it ever was previously.

    Brian Reale

  • I think we are seeing the results of a maruring BPM market - there are too many undifferentiated players, too little true innovation among the competitors.

    Over the coming year or two we will see 1-2 standalone BPM companies remaining (I don't say pure play because I think they will include more of the real-world process stack than they do today), and all of the majors with BPM as part of their stack.

    Then we'll see the next rev of process technology. I agree with Rashid that we need a process (workflow) tool for the masses, but I think it will a melding of process+collaboration for the enterprise - not just workflow.

  • Those of us with an emotional connect with BPM tend to look at the pure-plays as pedegree. And there is possibly some understandable rationale behind that thinking because we assume their product vision & roadmaps will be uncluttered and driven solely by the tenets of BPM thinking.

    But if you look at it objectively, it might become apparant that this assumption need not be right. I'd like to quote from Brian Reale's comment here "We should separate out two distinct concepts: BPM companies and BPM technology"

    So if by Pure-play we are referring to the legacy of the BPM company, well, then I would think their days may indeed be numbered.

    But if we look at the evolution of BPM (or BPM technology) itself, then whatever is happening right now, are shuffles and shifts that may not immediately appear to fit in, but in the long run, these developments will begin to settle in and the bigger picture of Business Process Management will evolve and the science of BPM will offer bigger benefits to the enterprise in the end.

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