MWD on TIBCO and ActiveMatrix BPM

Post by
Scott Francis

Neil Ward-Dutton and MWD have published a brief piece about TIBCO and ActiveMatrix BPM. There's a more in-depth assessment available as well, coming down the pike.

A couple highlights from his write-up:

  • Revenue was up 25% year-on-year
  • License revenue up 32% year-on-year
  • Non-GAAP operating profit up 31% year-on-year.

TIBCO is now rapidly approaching $1 billion in annual revenue; and its acquisitions have helped it broaden its market footprint into healthcare, retail and other industries.

But specifically the BPM part of the business doesn't seem to be standing out (the growth doesn't look that different from the company as a whole):

Q2 BPM license revenue was 9% of the total $83m; that?s around $7.5m. TIBCO declares that this is up 33% year-on-year ? which is a good sign ? but I?m guessing that at the moment, the company hasn?t yet seen a return on its very significant redevelopment investment.

From what I understand ActiveMatrix BPM was a "start over" rewrite of their BPM offering... and from what we're seeing/hearing anecdotally, it is taking acts of heroic proportions to make big deals happen.

Incidentally, wholesale rewrites of a product are rarely the right thing to do.? They open up all the existing customers to re-examine their go-forward choices... and then they have a new, less mature product to go pitch against entrenched competition.? Let's suppose you build a better mousetrap that scales better (in theory).? Prospect A says "can you show me the three references where it scales to x million transactions per time unit?" and... well you can't, can you?? It is a new product after all.? And then if you get a customer to buy into it - maybe it scales, maybe it doesn't.? Scale is just one dimension- there's feature-fit, UI/UX, production support, etc.? So many unknowns to answer, that the old product had answers for (maybe bad answers, but answers nonetheless).? But, ironically, a company does have to have the courage to rewrite pieces of their software - or to acquire new pieces of software (as Tibco has done).? Sometimes the difference between a product rewrite and a "module" rewrite is one of perspective, but one rule of thumb is that the product is a SKU - something you sell.? A module isn't sold independently.

I think the move to ActiveMatrix BPM was more problematic than it appeared on the surface. Putting the $7.5M in perspective... if that is up 33% over prior year, they were as low as $5.625M the year before... This is about the scale of pure-play BPM vendors... but TIBCO + Staffware used to be much bigger than those vendors at the time of their merger...? Their momentum seems to have been in the wrong direction... (when I worked for one of those pure-play vendors, we always looked forward to competing against Tibco in a BPM deal cycle...)

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