BPM Market Navigates Q1 2004 With Sails High

May 18, 2004

The winds of change continue to blow through the corporate business and IT worlds, and according to the latest Upside Research, Inc. vendor survey, business process management (BPM) is sailing into the picture for more companies than ever before.

The first quarter of 2004 has been an important test for many BPM vendors, as they have continued to broaden their base and expand their enterprise-class deployments and capabilities, becoming more established players. Many of the vendors have been fortunate, and their financial results indicate a positive year for BPM. Upside Research recently conducted an informal survey of a number of BPM vendors, and the results support our earlier claim that 2004 is emerging as the year for BPM.

Overall sales have grown dramatically. Of the half dozen vendors that responded to this question, all reported growth rates above the 2003 industry average of 15-20%. Respondents indicated that quarter over quarter revenues grew by an average of 44%. And, several vendors saw large multi million dollar sales, indicating more enterprise-scale adoption of BPM.

Key verticals are responding to BPM. BPM vendors are seeing traction in a number of key verticals, indicating that these verticals view BPM as an answer to business challenges such as corporate governance, streamlining processes, and industry regulations. The majority of vendors identified financial services and healthcare as two key verticals. Other verticals seeing more traction from BPM are government and manufacturing.

Geographic breakdown of sales. While all vendors in the survey reported that the majority of their sales are coming from North America, many indicated that several markets are seeing growth, most notably Asia/Pacific Rim/Australia. Several vendors reported big customer wins in Japan and Australia, indicating that this area should continue to see growth over the next year.

Major factors for sales growth. There were a number of similar factors identified by vendors as contributors to their recent sales growth. Among them were:
– Compliance and regulatory pressures
– Cost savings and fast implementation schedules
– Measurable ROI from early BPM adopters
– Global business expansion

These factors have had a positive influence on BPM vendors’ ability to take the message up the corporate ladder and make a convincing sell to C-level executives.

The Upside Uptake
These results are promising for BPM. The solid growth numbers indicate that vendors are gaining traction in important accounts, and the word is spreading that BPM is a viable solution for process automation, cost savings, and regulation and compliance challenges. Upside Research believes that future quarters will continue this trajectory of growth being experienced, and estimates that the overall growth of the market will shift from 15-20% that was seen last year up to 25-30% for 2004. The growth in new markets is especially indicative of the potential for growth of BPM, as the solution becomes a global one, impacting companies around the world. And, with regulatory and compliance mandates continuing to plague corporate managers, BPM adoption will continue to grow as a proven, cost-effective solution.

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