In the enterprise software market a “new” value proposition comes along and dominates about once a decade: relational database in the 70s, ERP in the 80s, CRM in the 90s, collaborative/search-based computing in the decade that just ended. Of course the value proposition is never exactly that crisply aligned with the calendar. And the new big thing has usually been rattling around computer labs and advanced IT departments for 10-20 and 5-10 years respectively before the investing public discovers it.
Just as regularly the new value proposition spawns a couple of dozen “pure play” providers of the software that delivers the “new” value proposition. Their success in turn spawns interest from the big software suppliers. Of course, some of today’s big software suppliers were the new boys on the block in the previous decades: Oracle (ORCL) in the 70s, SAP in the 80’s, Siebel in the 90s, Google (GOOG) a few years ago.
As this cycle repeats, these major players along with IBM and Microsoft (MSFT) pair up with some of the pure plays—often through acquisition. When Progress (PRGS) acquired Savvion a few weeks ago, I thought the game was up for business process management (BPM).
I'm having second thoughts. Each decade, as you see from the list above, one of the pure plays stays independent, takes off, and gets to move into the inner circle by itself. When I first started researching BPM, I counted 100 players. With Progress acquiring Savvion (which it will run as a pureplay if history repeats itself) and IBM’s acquisition of Lombardi, the list can be counted easily with body digits, perhaps without even having to touch your toes.
But I thought of that history (BEA, PeopleSoft, J.D. Edwards and a few more also came to mind but didn’t quite fit my decade-thing) when I heard Matt Calkins, CEO of Appian, announce
“We are not for sale.”
It’s Texas Hold ‘em and he’s going “all in.” He sees Pegasystems (PEGA) as the leader in the competition with Appian to be the BPM supplier still standing at the end of process. I add Metastorm, which filed an S-1 right before the economy collapsed but then diplomatically withdrew it, and a few others as possibles as well.
But one thing Appian has going for it, strictly historically, is it is a true pure play like Siebel, PeopleSoft, Edwards, BEA, etc. It’s had its eye on the prize since the beginning. All the others top of mind were something else first with the exception of Jan Baan's Cordys. Pega was a banking app, for example.
Oh well, don’t bet on history (and you can’t bet on Appian at all yet). But Appian does have a strong verticals strategy based on its traditional strength in the U.S. Federal government, an interesting channels strategy involving CISCO (CISC) among others, and treats software as a service (SaaS) and cloud computing as means to an end, not ends in and of themselves. Given its U.S. federal government angle, Appian also has an interesting open source philosophy: stressing the community concept rather than the licensing/business-model point of view.
And Appian apparently had a real good 2009 (look under the News tab), at least to the extent that non-public companies talk about their numbers. Not much you can do about it yet but keep Appian in the tickler file. I'll let youknow how it turns out come 2019.
-- Dennis Byron
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