Mergers Continue in BPM Space with Metastorm Acquisition of Proforma Corporation

On Wednesday, August 1st, another merger was announced in the Business Process Management (BPM) market. Metastorm, a pure-play BPM vendor and one of the early leaders in the BPM market, acquired Proforma Corporation, a vendor of enterprise modeling and business process analysis solutions. The combined company will provide a unified solution that enables organizations to analyze, plan, and execute their enterprise architectures and models. After the acquisition, Metastorm will have roughly 300 employees, more than 2600 customers, and have projected revenue of $70 million for 2007.
Metastorm envisions that the new company will offer three different product lines to its customers, which can be purchased separately or together. Metastorm ProVisionEA will be the re-branded Proforma solution for enterprise architecture, enabling organizations to model their enterprise assets and relationships. Metastorm ProVisionBPA will be the re-branded Business Process Analysis suite from Proforma, offering process modeling, simulation, Six Sigma, and other optimization methods. And, Metastorm BPM is the existing Metastorm Business Process Management suite for lifecycle process management of both human-centric and integration-centric processes.
Metastorm’s goal is to provide the entire interoperable product portfolio by the end of 2007 using Common Interchange Format (CIF) to interoperate. By early 2008, Metastorm plans to have a common meta model and metadata platform for all products.
One of the main catalysts behind this acquisition is Metastorm’s belief that it can deliver more value to its customers if they start to think on a larger scale, moving beyond business process automation to creating an enterprise-wide strategy for business optimization, using BPM as the execution engine for an enterprise architecture. While customers benefit from automating individual processes, and there are many such processes within an organization to automate, Metastorm believes that the real value will come with an enterprise plan for business optimization, of which process automation is one component.
The Upside Uptake
This acquisition accentuates an undercurrent in the BPM market that Upside Research has been watching develop over the past year. As the BPM market continues to mature, there are a number of factors that make it ripe for consolidation. Not only are the initial pure-play vendors looking for ways to further define their value propositions, but large enterprise vendors from other related markets are looking to gain from BPM’s allure. Metastorm’s acquisition is a good example of the types of changes we will see as the BPM market continues to mature.
Since having a process execution platform is a pre-requisite for competing in this market, vendors are stretching themselves in various directions to make that platform more complete and able to meet the needs of the enterprise customer. BPM vendors have added modeling, simulation, testing, and optimization functionality, along with rules engines, portals, and a variety of back-end integration connectors. Some have done this organically, while others are looking for a faster means to an end, making acquisitions and mergers the perfect choice.
With the Proforma acquisition, Metastorm is differentiating itself from some of the other original, pure-play BPM vendors. While other BPM vendors have developed partnerships with enterprise architecture and modeling solutions, Metastorm’s acquisition of Proforma is a solid statement of their vision of the breadth of solution required for real, strategic business process management. The acquisition helps move Metastorm closer to competing against some of the infrastructure-oriented enterprise software vendors (i.e. IBM, Oracle, and EMC) that have made BPM their focus over the past year or two.
Upside Research believes Metastorm is taking a step in the right direction in seeking to expand its platform. The company successfully acquired CommerceQuest, a back-end transaction-oriented process management solution, two years ago, enabling its BPM platform to provide “round-trip BPM,??? an important differentiator in the growing BPM market. Previously, Metastorm had been known for its “human-centric??? BPM solutions, and adding CommerceQuest gave it some back-end legs and the ability to move further into the IT infrastructure.
Choosing an enterprise architecture vendor this time around brings a different focus. It will provide Metastorm with the ability to move its sales pitch further up the corporate ladder, and also more firmly toward IT, rather than the line-of-business managers that Metastorm has had success with in the past. However, this merger also brings a challenge for Metastorm to re-align its sales force to make that enterprise sale. The combination of enterprise architecture, business process analysis, and BPM is not necessarily an intuitive one, and therefore Metastorm faces a certain level of education in the market to convince its installed base and prospects that the three go hand in hand. Upside Research believes that all three technologies have merit and can optimally provide enterprises with a stronger value proposition than each separately. The key will be clearly defining how modeling enterprise assets can be more effectively and more quickly executed using a BPM platform.


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