Progress' Vision at Analyst Day

Post by
Scott Francis

Good coverage of Progress Software's analyst day by Sandy Kemsley.? In particular, the coverage of the John Bates CTO talk and the wrap-up were the most interesting reads.? There's obviously a good product-fit for Progress and Savvion and so their go-to-market is shaping up quickly around this RPM concept (Responsive Process Management).

On March 15th, Progress put out an official release on the Responsive Process Management suite.?? Its a great packaging of the strengths Progress brings to the table, generally available in late April.? We've noted before that it is pretty easy for other companies to copy market positioning and marketing, without following through with real product changes required to support that positioning.? I'm curious to see how quickly the new, bigger BPM vendors will now coalesce around a new set of product position statements.? Progress has put their flag in the ground.? What will the positioning of IBM, Tibco, Pega, Appian, and others be?

Just yesterday, Mark Palmer (of StreamBase, but formerly GM of Apama at Progress), gave a tough critique of Progress' new strategy.? Of course, being a former GM there, and currently running a competitor (StreamBase) - colors his view.? On the one hand, he has a lot of insight into the company's strengths and weaknesses, and the market itself.? On the other hand, he's somewhat pre-disposed against Progress, and that tone comes across pretty well in his post.? Not that he doesn't raise some legitimate concerns for Progress to address - but the clear assumption in his post is that Progress won't be able to address his concerns.? And while he points out "problems" one could also flip it around and see "opportunities."? Example:? He points out three customers who presented (Southwest, 3Italia, and State Street) each only use one Progress product.? So, that could be an example (as he uses it) of how Progress won't be able to sell their suite.? Or, looked at a bit differently, it looks like the Opportunity Progress has to sell 6-7 more products to happy customers of at least one product... and it makes their effort to unify their sales force look that much smarter.

As much as I might like the scrappy start-up mold of company, and the innovation that comes out of it, Progress (and IBM, Tibco, Oracle) are in a realm where they have to increase the yield on a captive (and channel) sales team.? Adding Savvion to the mix is beneficial to that efficiency argument, in the same way that adding Lombardi to IBM's mix was beneficial to their sales yield.? But it sounds like Progress had sales org changes to make which Mark criticizes, but which, I have to say, make a lot of sense for a company with 7 products to sell.? It may hurt Progress' ability to compete in certain niche segments of CEP with the likes of StreamBoat - but it also means they'll sell CEP to customers who will never even pick up the phone to call StreamBoat because they were really talking to Progress because they wanted BPM and ESB products, and CEP was a nice-to-have for them.

A more balanced take is Neil's writeup at MWD Advisors: making the Next Big Thing big enough.? I think the best part of Neil's blog post is summed up here:

I think I know what Progress is trying to do with RPM ? it?s trying to show how CEP, transaction monitoring, SOA infrastructure and BPM taken together can make the business value of each investment more compelling.

Think about it as adding probabilities: 0.2 + 0.2 + 0.2 + 0.2 = 0.8. (to use some random numbers).

The danger with the tack it?s currently taking is that it could end up multiplying those probabilities, not adding them. (0.2 x 0.2 x 0.2 x 0.2 = 0.0016).

Of course, we're not really talking about probabilities - we're talking about yield: revenue per sales rep.? And while each new product added does not typically create a case of 1+1 = 2, it can very well be the case that a sales rep with two complimentary products sells 150% or more than what they would sell with only one product.? If you hit the "suite" just right, and solution sell, a rep may actually be able to sell something that is more than the sum of the parts:? a solution to a hard problem, for a customer who values that solution quite highly (customers will generally pay more for a solution than they will for a collection of parts that can be tied together... and they'll pay more for a packed product solution than a bespoke solution - that's not a scientific analysis that's just based on observational experience and understanding risk).

Also, while Progress painted a future vision of RPM that might be too aggressive for many customers, the more modest vision of having "best of breed" technology in several core areas combined into a suite that matches up with your business processes really well, is actually a pretty compelling offering.? It seems like a reasonable way to leverage the years of trust Progress has developed with its individual product brands.

As Neil lays out:

Key to Progress succeeding in its endeavour will be its ability to lay out the RPM vision to industry in a non-threatening way ? showing how customers and prospects can get from where they are to ?RPM nirvana? and showing how value can be added at each step on the journey.

That's just it - there has to be a way to get from square 1 to "RPM Nirvana".

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