MWD on PegaSystems and PegaWorld

  • June 20, 2011
  • Scott

Pega has has impressive financial performance over the last few years, as Neil Ward-Dutton documents:

The company is currently publishing full-year revenue guidance of around $430m for 2011 – up from $330m or so last year – which means it’s grown 30% in each of the last three years. As it digests its Chordiant acquisition and finds ways to combine the technologies it now has to hand for new customer scenarios, the company is clearly riding high and full of confidence[…]”

But Neil asks a few questions that I think are pretty interesting:

But – is it actually a BPM technology provider?

Well, it spent a lot of effort getting re-branded as a BPM provider a few years ago, when BPM was an up-and-coming tag for a category of software.  But Pega was never really a pure-play BPM software vendor. This is the first time I’ve seen an analyst of any kind question whether Pega is really in the BPM business.

So onto the other question, quickly: is Pegasystems a BPM technology provider? In his opening keynote, Alan Trefler claimed that the company’s recent growth makes it more than 10 times larger than its nearest pure-play BPM rival – but in truth this comparison is a little sneaky. Pegasystems isn’t really a BPM pure-play.

It is a BPM technology provider – but in the same way that SAP’s BPM investments make it a BPM provider.

It actually does matter – the difference between the mentality of a pure play and an SAP is larger than one might think.  The distance is so great, in fact, that IBM bought Lombardi to get that pure-play DNA into its veins.  But Neil doesn’t find that question nearly as interesting as whether Pega is selling to IT or selling to Business.  It is an interesting point:

They talk about Pega technology as a way to make the thorny tradeoff between the need for consistency in business execution, the need for competitive differentiation, and the need to specialise execution for particular markets and segments. They are fantastic advocates for the business benefits of working with Pegasystems. But these are not people who really naturally engage with the idea of ‘situational layer cakes’.

I’m sure Pega would argue that they just have to do both – sell to the business and IT.  That’s not a bad recipe.  But from reading Neil’s post, it sounds like Pega isn’t sure what its organizing principle is – what is the mission?  Improving business processes?  Improving customer service?  “Driving Customer Success” is admirable but bland –  it describes a whole host of companies in different industries…


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