Tech players eyeing up BPM market

10 Aug 2007

Sales of business process management (BPM) software grew by 80pc worldwide in 2006, according to analyst firm IDC, and rapid growth is expected to continue over the next five years.

The value of the BPM software market was US$890m (€644.5m) in 2006 and is tipped to reach US$5.5bn (€3.98bn) in 2011, a 44pc five-year compound annual growth rate.

IDC defines BPM as a discipline within enterprises that helps to improve business performance by focusing on improving operations. It is also known as business intelligence (BI) and incorporates customer relationship management (CRM) and enterprise resource planning (ERP).

IBM, Oracle, BEA and Tibco are all experiencing strong growth within their BPM portfolios and Microsoft, through its Business Process Alliance (BPA), has signaled an interest in this market, according to IDC. BPA members, including Ascentn, K2, and Metastorm, are likely to benefit from this attention and investment.

“This year and next are critical for BPMS vendors,” said Maureen Fleming, program director for business process integration and deployment software, IDC. “The market has had failures and consolidation and this will continue over the forecast period. Most of the vendors have invested in their next-generation capabilities. For those who aren’t already, the focus should be on investing time, effort, energy, and cash building market share.”

BPM software penetration at present is miniscule and it commands only a tiny percentage of the total addressable market, said IDC, but growth will be rapid going forward as companies move to build on their initial deployments of BPM software, signalling a shift from using BPM technology on a project basis to viewing it as part of company infrastructure.

Platform vendors will also upgrade their BPM software and go to market with suites or BPM bundles. Consequently, purchasing among their huge installed bases will be strong over the forecast period, IDC predicted.

Over the next few years innovations from the dedicated BPM technology vendors such as Lombardi, Global 360, Ascentn, Appian, Savvion, Bluespring and Ultimus will continue to drive advances in the market, helping them to stave off the challenges of the larger corporates that are eyeing up the sector, IDC estimated.

The IDC study also found that software as a service (SaaS) is only beginning to emerge as a business model in this market. However, it predicted the SaaS model would help fuel growth in the mid-market, small business and business-to-business arenas during the latter half of the forecast period.

By Niall Byrne