Ian Gotts says nobody seems to care about BPM – on the basis of attending a conference (unnamed) in the USA, that was sparsely attended.  He has a great picture of the room, nearly empty, that presumably he was speaking in.  Of course, that picture could be taken before everyone comes in to sit down – it might not be intended to be taken for a literal head-count.  But the point is clear:

I was keynote speaker at an event billed as ‘one of the USA’s most important BPM events’ – 500 attendees.  Gartner gets fewer 1,000 at their US BPM Summit.

In contrast Dreamforce (image right), which is Salesforce’s PAID annual user event gets 25,000 delegates.

As I pointed out in a comment on his blog, this is a bit of apples and oranges.  I don’t believe any of Gartner’s conferences have 25,000 delegates.  They’re analyst-driven conferences that tend to appeal more to executives than rank and file users.  Gartner’s CRM conferences aren’t attended by 25,000 people either…

On the other hand, IBM Impact was attended by north of 8000 people last year. Appian’s user conference had record attendance, as well.  IBM’s other conferences have similarly large numbers of attendees (I believe the IOD conference is even bigger than Impact, for example).

Ian asks:

So what is it?  Perhaps BPM has been around too long and everyone knows about it, so they don’t need to attend conferences and measuring conference attendance is misleading. But the world has moved on with technology enabling fantastic advances in operational excellence, so surely there is a need for continued education. And similarly, CRM has been around 20 years or more yet Salesforce conference attendance is still climbing.

What is it?  It is vendor-focus rather than analyst focus.  As I commented in his blog, these are just different audiences.  The vendor conferences are more users as well as decision-makers.  Users don’t generally go to analyst conferences, however.  And if you’re going to your vendor’s conference- do you really need to go to one or two more analyst conferences?  Probably not.

It isn’t that BPM is too broad, any more than CRM is too broad – it is just that vendor conferences are a bit more interesting than vendor-agnostic analyst conferences.  And hey, the vendors usually bring in better bands and entertainment!

My experience is that BPM enthusiasm at conferences is running high – at software vendor conferences, that is – and so I find myself in disagreement with Ian on this one.

There aren’t quite as many independent BPM software vendors to report on these days, but I still try to keep track of their financial performance because it still seems that the overall trend is up and to the right – apparently the market still hasn’t gotten too crowded for more than one vendor to be successful. And of course I’m always looking for confirmation (or exceptions) to that trend.

Appian reported “record growth in 2011″ the other day with some key statistics:

• 90 new-name customers
• 219% YoY license order increase for Appian BPM Software
• Appian Cloud represented 37% of their total license orders in 2011
• Highlighted new customers include several government agencies.

The press release goes on to describe Appian’s mobile BPM offering and several industry awards they won over the course of 2011.  Appian’s press release and blog certainly support the thesis that BPM still has room to grow.

But what I find interesting is the wordsmithing of what seem like otherwise healthy numbers:

• “90 new-name customers”  – how is a customer defined, then? As a department, subsidiary, purchasing group, or corporate entity?  (the use of new-name rather than just “new customers” makes one wonder what the caveat is).
• 219% year-over-year license growth sounds fantastic. But then they added another word – they didn’t actually say license dollars, they said “license order increase”.  An increase in orders could happen if you lowered the price to free, which isn’t nearly as interesting as a 219% year-over-year revenue increase in license dollars.
• I’m surprised the 37% cloud customers is as low as it is.

My beef isn’t that the numbers are good – they’re great numbers, but part of the value of a number is the context.  If Appian grew license revenue 219% why didn’t they just say so?  So if they didn’t just say so, then why did they feel the need to trump up the numbers by obscuring which metric they’re really reporting? It just isn’t necessary.

This isn’t a problem unique to small private companies though.  Just the other day Google reported some misleading vanity metrics about Google+.  The effect of using these misleading figures though was to undermine their credibility rather than enhance it.

This odd cherry picking of metrics isn’t new however, 6 months ago Appian reported “Sales orders for the Appian BPM Suite grew 158%” – again, orders, not revenue.

Of course, as a private firm, they don’t have to report anything, but if your business is growing it is hard to resist crowing about it at least a little! But I would encourage private companies reporting metrics to use plain words in what ever language you need to get through to your audience.  Finessing the terminology only undermines credibility.

I got a kick out of reading Ben Farrell’s post on Appian’s blog today,  “What a Difference a BPM Software Acquisition Makes: A Look into the Wayback Machine“.  I think Ben thinks he’s really caught out Phil Gilbert, formerly President and CTO of Lombardi, now VP of BPM at IBM:

“Today one of our customers said they were told by IBM: “why spend your money with Lombardi, we’ll give you our BPMS for free.” I finally agree 100% with IBM on something: their BPMS is worth nothing. Getting a cheap BPMS is like buying a dancing elephant for a dollar: cool, but who can afford to feed it?”

That’s Phil Gilbert talking. Or rather, Phil Gilbert back when he was president and CTO of Lombardi. Today’s Phil Gilbert is head of BPM at IBM. Say it again, Phil: “Their BPMS is worth nothing.”

And then later on he takes on the new IBM-Lombardi combination, IBM BPM:

The fact is that nearly two years after its acquisition of Lombardi, IBM has still failed to outline a clear path for its BPM customers. Yes, it made a marketing-oriented announcement about a roll-up of its disparate BPM portfolio into IBM BPM 7.5, but that is a unified offering in marketing-speak only.

