Interesting report from MWD on Pega's recent 2013 results.? As Neil Ward-Dutton points out, it isn't all bad for Pega.? They just topped $500M in revenue for the year, and grew 10% YoY... and:
10% growth is good growth in these uncertain times, and certainly for a well-established software company with a lot of heritage; and many of Pegasystems? competitors have been off that level of BPM business growth over the past couple of years. However, revenue growth is stalling. From 2009-10 growth was 27%; from 2010-11 it was 24%; from 2011-12 it dropped to 11%. 10% marks a further small growth slowdown. Pegasystems is still growing, but it?s not growing as fast as many people might have expected.
Well, this could mean BPM is dead. But if so, it is 10% less-dead than it was last year, isn't it?? Neil asks a couple tough questions:
You might recall that Pega acquired CRM provider Chordiant in 2010. At the time Chordiant?s annual revenue was around $76m ? which was about 25% of Pega?s total revenue. This was a Big Deal.
But in the year to 2011, overall Pegasystems revenue grew a total of $80m. Which means that either Pegasystems? pre-Chordiant BPM business contributed virtually no growth in 2011; or the Chordiant business went backwards. Moving forward, in 2012 Pegasystems? overall revenue grew $45m; in 2013 it grew $47m. Clearly, the Chordiant acquisition has not delivered a big revenue boost.
My impression of this acquisition at the time was that it was defensive in nature - taking a competitive player in the "packaged BPM apps" space off the board.? So while it might have been additive, it was a player in exactly the same corner of the market, rather than buying a business that would grow independently, in its own right. ? But that's just my impressions from 10,000 feet.