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April 7, 2004

Onyx acquires Visuale BPM assets

Onyx Software Corp is further stepping up the interest in business process management technologies that it focused on last month when it launched Onyx Enterprise CRM version 5.0, with the acquisition of the BPM assets from Visuale Inc.

By CBR Staff Writer

The CRM suite vendor said its ambition is to fuse BPM with CRM by providing non-technical users with the capability to design and modify end-to-end business processes using graphical workflow and business rule design tools that are integral to its CRM suite. Overall objectives include reducing the need for IT support and associated costs and delays, while simultaneously enabling business agility.

BPM capability was introduced with version 5.0, and Onyx hopes the acquisition of the Visuale BPM rules engine will enable it to expand the capability and offer support for more sophisticated processes.

They have a sophisticated rules engine, said Brian Smoltz, director of product management. Most application vendors have rules engines but they operate in complex environments. It is easy to think about it but hard to write and put it into an environment and maintain it.

Following the acquisition Onyx will have access to BPM technology that will support long-running, multi-user workflows that can, in some cases, extend beyond the walls of the organization, to partners and suppliers. It is looking to the new technology to support sophisticated vertical business processes for example. This could cover complex tasks like account origination within the financial services industry where there is a need for multiple approvals and security permissions that may have to run across multiple organizations, requiring support for functionality like parallel routing.

Onyx is expected to pay $4m in cash and stock for the BPM assets of the privately held Los Gatos, California-based company, comprising an initial payment of $400,000 in cash and Onyx Software common stock valued at $1.6m in the form of 504,891 shares. One year after the close date of the deal, Onyx will make a further $1m payment, which can be cash or stock valued at the then-current fair market value. In years three and four following closing, Onyx will make minimum royalty payments of $500,000 in cash based on sales of Onyx products incorporating the acquired technology.

The emphasis on BPM is part of Onyx’s active CRM strategy whereby it hopes to change the way CRM systems are used, from applications where data is parked to using them to actively drive business operations. It is also Onyx’s small response to wider changes in the market whereby enterprise vendors such as Siebel Systems Inc and SAP AG are moving to provide business process integration platforms.

Despite the focus on BPM, Onyx said it is not changing tack and will remain a CRM player. In terms of the technology mix, its perspective is that it is infusing CRM with BPM, according to Smoltz, and wants to be the vendor customers go to if they are looking to automate their process. We have an opportunity downstream to do non-CRM business but it is not our primary goal, he said.

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Customers will not see the fruits of the acquisition until the end of the year however, as the company plans to spend the coming months tightly integrating the Visuale BPM engine with the Onyx platform. Built to .NET standards, Visuale’s technology is compatible with .NET based Onyx software.

The Bellevue, Washington-based company also announced first-quarter prelims showing a sequential improvement in license and service revenue. It expects revenue to be around $13.8m. Expected license revenue of $3.6m is still very low in proportion to overall revenue. It has improved its cash position by $0.8m from $11.9m as of December 21, 2003 despite a $1.5m cash payment during the quarter towards the resolution of excess facilities.

Onyx is optimistic about the outlook for the second quarter, anticipating another sequential increase in service revenue and improvements in license revenue due to the new opportunities created by the release of 5.0 and the potential highlighted though the Visuale technology. The corner has finally been turned and now we are back on the way up, said CEO Brent Frei. Q1 is traditionally soft so we are pretty bullish.

This article is based on material originally published by ComputerWire

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