I wonder after reading this if the only wayback machine is Appian’s blog publishing.  Maybe this is something they wrote in 2009 when the acquisition was announced?  or in 2010 when many analysts were unhappy with IBM’s lack of communication about the plan for Lombardi and WPS integration?  Or in 2011 springtime when Clay Richardson dissented from all other analysts and customers present at Impact by referring to the integration as “a new coat of paint”? At any of these times, Ben could have piled on with his post in a (somewhat) timely fashion.  But no, two years later he’s finally hit “publish”.  Maybe he missed all the Lombardi and IBM news the last two years and is just trying to catch up?  Maybe he’s just burned about losing a deal to IBM?  (this post also reads like a “mad because we lost a deal” post) Or maybe he doesn’t like Phil.

Appian has some good things going for it, and they made a bet on mobile/cloud that was “early” in the BPM space, relative to competitors.  But this whole David vs. Goliath thing is a bit of an art.  Phil was pretty good at it, Ben still needs some work – more edge, less sour grapes.

Regardless, he clearly doesn’t understand what happened vis-a-vis IBM and Lombardi.  Lombardi was, at times, in heated competition with IBM.  Given that IBM bought Lombardi, one could infer that IBM learned a bit about BPM from Lombardi and Phil, and realized that there was another take on BPM in the market – Lombardi’s – that would be better received than IBM’s current portfolio, and would create more value with IBM’s resources behind it for both IBM and Lombardi shareholders and customers.

If you look at IBM’s BPM vision (also commented on here, and here, and here) – which Ben derides without knowing it – IBM has adopted Lombardi’s vision of BPM and added some pieces to the puzzle that create additional value (ILOG, Integration Designer, the message bus, Business Monitor, etc).  And the key thing that IBM and Phil had to do when bringing Lombardi and WPS and ILOG together was not a technical problem, it was a business problem.  They had to define the go-to-market strategy – edit the value propositions to a manageable number that IBM’s huge sales force can really leverage.  Of course lots of development effort went into creating IBM BPM – but to get the integration “right” without understanding how to take the products to market would be an utter failure to the market, customers, and shareholders.  Now, it could have gone the other way.  Lombardi might have been swallowed up by IBM, discontinued, and chalked up as a “technology buy”.  But it wasn’t.  It became the centerpiece of a new strategy and BPM go-to-market for IBM.  Phil did get the change he wanted – from the inside.  And that change is ongoing, with a few more surprises yet to come.

Customers aren’t “forced to figure out their own path” – the upgrade path is clearly defined and actually well-supported by IBM.   Unsurprisingly, Ben’s role doesn’t include knowing the real story behind IBM’s products and strategy.  That’s not corporate communications’ job.  But you’d think he’d be a little more timely with his shots across the bow, if not more accurate in his firing solution.  I tell you one thing, I know what corporate communications folks are really good at: cherry picking.

TIBCO has announced its acquisition of Nimbus today:

Nimbus provides a strong complement to TIBCO’s event-enabled infrastructure software platform. Whereas TIBCO has traditionally focused on the automation of data, systems, and processes, Nimbus allows business users to collaboratively describe and document all aspects of a business – from operational best practices to organizational and system models. These are combined with robust governance capabilities that can deliver a process-focused “Intelligent Operations Manual” across the enterprise, linked to supporting data and systems. Nimbus focuses on the vast majority of processes that are often not captured in enterprise applications and automated workflows, and it has found particular traction with business transformation, compliance-led, and continuous improvement initiatives.

On the face of it it seems like a very complementary acquisition – I don’t see a lot of overlap between the market needs Nimbus addresses versus the market needs TIBCO addresses.  This might be seen as a move by TIBCO to inject some more business-friendly DNA into its veins, as right now TIBCO is seen as more of a speeds-n-feeds vendor than a business process management vendor.

Neil Ward-Dutton was first to the presses with his analysis of the buy:

Nimbus is happy to point out that historically it’s had a hard time selling to IT, and this has slowed down sales cycles; part of the challenge for it has been that Control doesn’t fit neatly into any mainstream product category (including BPA). TIBCO can help with the IT selling angle; but it’s important to recognise, too, that Nimbus can potentially give TIBCO a massive leg-up in terms of developing a more business-engaged field sales capability.

It sounds like a good synergistic match.  Neil characterizes Nimbus as a company with “annual revenues of around £10m and around 100 employees” – which implies the purchase price was easily digestible for a company the size of TIBCO.  Still, as we’ve seen with the IBM acquisition of Lombardi, sometimes a small (relatively) acquisition can have an outsized impact on the buyer.

Clay Richardson of Forrester also weighs in on the purchase:

So, why did TIBCO acquire Nimbus?  In many ways this deal is a nod to the “Empowered BT” trend, where more technical capability is being moved into the business.  For vendors like TIBCO, this means building – or buying – functionality that puts business stakeholders in the driver’s seat.  Over the past six months, one of the top inquiry topics I’ve seen from clients is around “models for increasing business engagement within BPM suites”.  In short,  I’ve fielded numerous calls from business stakeholders scratching their heads saying “I wrote the check for this BPM suite, but the IT guys are the only ones that can touch it.”

Empowered BT trend is a great way to sum up with the Nimbus folks (Ian Gotts in particular) have been preaching in their blogs and sales pitches.  Clay wraps up with this note:

TIBCO’s acquisition of Nimbus will be welcomed news to existing TIBCO customers looking to improve business engagement and – if executed effectively – should allow the developer-centric vendor to compete more effectively against more business-oriented players such as Appian and Lombardi  (i.e., IBM BPM 7.5).

I got a chuckle out of the last line.  But Clay is right – TIBCO needed something to help them compete with more business-oriented products on the market – what isn’t clear is whether Nimbus also needed to partner up with someone to keep going (as one person on twitter put it – is the lack of execution for one just as bad as the lack of business-focus for the other?).  I’m looking forward to seeing how well Nimbus is integrated, what role Ian Gotts is taking on, and how the analysts view on this acquisition evolves over the coming weeks.  So far no one is arguing that this is a bad fit… but we’re only a few hours in!

