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| Home - CEO Spotlight - Mar 06 Issue |
CEO Spotlight: Robert Farrell, Metastorm Inc.
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Angel Mehta: Business Process Management emerged with a lot of hype years ago when venture firms were pouring money into it, but has it evolved the way everyone expected? Has the market grown the way investors and entrepreneurs forecast?
Robert Farrell: Yes, and frankly some venture guys are still pouring money into these deals and it has become just as big as we thought. Business Process Management was an offshoot not only of EAI but also of document management, business intelligence, and workflow.
If you look at the Gartner data, I think what their latest report said is that the market is somewhere around $700 million in 2005 for BPM pure play. Don't quote me on that without looking at the report, but it's about 15% annual growth in BPM pure play.
If you look at an IDC report that came out last year, they forecast that the market would be about $1.5 billion in 2005, a growth in BPM of 34% vs. 7% for software overall. So the reality is somewhere between those two poles, of course, but the point is, BPM is huge.
What we see people doing now is really changing the way that they're thinking - they're looking to either get more return out of their legacy environments; they're looking to deal with compliance and risk management or they're looking for ways to leverage Web services/SOA and they're looking to use Process Management as a means to do that.
If you look at enterprise application integration, and coming from Mercator, I have that unique perspective, the Business Process Management that's associated with Enterprise Application Integration is really just at the system integration level,-- integrating applications at the data level in a system to system fashion. While that is one level of process management, a complete BPM solution ties in the human-to-human element, which is really where you get a lot more value and if you think about any organization, their unique mission critical and complex human processes differentiate them. That doesn't mean that those humans don't use technology to do those processes, but nonetheless they're people and the way in which they do their work is really what you want to try to capture and facilitate within a true BPM solution because that is what can really give you significant ROI.
Angel Mehta: How does the consolidation in the industry affect you? Has it altered the landscape for you at all?
Robert Farrell: Our strategy is to build Metastorm by growing at a rate faster than the market overall and making choice acquisitions that expand our product diversity and distribution. The recent acquisition of Fuego by BEA represented an excellent multiple on revenues for the Fuego shareholders. I think this transaction, combined with Tibco/Staffware, Oracle/Collaxa, Onyx/Visuale, Adobe/Qlink, Verity/Dralasoft, Captaris/Teamplate, and Metastorm's acquisition of CommerceQuest all signify the importance of BPM software players in the market overall.
Angel Mehta: So let's talk about the Tibco acquisition of Staffware and how that has affected you, if at all…
Robert Farrell: It hasn't. Tibco screwed up Staffware. Most of the sales force from Staffware left and they have not been able to capitalize on many other of Staffware's assets. They tried to put more of a process integration spin on the whole thing and that has lost the intrinsic value of what was behind Staffware's BPM offering from a human to human perspective. We used to compete with and even lose to Staffware. When Staffware enters a competitive situation with us now under the Tibco label, it actually helps us - even in situations where Tibco's an incumbent on the integration side.
Angel Mehta: Years after the hype in this space built and subsided… are you still having to evangelize the value of BPM, or has it become part of the CIO's agenda?
Robert Farrell: Half the time, we enter an account through IT, and there is no evangelism required. The CIOs get it. They have all kinds of initiatives going. They don't want to hear us evangelize - they're sick of it. They want to hear specifics about solutions, features and technology.
On the business side, you have one of two things happening; the people are discovering that this thing called BPM is a way for them to solve multiple process problems that they have. Or through vertically oriented BPM solutions like 'new product development" or 'new store opening'. They don't really buy BPM in that first transaction. What they buy is 'new store opening" and then it becomes our job in that account to leverage BPM across other areas. So in those cases evangelism is required.
It's always a challenge because if you go to an industry conference, let's say, and you get a keynote spot to talk about BPM, what I like to do is talk about real results, real metrics that people have achieved, and real ROI. I like to mention company names and what they did and how they did it and talk about BPM in practice. I'll do that and I'll get feedback that says, well, you know, you really didn't tell me what BPM is. So you still have people going to conferences to learn what BPM is. At other conferences I'll do a 'what BPM is" speech about why it's important and why it's a good thing to do and the feedback I'll get in those situations is "we know all about that, tell us what people have done". So it's still maturing and I would say that its evolution, as a market has not gone over the chasm yet.
Angel Mehta: What are the toughest leadership decisions for you to make in a market that is evolving as quickly as this one?
Robert Farrell: Decisions about what to focus on. It's the same story, Angel. There are lots of things that we can chase, lots of things we can do with the product… but you have to decide what NOT to do. You have to say, "sure, we might be walking away from a million dollar opportunity - but that's what's required to win the end game." It's a constant struggle to make sure that we're focused on the stuff we can do well, and managing the field sales force to this principle is a huge challenge.
Secondly, picking the right companies to acquire is tough. We need to make sure that we're picking a company that is going to supplement and complement our product, rather than create confusion in the field amongst our sales force and customers. We made the decision to go with CommerceQuest, of course, which turned out to be a great decision - the integration was very smooth.
Robert Farrell serves as President and CEO of Metastorm and oversees global operations and strategic direction. He brings over 20 years of experience in building high-growth software companies. He has extensive background in international business and technology and most recently served as President of Mercator Software, a publicly traded provider of enterprise application integration solutions. For interview feedback, contact Robert at rfarrell@metastorm.com
Angel Mehta is Managing Director at Sterling-Hoffman, a retained executive search firm focused on VP Sales, VP Marketing, and CEO searches for enterprise software companies. He can be reached for feedback at amehta@sterlinghoffman.net
 
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