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Pegasystems continues strong growth trajectory

Neil Ward-Dutton

Thursday, February 25, 2010 by

A couple of days ago I listened into Pegasystems’ annual earnings analyst call to find out what the company – the largest specialist “pure play” BPM technology provider by revenue, by my reckoning – managed to make of 2009.

Off the back of 50% license revenue growth in 2008-9, the company achieved another year of 50% license revenue growth this year – with overall revenue growing 25% to $264m. This is a company on a strong growth path, and let’s not forget: Pega is not a fresh-faced VC startup growing from zero revenue. Turning 2 consecutive years of 50% license revenue growth is a pretty spectacular result for a company that’s been going for 27 years. As CEO Alan Trefler said on the call: “it’s been a remarkable year”.

I’ve long said that BPM is one of those areas of business-IT investment which is both cyclical and counter-cyclical from an economic perspective: in bad times people look to BPM to become more efficient; in good times people look to BPM to bring products to market faster, integrate acquisitions more quickly, and so on. Bearing in mind that Pega’s heartland is financial services, it’s fair to say that the company has succeeded in a pretty chaotic environment.

What’s the secret of Pega’s success? Well, of course it’s not the only company in this space doing well – most of the pure-play vendors have been turning in very healthy growth. And its technology certainly isn’t the sexiest to look at or most instantly-consumable.

But the technology is very flexible and powerful – and on top of this foundation Pega has maintained a very tight focus on building up competence, credibility, reusable functionality and referenceability in a few key process areas – many of which relate to customer interactions (sales, service and support).

Pega is definitely “going for growth” – last year it added 60 sales & marketing staff, and 60 R&D staff. This year it’s set to do the same, with particular focus on international expansion, growing partner relationships and broadening its pre-built frameworks across more process scenarios and industries.

As part of our forthcoming set of BPM offering assessment updates, I’ll be revisiting Pega’s offering in detail in the next month or so. In the meantime if you’d like to read our free Capability Summary and Overview of Pegasystems’ BPM software offering you can get it here. Advisory service clients can read the Full Capability Assessment for Pegasystems here. For more analysis of BPM trends and best practices, click here to download free Guest Pass reports, and click here for more on our premium BPM advisory service.

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