We have some contrary data points.  Pega’s last quarter was good.  So was IBM’s.  But they’re both big companies with too much complexity for outsiders to easily carve out BPM revenue.  However, what I hear on back channels from more than one vendor is that the big vendors are taking dollar share from the smaller vendors, and that the market is also growing nicely. I’ll be interested to see what Gartner and Forrester have to say in their reports on the subject when those are updated.

Jacob Ukelson reports that ActionBase is retrenching in the Israeli market and focusing on professional services operations.  With today’s ASPs for small enterprise software companies, this isn’t surprising – likely much (all?) of the real profit comes from the professional services operation.  Cost of sales for enterprise software is high – but yet there is downward pressure on Average Selling Price (ASP).

Appian reports good results from the first half of 2011 as well:

• “The company signed 34 new-name customers across government, financial services, healthcare, energy and other industries” – Unfortunately, it isn’t clear to me what “new-name” customers means.  Perhaps special terminology withing Government purchasing circles.
• “Sales orders for the Appian BPM Suite grew 158 percent over 1H 2010.” – Unfortunately, it isn’t clear if this is the # of orders, or the US Dollar value of orders… Obviously one interpretation is much better than the other interpretation.
• “… with Appian Cloud orders growing 181 percent over 1H 2010.” – Again, number of orders or Value in US Dollars?

They also call-out some of their accomplishments in cloud and mobile BPM – well deserved pats on the back.  But I do wish I could get to the bottom of the numbers they’re reporting.

Dave Brakoniecki is also a little frustrated with Appian’s specificity: 

The problem is:  Those three numbers are all the information in the release.

No information on absolute customer growth or way to extrapolate into any actual financial performance. I’d love to know how many developers they currently employ and how many salespeople.  What is the trend on all these metrics?

As one of the last pure play vendors standing, a full set of Appian results might have provided interesting insight into the trajectory of the sector.  Tibco, IBM and Pega all have all sorts of other product lines to complicate the picture. Appian might have provided a pure proxy for the BPM market generally.

Still, 34 new customers is more than 1 per week in 2011 so I guess we should expect some good case studies in the coming months.

Unfortunately, this private company specificity isn’t anything new… even with the Appian results in 2009.  In fact, if you look back at those results, there was talk about international expansion (which, as I noted back then, is more challenging than it looks).  Subsequent reports I haven’t noted any discussion of international, and the numbers aren’t apples to apples. The only thing that is truly clear from the release is that Appian is acquiring customers at a rapid rate.  We can’t tell if it is a good business, but it is a good growth rate of named customers.

Speaking as another private company, I’m not sure we want to release revenue numbers publicly either.  But then, I’m not sure anyone is trying to extrapolate from our numbers to determine if the BPM market is healthy or not.   Directionally, things are good for services firms across several vendors.

I’d love to hear from people about what they think the real #’s are for BPM software for all of the BPM vendors out there – IBM, Pega, Oracle, Tibco, Progress, Appian, and the other independents / pure plays.  Drop me a line if you think you have a read on any of these.  Or comment anonymously!

There were several reports about BPM spending going into next year, mostly based on the Gartner report to that effect.  Much of the commentary around this report seemed to be to treat it with cynicism:

“I think this is the 10th anniversary of Gartner predicting hockey-stick growth in BPM. Sure to happen some day…” – Sandy Kemsley

Of course, part of the problem is that, if a market has CAGR (compounded annual growth rate) of 15% or more, EVERY year is going to look like the bend in the hockey stick when you plot it out on a linear graph.  And it appears that that is what we’re seeing in the BPM market today.

There are other interesting signs of a change afoot.  Lately, when I tell people what I do for a living in social settings, sometimes people actually know what BPM is.  Or they do when I start to explain it.  More surprising: sometimes they’re actually interested in it.  A few years ago I’d get looks like I was doing something incomprehensible or foreign.  So when gartner says “Spending on business process management (BPM) projects will increase significantly in 2011” I believe them.  Gartner considers 5% increase significant (54% of respondents) and 10% even more significant (20% of respondents).  That actually doesn’t sound like predicting hockey stick growth to me, but maybe the compounded charts into the future make it look that way.

I can relate to this somewhat just looking at the historical growth rate at BP3. We’re already having our best year yet in 2011, and setting up for an even better 2012 with the hiring we’re doing.  To anyone in the BPM services or product market, it anecdotally feels like a hockey stick growth curve.

Appian’s take:

The hockey stick growth that BPM analysts continue to predict year after year is achievable. But it will not come from the minority of people already focused on process. Neither will it come from incremental updates to old BPM paradigms or from the resolution of debates over BPMN minutiae, for examples. Exponential BPM growth will come through the majority and its rapid adoption of Mobile, Social and Cloud technology.

Well, no one was really talking about “exponential” growth were they? I think they were talking about 15% compounded growth, at most.  And while mobile and social may provide an exponential growth (for a time) in usage, they’re not likely to provide exponential growth in revenue, which is what Gartner is attempting to estimate.  Most users’ expectations is that these social apps are free.

(Appian goes on to mention that they’re hiring.  So are we!)

Appian is again taking shots at others’ acquisitions from the sidelines in “Another Monster is Born”:

Bigamy is one analogy for what’s happening in the stack vendor land-grab for the BPM market. Another is “Frankenstein’s Monster.” And we all know how that played out…for the Monster and the townsfolk.

