Earlier this year we saw the acquisition of Metastorm by OpenText, who then went on to acquire Global 360 as well. For many observers, whilst the opening moves being from OpenText may have been a surprise, the fact that vendors were looking at cross acquisitions certainly was not.
In some ways, BPM vendors may well have been positioning themselves for takeover when they launched into Case Management, for in doing so they will have raised their profile with ECM vendors and potentially made it clearer to them why they needed to beef up process within their portfolio.
The linkage between the two markets makes a lot of sense, and Case Management just proves it, especially in the financial and insurance sectors. These sectors have been highly document-focused with heavy regulation and, of course, the routing of and acting on of documents has been a key part of their many process initiatives over the years. It is likely that, in some part, the purchases will have been driven by the view that BPMS sales were beginning to hurt traditional ECM sales, at least in some vertical markets.
What may be most surprising is that, until this week, we had not seen any similar moves by other players in the ECM sector. EMC, Adobe and Xerox might have been expected to follow the lead of OpenText, but it seems for now they are either happy to let others lead, or are still trying to find a position that works for them.
So, this week, the unexpected announcement was that Lexmark was the first to follow OpenText, by acquiring Dutch BPMS vendor Pallas Athena. It is taking Pallas Athena into its standalone business unit, Perceptive Software.
With a reported price paid of $50m, this also marks one of the smaller number of BPMS acquisitions where the purchase price was publicly stated. Industry watchers will be sure to be looking at the Pallas Athena deal along with the Global 360 one in order to get stronger ideas on the value of remaining BPMS players.
Of course, while OpenText may be credited with being the first in the current round, others would suggest that IBM actually started the trend with their acquisition of Filenet some years ago.
This latest acquisition is one of many over the past couple of years in the BPM space causing some to question the long-term survivability of BPM vendors. I think it is true that now people are starting to see what value others are putting on companies, further acquisitions are likely, but probably no more than one would expect in a relatively fragmented market.
What will be more interesting is to see which type of convergence will dominate, the taking of BPM into ECM, or the folding of BPM into applications by ERPM or CRM type vendors, or integration markets. The initial rounds of acquisition were certainly driven by Integration - witness the TIBCO acquisitions and the WebMethods acquisitions at the start.
In the short term don't be surprised to see another two or three BPM vendors joining up with or being acquired by others in the ECM sector. It does not make sense for those without a strong BPM story to remain on the sidelines much longer.
Whichever way you look at it, process is being increasingly seen as a key driver and the need to provide customers with easy ways to gain insight into, improve and create agile processes is a must.