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June 7, 2012updated 19 Aug 2016 9:28am

Progress Software: ‘It ain’t over’

Rejigged firm to become cloud development and deployment maven

By Jason Stamper Blog

Progress Software

Progress Software says it may be down but it’s most definitely not out – the fact that it is canning 10 non-core products and losing 10-15% of its staff is not enough to dampen its spirits, at least not yet.

The firm was until recently offering a broad range of application development, deployment, integration and management tools as well as business process management and complex events processing. It recently announced a major restructuring that sees it putting up for sale 10 non-core products and refocusing on its OpenEdge business, which it says is perfect as a Platform as a Service (PaaS) in the era of cloud.

Speaking to me yesterday, Colleen Smith, VP of cloud and Software as a Service (SaaS) at the firm, said things are by no means as bad as they may at first appear.

"The ‘headcount reductions’ that we are making include all of the staff that will be transitioning out of the company with the sale of those 10 products, so although there will be some redundancies amongst the core business most will be part of those divestitures," she told me.

As for the firm refocusing on its OpenEdge business – whose roots can be traced back to the beginning of the company – Smith said it may have heritage but it’s by no means antiquated. "We’ve made huge investments in OpenEdge and the database," she says. "OpenEdge 2011 was cloud enabled, and it allows our 100,000-plus customers to deploy in the cloud with one click, or to deploy on-premise. It’s no longer a 4GL – it has an advanced business language and it’s fully integrated with .NET and the web. It’s not your father’s 4GL."

Smith noted that despite Progress’ acquisition strategy in recent years, it was always OpenEdge that kept Progress going. Despite acquiring companies like Actional ($32m); Savvion ( $49m) and IONA ($162m), OpenEdge is claimed to account for most of its new license deals and 25% of its customers are themselves cloud providers.

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But isn’t the selling off of BPM firm Savvion an admission that the company’s entire Responsive Process Management (RPM) vision was utterly misguided? "We still believe that BPM is a growing market but it needs a go-to-market strategy that is fundamentally different from our application development and deployment business," Smith argues. "We’re a $500m software business and we need to focus. When we spend $1 we need all of that dollar to go into our core business."

Indeed Smith believes the 10 products the firm is selling — Actional, Artix, DataXtend, FuseSource, ObjectStore, Orbacus, Orbix, Savvion, Shadow and Sonic – will be "leaders in their markets". She says the company has had as many as 150 enquiries from companies interested in buying one or more of those assets, and while the company said it would take a year to sell them she said it could be done inside six months. She also believes that since integration work has been done between some of those products, it’s possible one company would buy several of them together.

The review of Progress’ strategy was kicked off by incoming CEO Jay Bhatt in December and it took five months, with help from JP Morgan. It was clear something was awry with the business: in its first quarter it reported revenue down 7%, and operating and net income both down around 40%. Its stock fell 40% in a day.

The core products it’s decided to focus on, and add more cloud hooks to, include OpenEdge, DataDirect Connect and Apama Analytics and Decisions.

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