That’s only the beginning.  Appian is not impressed with OpenText’s acquisition of Global 360.  Frankly, I’m surprised they reacted at all (were they really competing that often with Global 360 or OpenText?)  But here’s a statement I strongly agree with:

BPM is not yet commoditized for the simple reason that BPM is not yet done evolving. Perhaps more than any other enterprise IT market right now, BPM is in a process (no pun intended) of innovation. BPM software is just now learning how to reach more people, drive more value and truly transform a business. Cloud BPM is driving a growing percentage of the market. Mobility has entered the game, as has social technology. This market is not yet complete.

In fact, there are other areas in which BPM is learning to reach more people and incorporate more mature technologies, as well as emerging tech.  But cloud and mobile are certain two big trends to watch (and, to Appian’s credit, two trends they bet on early… compared to other BPM vendors at least).  BPM is not yet commoditized.  But the demand is growing faster than the independents could satisfy it – faster than they could build their sales channels and development teams.  So it looks to me like a lot of interesting innovation will happen in pure plays or niche plays, but that bigger vendors are likely to acquire and incorporate those innovations (hopefully, not destroying them in the process). The question is, can BPM reach its true potential without the deep pockets of public market money or big company R&D?

But leave it to Appian to misunderstand what some of its competition are up to:

It seems to me that all the mega-vendors think BPM is simply a commodity. The mentality is that the more BPM technology you can acquire, the better; loosely stitching them together to create a creature that will succeed through sheer mass. OpenText is the latest example, but look at IBM, Oracle, Progress, etc.

I can’t speak to whether OpenText views BPM as “simply a commodity”.  However, I have some personal knowledge about Oracle, Progress, and IBM.  Oracle: guilty as charged.  They have a BPM strategy but it doesn’t feel like they are putting the gravitas behind it.  Ditto for SAP.  Progress has made BPM (aka RPM) the center of a coherent go-to-market strategy.  When a company reshapes their value proposition with BPM at the heart of it, I hardly call that treating it as a commodity or trying to succeed through sheer mass.  There are legitimate criticisms of the Progress approach, but they have brought together sound technical solutions across a range of product areas that pure plays don’t play in, and they’ve found a way to get behind a process vision for that.

Finally, looking at IBM – Appian is sadly mistaken if they think IBM looks at BPM as a simple commodity that it need not worry about.  Anyone attending IBM Impact in May can see how seriously IBM is taking BPM.  IBM’s customers and partners are taking it equally seriously.  In the very last session of the day on the third day of the conference, our own session at Impact was full to overflowing – as were nearly all the BPM sessions at Impact all week long.  IBM is hearing the message, and the investment in rationalizing their products into a much improved BPM offering is quite obvious to see for those of us in the trenches.

In an apparent bid to become tomorrow’s ERP system, Appian makes an appeal to “stop application sprawl“.

But they perked up when talk started shifting to how Appian could wrap or replace existing point solutions in addition to automating currently unstructured processes.  A few minutes later, full of excitement, they said the following before the whole group, “After we adopt Appian, we will need to be convinced why any point solution would be better than what we could create for our own needs in BPM.”

(their emphasis)

It is a little counter-intuitive for a BPM services guy like me to complain about pushing more BPM.  But I’d just say this: your BPM platform is not your application replacement platform.  It is your process -aka BPM- platform.  Your firm won’t be better off having all of its systems inside Appian (or another BPMS) if there isn’t any process improvement and rationalization happening along the way.

Rather than seeing someone say that they would adopt the BPM solution over any point solution that can’t prove it is better, the framing should be in terms of process:  before buying a point solution, we need to understand how it will fit within the overall fabric of our processes, and whether that “fitting” effort will outweigh the benefits of buying a point-solution application (presumably best-of-breed).

We’re not doing anyone favors if we just hand them the BPM hammer and let them think that all their issues are nails.

But if you do find yourself doing a “rip and replace” project, keep this in mind:

When building a BPM solution, we are often integrating with and replacing parts of legacy systems.  Often one of the first requirements from the business will be that the new system does everything the old system did in order to be accepted.  This is generally a bad false start to a project.

However, one of the best tactics is to figure out what the 2-3 key NEW capabilities your solution will bring to the business that are so compelling that some minor discomfort over less important details will not derail the project.  You can call this marketing, but it is truly understanding where the real value opportunities are in your project.  Sometimes these capabilities are things the users will clamor for, sometimes things that the management team will clamor for, and rarely, things that IT will clamor for.  Make sure that at least one of your major stakeholder groups is squarely behind a few of the wow features of your BPM project.  If you don’t have that excitement in one area, my experience is that you’ll find uncomfortable scrutiny on an exact comparison of the new solution versus the old solution.

Sandy Kemsley has good coverage of the other conference going on this week in the BPM space: AppianWorld.

Unlike Sandy, we weren’t about to try to do two conferences in one week!

Three of her blogs on the conference:

• Gartner Keynote
• Matt Calkins, future direction of Appian, and
• Malcolm Ross with a product update

I think where Appian is making their bet is obvious:  SaaS deployment in the cloud, and a new mobile-compatible interface, Tempo.  Tempo is certainly better than any of the other BPM interfaces I’ve seen on an iOS device.  Hopefully other BPM vendors will wake up to the need to really innovate on the mobile interfaces.  I worry that companies like IBM, in particular, worry too much about being cross-platform on all the mobile devices, rather than taking a more Evernote strategy of being device specific with the edge, and either in the cloud or highly compatible on the server. (The important part is the re-use on the server, not the re-use of UI bits on the client).

Washington Technology has a very complimentary article on Appian, a company that I kept close eye on while I was working at competitor, Lombardi, and since then we’ve kept track as we try to make sure we understand the breadth of the industry.

In it are a few interesting tidbits that I recall, but I was surprised to see come out in a tech journal – including Appian’s roots as a portal product, their opportunistic switch into BPM, and their roots in Microstrategy.

