The Growing BPM Market: A Look from Boston

June 22, 2004

Last week brought summer (finally) and BPM seekers to Boston. Upside Research attended the DCI show, held at the Boston Marriott Rowe’s Wharf (in our own backyard), and saw some encouraging signs that the BPM market is headed for expansion.
Compared with last year, the show floor was crowded with vendors and interested buyers and much more energetic. From our perspective, the conference attendance seemed to be about 275 paid, with a fair split of consultants and end user organizations checking out BPM trends. This is still a fraction of some of the larger technology conferences, but the fact that it grew significantly over last year is a positive sign.
The vendor exhibits included a variety of modeling oriented vendors, such as Orbus Software and ProActivity, Inc. as well as some of the more familiar names in BPM: Fuego, Lombardi, Metastorm, Pegasystems, FileNet and Ultimus. A few of the pure-play BPM vendors were absent (Savvion, Intalio, e.g.) and there were no traditional platform vendors in attendance (Microsoft, IBM, etc.), indicating that this market is still young.
The conference sessions were interactive, and the questions asked by the attendees revealed that many were still in the early stages of BPM education. A considerable amount of time was spent discussing some of the more esoteric aspects of process change and automation. Upside Research believes this reflects the nascent stage of the market, and exposes the market confusion that still exists about what BPM really is and how to use it.
Upside Uptake
Based on a number of meetings Upside Research conducted throughout the conference, as well as discussions with end users and vendors, the following key observations were made:
– Multiple vendors reported a significant uptick in Q2 sales, as compared to last year and Q1 2004.
– Technology budgets are beginning to open up for purchases such as BPM.
– While the titles and responsibilities of a significant number of show attendees were high quality and high level, many of the questions at the sessions and on the show flow were more rudimentary. Based on this, Upside Research believes that the BPM market is capturing the attention of the right audience, but that many companies are still trying to understand the proper context for BPM deployments.
– There is still a struggle between IT and Business Managers as to who should own BPM.
– Many end users are still confused about how to embark upon a BPM project, where to start, and how much modeling to do.
– Risk aversion is propelling buyers to look for flexibility and modularity in products.
– Vendors are pumping their solutions with more standards support and enterprise-software capabilities to meet the G2000 demands.
– Vendors are seeing more broad-based interest, and RFPs are increasing.
The general buzz at the conference aligns with Upside Research’s assertion that BPM is taking off in 2004. New customer wins are being reported, and existing customers of many vendors continue to add processes to their solutions.
Several of the pure-play vendors are moving beyond their infancy with changes at the highest levels and additional capital infusion to mark their forward path. A number of vendors have new releases coming out in Q3/Q4 of this year that will add new capabilities and attract new BPM prospects.
The key challenges for the market at this point are buyer education, continued sales momentum, competition from established enterprise software players, and validation of the business results of successful BPM implementations. The cacophony of messages from vendors are confusing buyers about how to evaluate BPM, and the market lacks a universal theme for helping buyers get their hands around what BPM is and how it differs from what they already have in house. In addition, sales will need to increase at a steady clip through the rest of the year to ensure that the entire market continues its rise. Many vendors are facing stiff competition from established enterprise players that are already in many organizations. There will need to be succinct messaging by the BPM vendors to convince buyers that traditional integration, packaged application, or portal software can’t do what BPM can. Finally, the market needs continued validation through best practices and ROI studies to reassure potential buyers that BPM is real and it does, in fact, work.

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