Process for the Enterprise » Appian

Nobody Cares about BPM… Or do They?

Scott Francis — Tue, 07 Feb 2012 16:19:07 +0000

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.

Appian 2011 Results

Scott Francis — Fri, 27 Jan 2012 22:16:44 +0000

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.

No related posts.

The Wayback Machine on Appian’s Blog is Broken

Scott Francis — Thu, 10 Nov 2011 16:48:29 +0000

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 acquires Nimbus, Business DNA

Scott Francis — Tue, 30 Aug 2011 23:48:39 +0000

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!

How are the BPM Vendors Doing Now?

Scott Francis — Fri, 29 Jul 2011 07:18:41 +0000

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!

BPM Spending and the Hockey Stick

Scott Francis — Tue, 26 Jul 2011 11:33:35 +0000

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!)

Competitors Taking Shots from the Sidelines

Scott Francis — Mon, 18 Jul 2011 22:43:48 +0000

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.

Application Sprawl?

Scott Francis — Fri, 27 May 2011 15:18:30 +0000

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.

No related posts.

There’s Another BPM Vendor Conference Going on

Scott Francis — Fri, 15 Apr 2011 20:55:59 +0000

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:

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).

WashTech post on Appian

Scott Francis — Mon, 04 Apr 2011 15:05:25 +0000

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.