There was just one part of the article that left me scratching my head:

A private company with some investment from Novak Biddle, Appian has been providing BPM services for six years and now has generated more than $140 million in revenue, with about a 100 percent increase in revenue year-over-year, Calkins said.

“We’re very lean,” he said. “We rely on [innovative business] partners mostly. We have fewer than 200 employees directly on our payroll.”

These kind of quotes in a news article are irritating.  Is that $140 million over 6 years, or $140 million in one year, presumably the most recent of the six?  And “fewer than 200 employees” leaves a wide range indeed.  LinkedIn reports 172 employees, so at least this number is pretty accurate (the range between 172 and 200 isn’t too wide).  Is it too much to ask for journalists to report crisp numbers or statements?!

Appian’s free user conference is coming up, if you’re in the DC area or want to head out there for it.

This isn’t a review of Appian Tempo.  I’m a fan of what Appian is trying to do with Tempo and I hope there is more of this action in the BPM space.

Sandy Kemsley has a thorough review on her blog.  As usual, it covers the details, and the scenario of the demo quite well:

I had a chance for an advance briefing of Appian’s Tempo release last week; this is a new part of the Appian product suite that focuses on mobility, cloud and social aspects of BPM for social collaboration. This isn’t a standalone social collaboration platform, but includes deep links into the Appian BPM platform through events, alerts, tasks and more. They’ve included Twitter-like status updates and RSS feeds so that you can publish and consume the information in a variety of other forms, offering a fresh new alternative to the usual sort of process monitoring that we see in a BPMS. The free app for the iPhone and iPad requires an account on Appian Forum (the Appian user community site) or access to an Appian BPM installation (not sure if this is both an on-premise system and the cloud-based offering) in order to do anything so I wasn’t really able to check it out, but saw it on an emulator in the demo.

Sandy doesn’t pick winners and losers too often – reading between the lines she likes the indications of where Appian, and the BPM space in general, are going with mobile and social tech, but she’s seen enough demos not to get too excited.

Ann All has a further review (“I See the Enterprise Collaboration’s Future and its Name is BPM“), and is obviously impressed.  She attacks the shortcomings of products like Yammer, in that they can result in new information/communication silos rather than unifying an enterprise.  I can’t help but feel that that same fragmentation issue can be a problem for BPM-collaboration tech (How many BPM products does the average Fortune 500 company own?).  But Ann and Sandy both point out a key benefit of BPM + Social: tying interactions to real business events and outcomes.

Next up, Bruce Silver weighs in with his review, in which he not only praises Tempo but takes a few shots at the approach a few other vendors have taken (and it isn’t hard to guess which ones):

First, it’s really well executed.  Clean and smoothly integrated into the BPM environment.  Second, it seems a more reasonable implementation of the social/mobile idea than is typically offered by BPM vendors. [...] Tempo lets you create and track ad-hoc tasks, sure, but that (in my view) is not really BPM.  What’s important is it lets you also do real BPM, i.e. structured processes, within the same environment.  From your smartphone or iPad, you can perform tasks of  either type, often just by “swiping” the entry, quick and easy.   BPM vendors that insist on a separate “place” for users to do ad-hoc BPM are missing the boat.  Who wants that?

Let me take a shot at that.  The question isn’t, whether BPM users want a separate place for users to do ad-hoc BPM.  The question is, do regular users in the business want their ad-hoc stuff to be mixed in with other people’s BPM (which to them, may feel too heavy/complex so far)?  In other words, are we enhancing the existing audience’s experience with BPM (Appian’s Tempo) or are we trying to address a new audience (for example, the approach IBM has taken with Blueworks).  Both approaches have their merit, but I’ll admit Blueworks’ approach has less appeal to me as a consultant – that doesn’t mean that it won’t have *more* appeal to customers (for example, as a customer, we’re already using Blueworks internally and it took all of 5 minutes to get started). A couple other notes from his blog:

The hard part of BPM is the underlying architecture, the plumbing.  The “user experience”, not to diminish its importance, is technically easier to engineer.

Respectfully, I disagree. It *seems* like the underlying architecture is hard.  But, if it were truly hard, you wouldn’t see minimum half-a-dozen products that are pretty viable on the market.  I’ve worked in a product space where the architecture was actually hard.  We solved problems that no other vendor was even capable of solving.  Our engine would produce answers in seconds that took other vendors’ products hours, if they ever completed the computation.  That’s real differentiation in a hard space.  But in BPM engines, the differentiation is in the experience…

In fact, the underlying architecture and plumbing is becoming commoditized.  I don’t really care that much what engine is running my process… I care about the experience of developing and running my processes.  The experience is vastly more important than the plumbing.  And it is much harder to get right.  Not because it is technically difficult, but it is conceptually difficult to get right – and to say “no” to all the unnecessary stuff.  And once you get a bunch of code in place, it creates its own difficulty in changing to reflect the right experience. I’ll say it again, this is where the real differentiation is in BPM.  (And, to be fair, Bruce likes the Appian Tempo experience, which makes it differentiatingly good in his opinion).  Continuing on:

And once you face up to that, you don’t have to reconceive social/mobile BPM as something radically different, needing a totally separate product.  It becomes simply an alternative user interface that lets you extend real BPM to occasional users who wouldn’t otherwise participate, and enhance the value for regular BPM users by letting them perform process activities without being chained to the workflow inbox.  By making event streams and native smartphone UI a simple extension of the BPMS environment, not a whole “new new thing”, Tempo I think puts Appian in the driver’s seat in social/mobile BPM.

