Why is there no Marc Benioff in the Pure Play BPM Software Industry?

By | December 21, 2010 | BPM, Industry Analysis, Open Source, SAP

Marc Benioff started salesforce.com in March 1999 with the mission statement – “The End of Software.”  In the process he created a billion dollar, 100% cloud CRM company.   All the other CRM players continue to chase SalesForce to try and claim a distant second place in a rapidly transforming software industry where

the cloud = the future

So why has nobody in the BPM space been able to do anything similar?  And as SalesForce continues to reposition itself from SaaS to PaaS (Platform as a Service) with “applications” at the center of the universe instead of CRM, many have long believed that SalesForce is the company best positioned to be the the cloud application provider.

So where are the BPM pure plays?  I have long argued that BPM was and still should be the rightful ruler of this space.  And the BPM industry should have had and probably still should have an advantage positioning itself to dominate this space.  However, nobody has emerged as a clear winner.

Two companies were really the pioneers in the Cloud BPM space – Nsite and ProcessMaker (disclaimer – I am the CEO of the latter), both launching SaaS BPM services at around the same time in 2005.  Nsite got gobbled up by Business Objects which intern was gobbled up by SAP.   I must admit, Nsite was a very cool product way ahead of its time and was giving ProcessMaker a good run for its money.  But, inside SAP, Nsite basically died.

Then there was a lull and as Cloud became the darling term of the media, more and more BPM companies launched their BPM in the Cloud offerings.  Intalio suffered a full face lift as its investors forced it to reposition from Open Source to PaaS seeing that as the only way to recover the masses of money that were invested into the company.

Perhaps the most important ones lately are IBM’s launch of Blueworks Live (November) and now PegaCloud (December).  Blueworks claim to start at $10 per user per month and Pega at $155 per user per month.  IBM seemed to have enough common sense to copy every other Cloud company on the planet by making their website look fluffy and friendly which is certainly the current trend in SaaS websites.  Pega can’t seem to break free from their own suit and tie approach and their website seems to have one foot in the cloud and the other foot down on earth in an office cubicle.

The fact is that users expect the cloud to be simple, cheap, and fluffy.  IBM and Pega are not simple, fluffy, or cheap.  So, can they successfully manage their way in this world?  Certainly, SAP, PeopleSoft and others haven’t been able to do it with their CRMs.  It is just too difficult to turn to one client and say – your software costs $2 million dollars and then turn to another client and say, your software costs $20 per user per month.  This is touch to do for two reasons:  1) their internal culture won’t allow it, and 2) the BPM industry still hasn’t found the right model to allow for breakaway success at $10-$20 per user per month.  I am happy using 37signals type software in the Cloud, i.e. I don’t really care if 37signals consists of 2 guys or 200 guys sitting in a garage or in a plush office somewhere in Chicago, but BPM is a different beast.

So, my prediction is that these initiatives won’t fair well.  If IBM and Pega want to have a simple offering for the cloud – they will eventually have to acquire it.  And then, if they don’t want to suffocate their acquisition, they will have to keep their distance from the management of the acquired company so as not to infect them with their corporate ways.

In Mike Vizard’s blog last week on the subject, he has a gem of wisdom – “The trick, of course, ” he says, “is finding a BPM offering in the cloud that gives customers the option of allowing them to continue to run that application in the cloud or move it to their own servers, or potentially some other cloud computing platform, later on.”

I have always argued this and spoken on the subject in numerous cloud related speaking engagements.   And, with my roots in Open Source Software I have always added the argument that customers should be ware of the cloud if they don’t have an easy way to get their data and the application itself at a later date.  Richard Stallman is absolutely correct to sound the warning bell here.  The best combination is cloud + open source so that customers can sleep well at night knowing they will always have access to their data, the software it runs on, and the software code itself.

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