Metastorm Seeks to Grow European Presence with Acquisition

November 16, 2007

Metastorm Corp. announced its second acquisition of the year on Wednesday, revealing its intention to purchase a European services organization. The acquisition of Process Competence, a European consulting firm specializing in helping organizations design and optimize customer-oriented business processes, follows Metastorm’s acquisition this past summer of Proforma Corporation, a vendor of enterprise modeling and business process analysis solutions. No financial details were released for this latest acquisition, but Metastorm stated it would be completed November 19th. Process Competence was already a certified Metastorm partner and a licensed distributor for the Metastorm ProVision modeling suite, one of the products that Metastorm acquired through Provision.

In a message sent to the media and analyst community, Metastorm identified a number of reasons behind its acquisition of Process Competence, including the fact that it provides an extension of Metastorm’s presence in Europe, adds best practice expertise in process modeling and optimization, and brings many leading European companies into the Metastorm customer portfolio. The company will retain all Process Competence employees as well as two of the three European offices.

The Upside Uptake
This acquisition adds several important aspects to Metastorm’s position. It provides instant expert knowledge of the Proforma products that Metastorm has been folding into its BPM ecosphere, enabling Metastorm to more easily transition into a company that espouses enterprise architectures and process models alongside business process management. The acquisition also provides Metastorm a stronger entry into some of the leading European companies that are already using process modeling tools and may be interested in expanding into a business process management platform. And, the acquisition of Process Competence also immediately builds Metastorm’s footprint in Europe, a market that the company has identified as a strategic geography.

As we mentioned in a previous Upside Update, the Proforma acquisition enables Metastorm to differentiate 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.

In our previous article, we also mentioned how Metastorm was facing a challenge with its purchase of Proforma, because it challenges Metastorm to re-align its sales force to make the enterprise sale that is required for enterprise architecture. 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. The acquisition of Process Competence makes this task easier in the European market, because the seasoned sales and services staff at Process Competence can easily hold the conversations at the highest levels within the enterprises they service. This enables Metastorm to more quickly gain a foothold into these European enterprises and bring the entire EA – BPA – BPM combination to fruition.

We believe that this acquisition by Metastorm is yet another indication of the need for BPM vendors to be thinking of the broader picture when crafting their BPM product strategies. At the same time, it’s also an indication to organizations that their BPM strategies should extend beyond simply automating, managing and optimizing individual processes. When done right, BPM can provide strategic value to organizations across the entire enterprise.

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