I like the idea of the alternate interface for BPM.  It was one of the first things that occurred to me looking at Blueworks (interfaces to existing BPMS installations for event feeds), but it is also so obvious that I’m sure it will happen in a future incremental release.  Actually, the technology to feed events into the stream from a BPMS (or Salesforce, twitter, or facebook) is quite easy across the products I’m aware of.  I like what Appian has done – but integration to their BPM suite isn’t going to be a selling point for customers who have already purchased, deployed, and invested in another BPM suite.  A separate, pluggable product might be preferred.  We’re watching the outcome of innovation being alive and well in BPM – surprisingly, at IBM, and less surprisingly, at smaller outfits like Appian and ActionBase, and in open source projects like Activiti.

It’s a very exciting time to be in the BPM business.  Congratulations to Appian for a great product release – I don’t mean any of my comments to denigrate their product offering – which I have not myself laid hands on – I hope their release is a success, and an indication or precursor of more interesting things to come from other vendors in our space as well.

So the new Forrester Wave is out.  What’s that? you hadn’t heard?  If not, you haven’t talked to anyone in the analyst or BPM vendor community in the last 24 hours!

As usual, there are a raft-load of vendors declaring victory:

Appian: “Appian Still Leading the Pack”

Pega:  “Pegasystems ranked #1 as one of two BPM vendors that ‘lead the pack with the best overall combination of modeling, design and development features for business and technical roles driving process improvement’ “  (bonus, their article includes the image of the Wave graphic itself)

Metastorm: “Metastorm Recognized as a Leader in Business Process Management Suites Report…”

IBM has several congratulatory tweets about being in the leader quadrant, but I haven’t seen a press release yet.

Judging by the wave, I should be able to add links to Progress and Software AG press releases or blog posts by this time tomorrow.

Every one of these vendors will crow that the analysts have confirmed that they’re as smart as they thought they were – that they’re leaders (or even, “number 1″).

So, I’ll let you in on a little secret.  The Wave won’t tell you which BPMS makes the most sense for you.  Some of these offerings are actually so different that they rarely, if ever, compete for the same customer projects, and often corporations own more than one product because they aren’t viewed as doing the same thing.  For example, Appian’s strength in SaaS means that will compete more often for SaaS deployments – the decision “to SaaS or not to SaaS” was probably made before any vendors were called.   Metastorm’s strength in EA may play well with customers who are doing a lot of modeling, but for projects that are more focused on implementation, or who already own other EA tools, that offering won’t be as compelling as something more targeted at executing processes.  Even Pega (apparently depicted as #1 on the Wave), isn’t as often in competition for general-purpose BPM platform purchases – they tend to be in the finals for more vertical processes, where their investment in specific templates or verticals or applications can really pay off.  A friend once described Pega as more a company that sells rules- and BPM- enabled applications, rather than BPM itself (it wasn’t a criticism, my friend thought it was good strategy for the company).

Of course the meat of these things is in the written words inside the report, but it is hard to get there when there is that tasty graphic that everyone can look at.  I wonder what would happen if Forrester withheld the scoring and the graphic for a couple of weeks, and just revealed the more in-depth analysis.  Another interesting data point would be the number of times (that Forrester can determine) any two vendors were finalists in the same evaluation – which would allow for a 2×2 grid/heatmap that shows you who is competing with whom.  I was happy to see Forrester give up on separating BPM into various different flavors of BPM – that approach never really worked for me, personally.

So everyone is happy now.  But in the morning, we’ll humbly get back to work and get some processes built and deployed, and improve some processes.  Which is, after all, the whole point of BPM.

Update: as expected, a few announcements today:

Software AG announces their leadership status here.

And Progress’ blog entry can be found here.

Ben Farrell of Appian notes on their blog recently:

Dealing with varying levels of security requirements in ramping up new federal employees and contractors is a common pain. It is usually handled through manual, paper-based processes involving lots of documentation to be passed around, verified and tracked across multiple systems. This means major time and effort for the staff performing the processing, and delays in getting new hires into a productive work mode.

Other process areas common across government organizations include things like Procurement and Sourcing, Program Planning, Budgeting and Management, Grants Management, and a variety of HR processes. Not coincidentally, these are areas where Appian is seeing great success.

BPM software helps the federal government solve pervasive cost and productivity problems – and not in the “tried-and-failed” approach of commercial off-the-shelf software packages that cause as many headaches as they solve thanks to rigid coding. While attacking an area of common concern, BPM solutions are easily configurable – by business users – to the unique requirements of an individual agency.

I’m not an expert on which BPM vendors have market share in the Government space (it is hard to measure this kind of “market share”), but being based in or near DC doesn’t hurt Appian’s chances.  And as probably every BPM practitioner has noted, BPM is what the government needs – processes that don’t get lost in the paper stack on someone’s desk, processes that proactively notify participants about progress within the process, and processes that have consistent performance.  Ask anyone who has gone through the green card application process and you will get a story of broken processes – or at the very least, broken visibility (the applicants rarely have any sense how far along they are in the process).

One interesting note from Ben’s post on cloud computing:

There will be more to come on government adoption of BPM in the Cloud. For now, I’ll close with a reminder about why BPM in the government really matters: every one of us, as taxpayers and consumers of government services, benefits when government operations are conducted more efficiently and effectively.

Government adoption of cloud computing is interesting.  I think most people assume that most government functions won’t be in the cloud – but clearly some could be.

I’d been looking forward to hearing what Appian would say about their “Technical Case for Case Management”.  Part 1 was just a teaser, and Part 2 promised to get into more details.

But when I read part 2, I could just hear Keith Swenson’s dismay (or actually, share it).  Appian describes it thusly:

The first and foremost feature in a Case Management solution is “Ad-Hoc”.

While I appreciate the effort to explain how Appian addresses case management,  that is a very underwhelming start.  The use of ad-hoc activities in BPM and BPMN is well-known (and well supported by at least some of the tools that aren’t BPEL-based).

