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Wednesday, April 25, 2012 by Neil Ward-Dutton
If you take a look at Progress Software’s home page on the web today, you’ll see the following four things highlighted (along with a blog post from CTO John Bates):
- the launch of Responsive Process Management (RPM) 2.2
- the results of a ‘BPM smackdown’ analysis that placed Savvion in a leading spot
- a case study of Apria Healthcare, based on use of Savvion’s BPM technology
- another analysis showing Actional as a leader in its space.
With the new Progress strategy outlined in a press release today, all of those four things will go away.
Progress plans to divest its Actional, Artix, DataXtend, FuseSource, ObjectStore, Orbacus, Orbix, Savvion, Shadow and Sonic product lines. So – if we take this at face value (and that’s all I can do at this stage) that means no more technology to support customers looking to implement BPM, SOA, or MDM. Instead the company will renew its focus on its heritage OpenEdge and DataDirect businesses, as well as redouble its efforts to build and market a cloud-based application platform, and increase its focus on Apama in Capital Markets (you can find out the detail the press† release).
At this stage, I have to make some assumptions. But if Progress means what people normally mean when they say “divest”, I think these divestitures could place the new growth strategy – focused in significant part around OpenEdge – at significant risk. Why? Because part of what was starting to make OpenEdge interesting to the market again was the way in which Progress was expanding the scope of the development concerns that OpenEdge could address.
There are other concerns; not least, the release highlights “Apama Analytics” and talks in other places about Big Data and analytics capabilities; but these don’t exist in any real sense today (at least, not in the sense that most people would use those terms). An intimation is made that OpenEdge will be positioned as a platform for building massive scale web applications that leverage Big Data, but that’s a long way from what OpenEdge is really doing for anyone today.
According to the release Progress expects to divest all these products/businesses by the middle to the end of 2013 – which is, any way you look at it, quite a long time away in the world of sales. I wouldn’t be at all surprised to see the pipelines for all these products to dry up very soon indeed, as prospects focus instead on potential choices with clear futures. I hope that’s accounted for in the plan!
Now of course this is a quick reaction to a significant piece of news for any Progress customer or prospect. Of course I’ll be looking for more in-depth information as soon as I can get it – and if I learn anything which adds to this or contradicts it I’ll update you all. At the moment, though, it looks like Progress is set to do a 180 degree turn, and revisit its past to try and reinvent its future.
Let’s see how it turns out… and hope that some of the very decent technologies being punted here find good homes.
I’d love to get your thoughts and comments!
I had a briefing with John Bates and Colleen Smith of Progress on 26 April, the day after I wrote the piece above, and I learned some additional detail that I wanted to share with you.
Firstly, Bates and Smith were very clear in saying that the company needs to find a space where it can be truly different for a profitable market segment, and use this to drive growth. It’s focusing on what it calls “Application Platform as a Service” (aPaaS) and at this point, its intention is to get to be the “number 1†provider of application development and deployment platforms in the Cloud”. The current enterprise IT middleware business (combining the business from Savvion, Actional, Sonic, et al) just isnít providing enough of a growth engine for shareholders; and the companyís leadership also feels that Progress has struggled to focus sufficiently as itís been fighting on a large number of fronts. By adding data connectivity (DataDirect), event processing (Apama), rules (Corticon) and visualisation (Control Tower) capabilities to the work itís already done through Progress Arcade in making OpenEdge a foundation for a PaaS offering for ISVs wanting to transition to cloud delivery, Progress believes it can find that space. It’s also planning to add support for multiple development languages, further boost analytics, and create some explicit linkages to “Big Data” management technologies.
My take is that if Progress can execute on the plan it shared with me, then it could do something really interesting Ė particularly for small and medium sized application vendors. But I also think itís got a hell of a task ahead of it to get all these additional products Ė all of which are built for on-premise installation Ė and re-engineer them sensibly for PaaS. Whatís more, because things are moving so fast in the PaaS world, I think its window of opportunity might prove very tight to squeeze through.
Secondly, although Progress plans to divest the product businesses as laid out above to help it focus much more clearly, itís currently looking at ways it can continue to make use of some of the Savvion technology in combination with OpenEdge Ė so it can continue to offer what it currently calls OpenEdge BPM (particularly of interest to its ISV partners). I didnít get a detailed view of what this might involve from a potential engineering and licensing perspective, and I think itís probably too early to say. However the company is prepared to go on record to say “While [the] intent is to divest the Savvion (BPM) and Sonic (ESB) products, [Progress is] committed to supporting features that are essential for building†and deploying agile, next generation applications.”. This is something that anyone interested in the future of OpenEdge needs to watch carefully.
Third, Progress is going to try to find buyers for its divested product lines as soon as possible; it understands that while thereís uncertainty in the market about what will happen next, those businesses could very easily freeze. Its business plan does assume some short term revenue decline as part of this strategy shift, but my view is that nevertheless Progress needs to work very quickly and diligently from here on; the initial communication fell some way short of a well-managed message IMO. Progress is also confident that it will find buyers quickly; my advice to any nervous customers using the to-be-divested products is to keep a very close eye on where those products go. Your strategy could be affected if a key technology you rely on ends up being owned by an outfit primarily concerned with milking maintenance revenues.