The combination of the two companies could help Metastorms customers move closer to the goal of a closed-loop process system that enables companies to model processes, simulate what-if scenarios and then convert the models back into processes on the fly.
The acquisition also helps Metastorm compete better in a rapidly consolidating industry where stand-alone BPM vendors are disappearing and bigger platform vendors are rapidly adding BPM capabilities to their portfolios. With the Proforma acquisition, Metastorm may be one of the only companies outside of IBM to offer BPM and modeling software together, according to Bill Swanton, analyst for AMR Research.
Metastorm, considered by many analysts to be a leader in the BPM suites category, builds software that helps companies plan and model an enterprise architecture to support business process analysis and management initiatives. It also has an execution engine that shifts process models to IT systems. Proforma also develops software that helps businesses model their processes, but the companies products do not entirely overlap.
"There is a subtle difference between Metastorm and Proforma," Swanton said. "Proforma has more high-end business modeling tools meant to look at the business and understand how the business is put together—what the high-level processes are, whether or not they are computer-assisted. Metastorms tools are very much geared toward automating processes step by step, especially human processes."
The goal of the acquisition, according to Metastorm President and CEO Bob Farrell, in Baltimore, is to move beyond the traditional BPMS category to form a broader category of what companies can do with process tools—namely, better collaboration, agility and understanding through a closed-loop system.
"Organizations today are striving to improve performance through EA [enterprise architecture], BPA [business process automation] and BPM initiatives," Farrell said in a call with press and analysts. "The synergies, interdependencies and potential value of these three disciplines are immense, and now is the right time for Proforma and Metastorm to join forces to deliver an integrated software platform."
According to AMRs Swanton, Metastorms goal fits into an emerging, if nascent, trend in IT organizations: using modeling and execution tools to become more agile. "What companies are doing is [trying] to be formal about modeling their business and business processes," Swanton said.
"If you formally model using a tool like Proforma, you can then make changes in assumptions and model the results: What if we take this step out of the process, what is the effect down to dollars and cents? When you can directly affect [findings] to execute processes, you can have an impact on the bottom line."
Farrell said Metastorm plans to combine its software with Proformas in an integrated platform, one designed to enable the unification of a companys strategy with its architecture, process analysis and optimization, and process execution. The result, he said, will be more visibility into an organization.
Metastorms acquisition of Proforma comes at a time where more companies are focusing not only on the capabilities of BPM tools, but also on the potential of implementing a services-based architecture. Its also a time when the BPM market is consolidating, and bigger companies like IBM, BEA Systems, Oracle, TIBCO Software and Microsoft are adding BPM tools to their portfolios and combing those with an integration platform and SOA (service-oriented architecture) framework.
To keep up, companies like Metastorm are broadening their horizons. "Some of the leaders in the BPM suite category are growing and being considered for the broader application platform category, including Lombardi [Software], Pegasystems and Metastorm," said Gartner analyst Janelle Hill, in a July 18 interview with eWEEK. "They often find themselves compared to the big middleware vendors."
Hill said the BPMS category is one of the fastest-growing segments in software with over $1 billion in sales in 2006, a number that is expected by Gartner to jump to $4 billion by 2011.
Despite this growth, there are some real challenges to implementing SOA, which is the starting point for executing and orchestrating processes. One of those is the need to re-engineer existing IT assets for SOA, an exercise that is "painful, takes time and is hard to get funding for," according to Hill. There are also departmental turfs to consider.
"The other [SOA] challenge is really cultural and organizational, not technical," Hill said. "The minute you start trying to coordinate processes that cross boundaries and lines of authority, it gets difficult."