For years, Appian's nearest competition was Lombardi, followed by Savvion. In just under a month, both have been acquired. While Savvion had long ago faded from competitive viability, its acquisition by Progress Software puts neat punctuation to the era of crowded and overlapping BPM pure-plays ñ ending it, as it were, with a bang.
Nearly everyone 'wins' here ñ even external parties.
- Progress wins. This transaction makes sense in a way the IBM-Lombardi deal did not. Progress' suite of products is complementary to BPM. Progress has a declining cash-cow business, and the new CEO (Rich Reidy) knows that diversification through acquisition is the right way to segue from a past strength to a future strength. Were I a Progress shareholder (I am not) I would applaud the transaction on strategic grounds and be delighted with the price.
- Savvion wins. For at least 24 months Savvion has been widely understood to be seeking a sale, and if that is the case, then they must be pleased to have found one. The downside is that they are joining a firm unlikely to innovate under a BPM banner. Progress wants to sell a stack, not BPM. They are also economizing, having just cut 250 jobs (out of 1,875) last month.
- BPM software vendors win. One fewer pure-play competitor.
- Technology consumers win. Progress will deliver the BPM concepts more widely, to a more uncommitted market, than Savvion would have reached. BPM will become more popular more quickly.
Left out of the festivities are Savvion customers ñ who surely do not win. Savvion will now lower the banner of innovation and dedicate itself to integrating with a stack few firms own. Their clients should transition to a BPM innovator with momentum and a long-term outlook. They will find a friendly welcome at Appian.
Though we can list several winners, there should be no doubt who is the greatest beneficiary: Appian. No entity gains more from the acquisition of Savvion, or from the disappearance of Lombardi into the gears of IBM. These competitors, formidable in their time, are now repurposed and will not recapture their innovative edge. Appian's position is now undisputed -- every blog I have read today lists Appian as the last pure-play champion.
On Column2, Sandy Kemsley writes: "Of the three mid-range BPMS-only vendors that I would most commonly name ñ Appian, Lombardi and Savvion ñ that's two out of the three announcing acquisition in less than a month." Bruce Silver recalls the line-up a few years back and lists "four vendors on the business-centric end of the BPMS landscape Ö Lombardi, Savvion, Fuego, and Appian".
Why is Appian the vendor remaining? I know why: It's because of that smelly old building we used to work in with the lease that said we had to leave within a month whenever they decided to knock the structure down. And because our founders have packed sleeping bags to a client's server room. And because the whole company worked 6-day weeks and we had no marketing department. We're still here because from the beginning, whatever the compromises, we challenged ourselves to build a sustainable business. We spent time and sweat rather than money (we still do). Lombardi and Savvion arrived at the same point, but Appian got there the hard way.
Quick fact: All three firms (Appian, Lombardi, Savvion) were universally considered leaders since at least 2006. Lombardi and Savvion both took $55-75 million to get there. Appian did it on $5,000 in seed capital. (Later, in 2008, Appian took a $10 million investment.)
The irony of these acquisitions is that they take BPM to exactly the place BPM was going, but faster. Here's what I mean: Appian had a special 2009. Wait for our later announcement(s), but I think I can say that no major vendor grew as quickly nor gathered such a crowd at their user conference. (We even outdrew most analyst shows.) By the end of 2009 ñ even before these acquisitions were announced -- it was clear to us that there was a new contest in BPM: Appian vs. Pega.
One final note: Lombardi and Savvion didn't leave this market because there wasn't value, they left because they ran out of time. (For a venture-controlled company, time is everything.) There's a great market here, and a sudden lack of competitors. Appian is not for sale. Our product is strong, our staff is extraordinary, and we have the most enthusiastic user community in the business. For a while we shared the spotlight; now we are ready to own it.
Matthew Calkins
Chairman & Chief Executive Officer
Matthew Calkins
