BEA's acquisition of BPM suite vendor Fuego marks BEA's formal move into the Business Process Management market - and a direct response to moves already made by rival TIBCO, as well as market positioning by webMethods.
The move to BPM by BEA was expected and the choice to acquire Fuego is certainly not a surprise. Fuego has a very strong reputation in the BPM pure-play market; there is little (if any) baggage associated with the company and the technology set aligns well with BEA's existing portfolio. Suffice it to say that BEA, TIBCO, and webMethods will now be leading a major push in the business process management market with an overlay of a broader value-proposition of unified applications for BPM (business process management), SOA (service oriented architecture), BR (business rules), BAM (business activity monitoring), CEP (complex event processing), and more.
This sets the stage for some very interesting market dynamics—and it signals a move by major EAI vendors to expand their customer footprint and their buying touch points.
The Evolving BPM Stage
Now that BEA is a confirmed player in the BPM market, pure-play vendors will experience a substantial increase in the challenges they face in growing their market share—or at least their revenue. BPM pure play vendors must carve out niche value-propositions or risk being overrun by the market force exerted by EAI vendors and infrastructure giants (Microsoft, IBM, Oracle, etc.) in the evolving BPM market.
For EAI vendors like BEA, there is a lot more at stake than just the BPM pie. BPM offers the opportunity for EAI vendors to play a more direct role in business issues as well as giving them a way around packaged application vendors lock on “everything business process”. Whether you talk EAI, SOA, ESB or whatever, these technologies are for technologists and clearly rest as underpinnings to the business activities of the organization. Prior to BPM, the EAI vendors of the world were clearly perceived as providing technology that sat under packaged applications such as ERP and CRM. With BPM everything changes.
Business Process Management—emphasize the ‘Business’
Business process management and business rules reach directly up into the core strategic business activities of the organization. Regardless of who performs actual software configuration, business people care about BPM and BR—a lot. It is a means to address cross-functional business processes, increase benefit of competitive advantages within the organization, and agilely respond to market conditions with flexibility previously unheard of in the packaged applications world. Though packaged applications will continue to play a key role in most organizations, BPM meets requirements at—and above—the level of packaged applications.
Seen in this light, BPM is the opportunity for EAI vendors to extend their footprint alongside and above packaged applications instead of just below them (this in the figurative top down view of organizations and technology). This creates the opportunity to sell into new requirements areas and to new decision-makers and decision-influencers. It is also a much higher profile positioning as the affects from BPM often escalate to the very top of the organizational chart.
Reshaping of Markets and Market Strategies
Of course, this does impose other affects. For instance, growth with BPM will place EAI vendors in competition with other software companies where such competition is currently at a minimal level. Relationships will strain and new combative relations will emerge.
Then there is the question of how well the EAI vendors can leverage the expanded market BPM offers them. There will be pressure to change, adapt and expand sales channels—and that is not an easy thing to do. However, this is where things get real interesting—because the opportunity BPM represents for EAI vendors is much bigger than just BPM.
Recognizing that change is afoot to create more agile and adaptive technology stacks, or simply recognizing that business needs change, translates to ongoing sales opportunities at the business level for those vendors that solve the pain (or at least the organization feels has helped them achieve their goals). So as new changes occur, guess where these businesses will look for answers to new needs and problems? That's right, the vendors already there that solved things last time. Hence, EAI vendors have the opportunity to position themselves, through BPM, to take advantage of new opportunities (and product expansion) in the future—in which case the EAI cap goes away and growth is no longer constrained. The opportunity is there, but only time will tell if any vendors can really take it to the bank.
Why EAI and Not Somebody Else?
It's interesting to see the dynamics behind the EAI/BPM opportunity. There is magic in the air, and that magic is Unified Process Architecture.
Emerging from these vendors are product combinations that reduce configuration management across application domains—the key benefit of Unified Process Architecture (reducing dependency) as outlined in my introduction of this concept (more on this later). BPM, SOA, BR, BAM, and CEP are already on the plate of EAI vendors in this regard. Exactly how far they can take this is yet to be seen but it could be the real story inside the story if they get it right. If not, well they still stand to do well with BPM opening numerous doors of opportunity from a market position faced with potential stagnation.