But this is *not* what Keith (and others behind the ACM movement) are talking about when they talk about case management or ACM.  While the “ad-hoc” activity may happen at any time or place or sequence, what the ACM crowd are after is that not only is the “when and where” undetermined at design time, but also the “who, what, and how” is ad-hoc – determined *at* run-time.

Hopefully we’ll see someone step up with a better explanation of the technical attributes of their case management solutions.  I shouldn’t be too hard on Appian – at least they’re trying to explain the underpinnings, and this was only part 2 – perhaps in subsequent articles they’ll have more to say – but part 2 was not encouraging to me.

There’s been a lot of gnashing of teeth about the state of BPM vendors, and the BPM segment, ever since IBM announced its acquisition of Lombardi (and followed quickly by Progress’ acquisition of Savvion).  Even before then, there was much discussion over whether BPM really was a bright spot in the enterprise software space – could it really be growing when everyone else was struggling to tread water?

And since these acquisitions, the attention has often turned to case management (or, the nom du jour, “Adaptive” Case Management), and some have argued that “BPM” as imagined by advocates of BPMN is in trouble.   Of course, as with many things, one way to measure “success” is by whether the businesses advocating a particular approach are doing well – and doing well is typically defined as increasing revenue (and/or profit).  Ironically, if such a firm makes money, critics will say this only proves that the firms are good at making money, not that the software or approach to BPM is adding value for customers.  But we have to accept that in the long run, averaged over *many* decisions, the market assesses value by assigning dollars (or euros, etc.) to the products that are perceived to add value, and starving the products that don’t add value by not making purchasing decisions.

Dennis Byron says the big enterprise software firms are well-positioned to take advantage of the BPM “explosion.”  Meanwhile the independents don’t appear to be suffering.  The latest report from MWD summarizes results from Appian and Active Endpoints, two vendors who wholeheartedly support BPMN (Appian with a SaaS model, and Active Endpoints with a BPMN-up-front and BPEL-in-the-back approach).

Key data points:

Appian highlighted the growth of customer orders by 58% from Q4 2009 to Q1 2010 (and this isn’t a seasonal thing with Appian; in 2008 its Q4 was its largest quarter). Active Endpoints highlighted revenue from new customers: it tripled in Q1 2010 over the same quarter in 2009 – contributing to an overall doubling in revenue against the same period a year earlier.

Bigger firms like Pega are doing just fine as well, according to their quarterly reports.  So this is a good indicator of increasing demand for BPM software.  The increased demand for BPM skills, education, and even consulting is sure to follow.  It is an exciting time to be in the BPM market. Congratulations to these firms for having good Q1 results.

Well, after much celebration before announcing the details, we now have some (just some) facts about Appian’s 2009.

It sounds like it was a good year – as MWD reports, its license revenue was up 59% (but we don’t know from what base, much like Lombardi’s reported numbers before it was purchased), and customers doubled.  Of course, another way to phrase this is that ASP declined by 20% (if my math is right), or that revenue mix has shifted from prepay (enterprise license revenue) to either post-pay or subscription revenue.

MWD’s assessment is that international revenue will grow faster than domestic revenue.  And while this argument makes sense, having worked at more than one company Appian’s size in my career, I can attest that international revenue can be very erratic.  For a few reasons:

1. When starting from a small base, a single deal (or two deals) can dramatically affect the percentage growth internationally or in a region.  However, with so few data points, it may say next-to-nothing about going forward revenue.
2. Even off of a bigger base, international revenue has so much to do with your sales operation, and so little to do with your product.  There are other products out there.  There are big consulting shops out there. Whether you capture the money (revenue) that is being spent to solve the problems your software solves depends almost entirely on your sales and marketing operation.
3. American companies of this size rarely understand the international markets well enough, and make mistakes which cause big revenue swings up and down.  This is true because the executives usually lack field operational experience overseas, and though they may hire that experience, they may not be able to successfully evaluate those international experts and may end up throwing good money after bad.
4. I’ve seen a single sales rep bring in 30% or more of a small company’s revenue for a single year, only to bring in zero revenue the following year.  Individual sales rep performance is crucial to small enterprise software companies.

Appian may well overcome all of these pitfalls.  But revenue in both the US and Internationally is coming off of a small enough base that we should expect to see high beta for any of the smaller vendors.

The conclusions that Appian’s results really drive home:

• BPM is growing, not dying.  And growing faster than enterprise software generally. (Not just from this datapoint, but from Lombardi, IBM, Savvion, Pega reported results)
• The BPM pure plays were doing well in 2009.
• The remaining pure plays may still have legs and room to run while Lombardi and Savvion acquisitions are digested – even if those acquisitions are quite successful.

There’s been a lot of coverage of what it means for IBM to buy Lombardi.  Jaisundar proposed that this would upset the balance of power and cause more acquisitions… But perhaps the side effect he (and others) didn’t foresee was the positioning of the remaining BPM vendors (pureplay or otherwise) for the benefit of their suitors.

First we have Appian’s CEO posting here.  I don’t blame him for putting a stake in the ground that Appian is going to win, and positioning that the only two vendors left that matter are Appian and Pega.  Savvion might disagree, as would a few others, but nevermind.  He states that they’re the only ones strong enough to survive (by which, I would suppose he means financial strength, but he leaves that as an exercise for the reader’s imagination.  I don’t blame him for slagging IBM as killing innovation – in any acquisition like this, that is a very real possibility, and will determine whether this is a successful buy or not (at least, for folks who don’t work for IBM).  But methinks he doth protest too much, and may be trying to make sure that potential suitors remember that Appian still exists in case they want to get in the game by buying something.

