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3/27/2007
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Gartner Sees Strong Growth, Vendor Consolidation In BPM Market

The market shift toward business process management suites is expected to leave many pure-play BPM vendors behind, particularly as major infrastructure vendors start flexing their muscles in the market

Business process management suites are expected to be among the fastest growing software segments in terms of revenue through 2011, a market researcher said. At the same time, however, the number of BPMS vendors is expected to shrink through consolidation.

The worldwide market for BPMS is expected to reach $2.6 billion by 2011 from $1 billion this year, Gartner said Tuesday. With a compound annual growth rate of 24%, BPMS is expected to outpace many other software segments.

As the market grows, Gartner expects to see a shift away from pure-play business process management products that address human-to-human or system-to-system workflow to BPM suites that implement process management practices in a more consistent, adjustable, and unified manner across the entire process lifecycle.

The shift towards suites and the recent entry of major middleware and infrastructure vendors are expected to create "major challenges" for existing pure-play BPM vendors, Gartner said.

"The barriers to entry (to the BPMS market) will continue to get higher, as buyers expect strong capabilities to support their business process platform model,” Michelle Cantara, research vice-president at Gartner, said in a statement. Out of the 50 pure-play BPM vendors Gartner tracked in 2003, only 25 met the criteria as a BPM suite vendor in 2006.

By 2009, platform or application vendors will acquire four or more BPM suite vendors, Gartner predicted. Vendors such as IBM, SAP and Oracle are expected to move aggressively toward maturing their BPMS offerings. Others, such as Microsoft and CA, are expected to lag behind, and pursue BPMS as a complementary market to their middleware offerings, particularly in the context of service-oriented architecture initiatives.

Indeed, demand for BPMS is forecast to accelerate sharply this year as companies combine spending on SOA initiatives with BPM programs, Gartner said. A 2006 survey by the researcher found that companies expected to spend 22% of their IT budgets this year on SOA, Web services, and Web 2.0 initiatives. “Because BPM is a major reason for turning to SOA, companies are likely to target some of their SOA software spending to BPMS,” Cantara said.

In 2006, North America and Western Europe remained the largest regional markets for BPMS, with 50% and 32% of the market, respectively. Asia/Pacific represented only 7%, but it's expected to record the highest growth rates over the next six years, reaching a peak in 2008 of a nearly 35 percent increase from this year.

For end users of BPMS, Gartner listed three top best practices. First, companies should appoint a business process analyst to work on each major project. In addition, companies need to be aware that no single approach or offering from a single vendor will be sufficient.

Secondly, business executive need to form a strong partnership with IT, recognizing the department as an enabler of BPM, not a leader. And thirdly, companies should create a BPM center of excellence, and select an experienced person to lead it.

As to the three pitfalls companies need to avoid, Gartner listed first a lack of executive support, and the use of people with limited BPM skills. Secondly, companies should avoid having an unclear scope of processes, and, thirdly, a lack of a robust governance framework.

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