Progress Software adds BPM to its portfolio

by Ashutosh Desai & Jamsheed Gandhi    Mar 26, 2010

Early this year, Progress Software announced at its Global Field Operations Conference that it had acquired Savvion Inc., for approximately US $49 million. The motive was quite apparent — Progress Software needed a Business Process Management (BPM) solution in order to provide a complete end-to-end business process package to its customers. Packaging Savvion’s BPM solutions together with Progress’ CEP (complex event processing) expertise should make it easier for customers to approach a single vendor for its business process requirements. In a conversation with CXOtoday, Christopher Larsen, SVP - Global Field Operations, Progress Software, explained that there was more than one reason to acquire Savvion and why they all made good business sense — for the company as well as for their customers.

What was the rationale behind the Savvion acquisition?
We saw some very interesting synergies with some of the products we were going to market with namely, Actional and Apama.  We were looking to add BPM-type capabilities to augment this current set of offerings. Since our customers also have BPM requirements, with this acquisition, we can now address the current customer base, while looking at increasing revenues and at the same time attract new customers to the fold.

This need is bolstered by the validation of the BPM market by analysts like Gartner and IDC, who have predicted a 20 percent CAGR over the next couple of years.

We have found Savvion’s product offering is more than just a BPM engine — it is a far richer suite. The solution includes business analytics, document management (DMS), and a business rules engine.

Geographically, this made sense as well, since Progress Software, which is traditionally strong in Europe, accounts for 45 percent of its revenue, while Savvion, on the other hand, has no presence in Europe. This as an opportunity to take Savvion’s solution to market in Europe, through the distribution channel and infrastructure we already have in place.

In India, post-acquisition, we will have over 300 people split between Mumbai and Hyderabad (where Progress has its development center). With almost 45 people in the field and over 200 people into development and shared services, it gives us the critical mass that is needed to really address the Indian market — which is the fastest growing in the field.

How does Savvion’s BPM solution complement Progress’ current portfolio?
Progress Software’s Actional provides end-to-end visibility of business transactions. One can look at a transaction from end-to-end (for example, from order to cash) and view it across a ‘heterogeneous landscape’ — which could consist of an ERP system, a different CMS system, or even an in-house one. The visibility across these lets the customer know whether the transaction completes end-to-end. Even though this is a real time view, a customer will get to know if a transaction has not completed only after it fails, somewhere in the process.

We were looking for the ability to potentially predict and sense and respond to a series of events (like transactions). Apama, using CEP did just that, in real time. The response to a series of events usually triggers an action, which is handled by a BPM solution. This is where Savvion fit into Progress’ need to add value to its customer base. We were seeing synergies on solving bigger problems for our clients when we were conceptualizing the two products together.

Savvion’s events-driven architecture of its technology was another factor that caught our attention. Savvion was the only BPM company that we spoke to that used the term ‘events’, which we agreed with. We felt this would allow us to go to market with the integrated offering much quicker — which could be as soon as 4-5 months from now.

Will the clients be specific to a particular domain, industry, or would it be across the board?

The solutions are best suited for businesses that deal with high volume, high scale, and transactions, typically in verticals such as financial services, communications, travel, transport and logistics. We found that it aligned well with Savvion’s belief in going vertical, them having made good progress in the financial services and telecommunications verticals. Together the solutions can provide good visibility, the ability to sense, respond and carry out a business process.

The value proposition for this seems fairly simple, it creates a bigger solution set with a greater value creation, which can create differentiation in the market and become the top three providers in the industry verticals mentioned above.