Next, we have ActionBase, one of my favorite non-traditional BPM offerings.  In a previous post Jacob Ukelson made the argument that Sharepoint should be a better BPM tool than it is.  Now he argues that Sharepoint + Actionbase is that BPM dream team:  unstructured content + unstructured process… If that isn’t a pitch for Microsoft buying a nice Sharepoint add-on I don’t know what is.  Analysts are frothy thinking about how Microsoft or SAP might want to counter IBM’s move, and this is one option.

I’m not sure that unstructured process + unstructured data is the dream of every IT shop, but it is certainly a combination prevalent in many processes and organizations.  And of course those two offerings could work well together.

So it looks like everyone is putting on their finest Holiday Sweaters and looking to make a good impression for their potential sweethearts.  It’ll be interesting to see if there really is a wave of acquisitions or if this is it.

Its the creative destruction process of capitalism at work.  I just hope BPM doesn’t get lost in the woods in the process.

If you can’t make it to a BPM conference, Sandy gives you your best bet to keep tabs on it from afar.  According to her posts, nearly 300 attendees (customers, partners, analysts) attended, proving a point I made in a previous post, that there is a demand for conferences that are reasonably priced and a bit more tactically focused – and vendor-focused conferences are one way to achieve that focus. Look for more on that subject in this space soon…

A quick run-down of Sandy’s coverage:

• Don’t underestimate BPM, a keynote by Jim Sinur of Gartner
• Appian Corporate Update, in which Appian discloses a 150% revenue increase and 58% customer increase (I’m not sure if the latter is including or excluding their Appian Anywhere service, however).  This is significantly faster growth than Pega has reported, for example, and a good sign of the health of the BPM market.
• Appian 6 Product Update, with a focus on portal-building and being able to export all of the process as xml, so that it can be versioned in a source control system (this process sounds familiar to me from some other vendors).
• Customer Panel. Most interesting point Sandy reports is that the four customers cited all advised small projects to start – either because that’s what they did, or because they had bad experiences going with bigger projects first.

In a breakout session at Lombardi’s Driven 2006, I was paired with a gentleman from BearingPoint to discuss BPM vs. SOA in our session.  My central thesis at the time was that the value-proposition of SOA was primarily directed at IT – while the value proposition of BPM was focused on business drivers (including ROI) – and as a result, SOA projects were much more likely to be successful if driven by requirements from BPM projects.  After all, work tied to ROI is more likely to get funded and get finished than work that… isn’t.

Recently I commented on Keith Swenson’s post, and then saw this ebizQ article by Glenn Smith, of Appian: “SOA needs BPM”.  Glenn articulates a series of excellent points to support the premise that SOA really needs BPM:

BPM can succeed, albeit more expensively, without SOA, but without BPM SOA is only an internal technology initiative which does not directly address any business problem.

I couldn’t agree more – SOA is grease for the wheel, but it is not the wheel. And then Glenn describes SOA as it was initially defined: as an architecture, not a product.  Again, it is nice to hear someone else saying what we all know to be true despite millions in marketing spend by stack vendors:

SOA is an architectural style for developing distributed systems. It is not a specific technology, but can be applied to many technologies. It encourages loose coupling of components and enables flexibility. Individual services can be modified with no impact on the consumers of those services. Services support reuse, and can help preserve and extend the value stored in legacy systems by making their capabilities more widely available.

He then goes on to explain why BPM benefits from the use of SOA, and why the traditional tensions between this camp aren’t particularly problematic because the very nature of the loose coupling of a Service Oriented Architecture (SOA) allows for the teams to operate largely independently and interact through well-defined service interfaces.

Appian just announced the launch of Appian 6 (which will be released in a few weeks).  Among the benefits touted are a further refined design interface (aligned with the theme of process acceleration), which appears to offer better re-use of various components within Appian:

New BPM Application Design interface, allowing customers to quickly navigate all shared components and form these components into logical BPM Applications for simple management and quick migration between environments.  The re-usable library of components includes Processes, Rules, Groups and Roles, Reports, Content Management Structures, Documents, Portal Pages and Collaboration Areas.

From what’s described in the release, it isn’t clear how this feature set compares to other BPM offerings, but at least on paper, this functionality would bring Appian 6 up to par with best-of-breed BPM Software.  Of course, the devil is in the details, and would reveal whether their implementation of the new design environment is more or less productive than another environment (which is why we recommend customers actually try to build something and lay hands on the tools they are buying).

Next, it looks like Appian is extending the XML definition of the process to include all the artifacts defined by the design environment, rather than “just process and rules”.  This allows for versioning the XML in source control tools, and makes it easier to migrate the process definitions without losing assets.  However, I have to say that I would have expected Appian to support this well before version 6, and this is a feature that at least some other vendors have supported since circa 2003.  Still I’d rather have it than not, and hopefully it is a stepping stone to additional functionality for import/export in the future (BPMN2? XPDL 2.1? native support for a version control system?).

The new user interface approach sounds (to me) like an improvement over the old, as well as something possibly differentiating to quite a few other vendors’ offerings – including the ability for particular “process applications” to have good meaningful URLs.  This is a seemingly simple innovation but it can be *important* for adoption of BPM in an organization.

We’ll have to check out the beta and/or general availability release and see how some of these features manifest in the coming weeks, as time allows (or, perhaps someone else will do it for us and we can read their review instead!). I’m also curious what, if any, impact Appian 6 has on Appian Anywhere, their SaaS solution – is Appian Anywhere moving to Appian 6, or have they split the codebase?  Or is Appian 6 incorporating improvements introduced into Appian Anywhere?

There’s more information in a release from MWD, a pretty reliable source of information in the BPM market.  The main point of emphasis in MWD’s report is that the product release is focused on bringing together the methodology and the technology to deliver BPM applications more easily – which I think is one of the real strengths of a good BPMS.