webMethods gets MDM with Data Foundations acquisition

Software AG, the owner of the popular webMethods suite of SOA and BPM products, has acquired Data Foundations, the US-based Master Data Management (MDM) vendor. This is a great acquisition, because the single version of the truth provided by MDM technology is often an essential component of business process management applications.

The only issue is that there is an element of catch-up here, since major BPM/SOA vendors like IBM and Oracle have had MDM capabilities for some time. But putting that aside, the fit between Data Foundations, Inc. and Software AG looks very neat. There is no product overlap to worry about, and the Data Foundations solution excels in one of the key areas that is also a strength for Software AG – that of Governance. Software AG offers one of the best governance solutions in the industry, built around its CentraSite technology, and Data Foundations has also made governance a major focus, which should result in a strong and effective marriage between the two technology bases. From a user perspective, MDM brings major benefits to business process implementations controlled through BPM technology, because the data accuracy and uniqueness enables more efficient solutions, eliminating duplication of work and effort while avoiding the customer relations disaster of marketing to the same customer multiple times.

Good job Software AG.

Progress Software acquires Savvion

handshakeSo Progress Software has bought yet another software company; this time a BPM vendor, Savvion. But is this the right move for Progress?

Progress Software has spent most of its life growing through acquisition, making use of the piles of cash generated by its legacy mid-range database product to find new areas of growth. After all, the legacy business may be highly profitable, but its returms are dwindling by the year and Porgress desperately needs something else to shore up its balance sheet. Unfortunately its acquisitions have had a bit of a patchy record of success. Perhaps it will be different this time.

Savvion is a credible BPM (Business Process Management) software provider, and 2009 was a bumper year for BPM sales. Specialist companies like Pegasystems and Lombardi showed huge growth rates, bucking the downward trend triggered across many technology sectors by the economic upheaval. On top of this, Progress has been trying to establish itself as a viable SOA (Service Oriented Architecture) and business integration vendor ever since it launched the Sonic ESB in the early years of the last decade, and BPM was a glaring hole in its portfolio. For these reasons, it is easy to see why Savvion would seem a good fit.

There seem to be two problems for Progress, however. Firstly, BPM is now rarely a solution bought in its own right – hence the rapid consolidation of the BPM market with Pegasystems more or less the only major oure-play BPM left standing following IBM’s acquisition of Lombardi. Instead, BPM is deployed more and more as part of a business transformation strategy involving components such as SOA, application and data integration, business rules, business monitoring and business events management.  Secondly, the gorillas in the space are now IBM, Oracle and SAP. These companies all offer a full suite of products and more importantly services based around BPM and the rest of the modern infrastructure stack. Companies such as Software AG, TIBCO and Axway form a credible second tier, too.

In previous acquisitions, Progress has treated each acqusition as purely software products. This is not surprising, since selling databases is more about selling products than selling solutions. However, it is this factor that has been at the root of the patchy performance of Progress acquisitions. For instance, the Data Direct division of Progress, where it placed a number of acquisitions in the data space, has fared reasonably well. This is because it is more of a product business. However its attempts in areas such as ESBs and SOA governance have suffered due to a seeming reluctance to embrace a more industry-specific, services-based solution model.

With its acqusition of Savvion, Progress once again has the chance to try to show the market that it has learnt from its mistakes. BPM is absolutely an area where companies need to be offered solutions – products together with services and guidance to develop effective and affordable business solutions. It will be hard enough for Progress to cut a share of the BPM pie with all the big players involved, but it does have one outstanding advantage; it has a strong and accessible customer base in the mid-range market where the larger companies struggle. However, if it fails to take on board the need to hire industryvertical skills and solution-based field and service professionals then this acquisition could prove to be yet another lost opportunity.

Steve