The Cambridge, Mass.-based provider is launching a BPM Platform as a Service (PaaS) that essentially turns corporate IT departments into their own BPM Software as a Service providers. The on-premise hosted model offers two boons in one, boasts Pegasystems, providing the efficiency of a SaaS offering without the anxieties of sending proprietary business information off into the "cloud."
"The customers we work for have not asked for a hosted BPM solution because business process management is so close and critical to their proprietary information," said Russell Keziere, senior director, BPM marketing, at Pegasystems.
Customers are looking for a BPM solution that is fast and easy to implement for their business users. "But they also need all that proprietary information -- their working methods and processes -- to remain very close to their chest," Keziere said.
The Pegasystems offering comes at a time when competitors, including Appian Corp., with Appian Anywhere, and Fujitsu Computer Systems Corp., with Interstage-enabled SaaS, are dipping their toes into what experts agree is a nascent market. Indeed, analysts at Gartner Inc., who have pegged the BPM systems market at more than $1 billion in sales in 2007 and predict a 24% compound annual growth through 2011, disagree on whether the few BPM SaaS offerings out on the market now even meet the definition of SaaS. The hallmark of SaaS deployment is that it uses the "one to many" model -- a common concept code used by many companies at the same time.
BPM PaaS, a viable model for large, federated organizations
Pegasystems' target customers are large organizations fielding as many as 30 to 40 business process management projects, Keziere said. They tend to be old hands at BPM. Citibank, Pegasystems' first and biggest customer, is a big believer in business process optimization -- but not in a completely hosted model. Because many of Pegasystems' customers' applications are mission-critical and involve back-end systems that live behind the firewall, security is a big concern.
IT shops can play the hero with an on-premise platform. "When a business unit comes up and says we have this application that we want to build using our standard BPM toolkit, IT can set up the business user as a tenant of the platform in about a minute," said Kerim Akgonul, vice president of product management at Pegasystems.
Once IT identifies a business unit that wants to build a BPM solution, a click of a button instantiates a version of the platform for that unit's use. Then the unit can define its own business rules and processes and data structures directly on that environment, Akgonul explained.
Michele Cantara, who covers the software markets at Stamford, Conn.-based Gartner, said the Pegasystems offering is a way to link or federate multiple BPM solutions within an organization.
"You can think of it as private cloud services. It is extremely useful for organizations who want to move to a shared service environment for BPM," Cantara said.
In fact, Pegasystems wants to make it "very easy for more people to use its system," Akgonul said. It is being "generous with sharing hardware and software," so companies don't have to buy new machines and install new databases and application servers, he said.
Gartner analyst Daryl Plummer put his stamp of approval on the Platform as a Service model, in a statement included in the Pegasystems announcement Thursday.
You can think of it as private cloud services.
Michelle Cantara, analyst, Gartner Inc.
"We believe that there are more immediate and practical uses of cloud-enabled technologies than hosted SaaS, and using them to encourage BPM adoption and reuse within an extended enterprise makes sense," Plummer said.
Akgonul said the foundation for the offering rests on Pegasystems' grid computing expertise. "I have to stress that Pegasystems is the only BPM vendor that runs on z/OS and has been validated by IBM for this level of grid computing capability," he said.
The platform is able to manage multiple instances of the BPM systems that are running, as well as able to share certain common practices, Akgonul said. Two business cases where the platform could be put to good use are when a company wants to extend BPM to a virtual workforce, and in mergers and acquisitions, when companies are consolidating systems.
"Not that there is much of that out there," Keziere joked. "But if you were a big bank and happened to need to acquire another big bank in a hurry, this would be a good way to do that."
Let us know what you think about the story; email Linda Tucci, Senior News Writer.
This was first published in October 2008