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January 11, 2010

Progress buys BPM player Savvion for $49m

Closely follows IBM's Lombardi buy

By Jason Stamper

Hot on the heels of news that IBM is buying business process management company Lombardi, Progress Software has announced it is buying fellow BPM firm Savvion.

Savvion is a privately held software company based in Santa Clara, California. Progress is buying the firm for around $49 million, net of cash acquired.

Savvion has15 years of market experience. The company offers what Progress calls a comprehensive, standards-based BPM suite that helps around 300 of the world’s companies – including 24 of the ‘Fortune 100’ – automate and improve critical business processes.

Dr John Bates, CTO of Progress Software, told CBR in an exclusive interview marking the news that the reason for picking Savvion rather than another BPM provider is that: Savvion is a great fit for a number of reasons: it’s a very rich product, and the BPM platform is events based. Progress, remember, has a complex event processing (CEP) product called Apama, and Bates hinted that there could be scope for some integration there.

As for why now was the right time for Savvion to sell, Dr. M.A. Ketabchi, founder, president and CEO of Savvion, told us: We have a large customer base of leading enterprises, and for them BPM is increasingly becoming more critical, with more complex solutions. For Savvion to offer them multi-national support I thought we needed several years to get there, and by then it would be too late.

Dr Ketabchi said that wheen seeking a buyer, he wanted to find a company where Savvion would fit well pretty much straight away, so that, Customers do not face disruption like Lombardi customers will face at IBM — IBM announced it is buying Lombardi just before Christmas.

Asked to summarise Savvion’s key differentiators from the BPM competition, Dr Ketabchi said: The first thing is the extent and scope of our functionality: for example our BPM comes out of the box with a business rules management system, which Lombardi does not. IBM has the Ilog business rules but there is no integration between Ilog and Lombardi.

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Second, we made sure our BPM is enterprise BPM — Lombardi, Metastorm and those others are departmental BPM. Our BPM is event-centric and supports event-centric patterns, decision-centric operations, case management and so on, Dr Ketabchi told me. And thirdly we are unique among the companies you mentioned in that we have very efficient, very effective solutions tailored to verticals, such as a Telecom Foundation and a Life Sciences Foundation.

Meanwhile Dr Bates confirmed that one area where additional integration might make sense is between Progress’ Sonic enterprise service bus (ESB) messaging technology and Savvion.

As for what Dr Ketabchi thinks about Lombardi’s Blueprint hosted modeling tool, he said: Actually Lombardi Blueprint is hosted but it’s not BPM in any way. We believe BPM solutions on demand will be very important, but Blueprint is just a hosted modeler.

We have been delivering hosted BPM through partners for some time, Dr Ketabchi said. We have very exciting plans ahead and lots of innovative ideas for hosted modeling and BPM on demand. Dr Bates added that it is too early to give further details on those plans just yet.

Dr Ketabchi confirmed that he is committed to work for Progress now, though exact details of what his position will be are yet to be determined.

Dr Bates said Progress Software wants to become a, Leading BPM player in its own right, because that’s what we’re hearing customers say they want and where we think it is going. Customers are asking for us to help make their business processes more responsive , and we of course want to make our customers successful.

Dr Ketabchi told us that Savvion has been profitable for the last 8 quarters, and that he believes the purchase price of $59m is fair.


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