Just before the Christmas holidays, I published a “gut reaction” post on the newly-announced acquisition of Lombardi by IBM. The post was written before I’d had a chance to hear the analyst briefing, and since then I’ve had the chance to hear more from both IBM and Lombardi and so it’s only fair that I revisit my initial take.
Here’s my updated take in just a few words: it’s not wholly surprising to see Lombardi get bought, but the acquirer was still a bit surprising. How IBM positions and sells Lombardi’s technology is the fulcrum on which IBM’s strategy will work (or not), so getting this right is crucial. The danger is that Lombardi’s proposition gets diluted to homeopathic strength, and it just ends up as a tint on the packaging of WebSphere products.
If you’d like to read more, here it is…
The title of my earlier post was “Holy crap, IBM is buying Lombardi“. Why such an eye-catching title? After all, software companies get bought by other software companies every day – and IBM is responsible for a big chunk of that (it spends $billions on software company acquisitions every year). Open-source BPM software vendor ProcessMaker’s Brian Reale, in a market economics-focused post, points out that, based on numbers from IDC and others, the market for BPM technology looks to be ripe for VC-fueled activity.
The reason for the post’s title was twofold, really: first off, IBM’s public position on BPM until the point it announced the planned Lombardi acquisition was pretty much “we have BPM covered, thanks to our WebSphere and FileNet portfolios.” Indeed as MWD’s own assessment of IBM’s BPM offering shows, its challenge is not one of a lack of BPM products. Secondly and more pointedly, Lombardi’s public position was pretty much “anti-IBM”. As I pointed out in my last post, this is true from a product and technology perspective: but it was also true from a marketing and positioning perspective. Lombardi President/CTO Phil Gilbert, for one, had made no secret of his disdain for IBM’s BPM rhetoric.
Looking at this from another angle, the big gap between Lombardi’s market position and IBM’s was, according to IBM’s Craig Hayman (head of the WebSphere division), the real driver behind the acquisition: as he said on the analyst call, “we’ve been looking to expand our BPM conversations with business managers, and we’ve been consistently getting one answer when we try and do this – Lombardi“. But IBM is trying to straddle a particularly pointy fence here. By validating the value of Lombardi’s “business focused” position, it’s exposing the truth about the position it had itself tried to project – of a set of IBM tools and people that could talk to business managers as well as IT folk. Clearly, this was more aspiration than reality – but IBM doesn’t want to talk about this, quite understandably.
This dilemma is probably behind the strange position (explained nicely by Bruce Silver) that IBM tried to attach to the Lombardi offering in its initial calls and presentations about the acquisition: that Lombardi is for “departmental” BPM and that the rest of IBM’s offering is about “enterprise-wide” BPM. This just doesn’t make sense (and in a later call I had with IBM it was acknowledged that there’s more work to do).
What IBM probably can’t bring itself to say instead is that the Lombardi offering is “business-focused” – designed 100% around enabling businesses to quickly deliver targeted value in solving their process problems; whereas the WebSphere (and FileNet, to a lesser extent) BPM piece is much more naturally aligned with the comfort zones of big enterprise IT shops and a more traditional (highly structured, controlled, slower) way of translating requirements into software systems.
So where does this leave everything?
Although I previously highlighted how different Lombardi’s and IBM’s BPM technology offerings are, I don’t think that the delivery of an integrated stack of products is at all vital in this acquisition. Certainly, it’s nowhere near as important as IBM retaining Lombardi’s combination of smart sales, marketing and development groups – and clearly and accurately positioning Lombardi’s offering vs. the rest of IBM’s BPM portfolio. If IBM can keep a critical mass of Lombardi talent on board and learn from them, rather than forcing them to fit into a general-purpose IBM template, then it will do absolutely no harm if Lombardi’s products remain almost completely ring-fenced – at least in the short term. Work on things like BPMN 2.0 support should, over the next few months, enable IBM to deliver interoperability for customers where it really matters – even if conceptually the result is less than elegant.
Echoing something that Mark Smith of Ventana blogged recently, I too wonder whether – taking all the above into account – WebSphere is the best place for Lombardi. The recently-created Business Analytics and Process Optimization division of IBM Software actually seems like a more natural fit. Ambuj Goyal, the guy leading this new division, is very much building it to be centred on business-focused solution selling and productised services – rather than just a list of software products. Everything about how this division is being built shouts “business relevance” – rather than “IT relevance”. Let’s wait and see, though.
As Craig Hayman said on the analyst call before the holidays: “You will challenge us to make sure we do the right thing and don’t screw this up.” IBM is very experienced at the mechanics of software company acquisitions: I’m really hoping it also gets the soft stuff right here, because I’m an advocate of business value for IT customers – not of value for IT company shareholders.
With that in mind, what does this mean for Lombardi customers? Well, if IBM can live up to the promises it’s made about continuing to support Lombardi customers and avoid drowning Lombardi in Blue-wash, then I think we’re all good – and along the way IBM certainly has a lot to gain, too. The biggest danger is that some kind of organisational immune reaction within IBM occurs, Lombardi can’t take the position that it should, and its strengths are diluted so it ends up as a homeopathic remedy which only shows up as a tint on the packaging of the WebSphere portfolio.
I’m scheduled to be revisiting IBM’s WebSphere and FileNet offerings in our assessment programme in the next couple of months, and with any luck I’ll be able to capture Lombardi post-acquisition too. So watch this space for more detail as things shake out.
You can read our free Capability Summary and Overview of IBM’s BPM software offering here, and the Overview of Lombardi’s offering here. Advisory service clients can read the Full Capability Assessment for IBM here, and for Lombardi 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.
Tags: Industry news
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