By Rod Favaron, CEO Lombardi

I get asked about market consolidation all the time. Customers, prospects, industry analysts and investment bankers want to know how companies like Lombardi can continue to thrive in the face of the relentless consolidation drive by IBM, Oracle and SAP. The answer is simple: innovation. Markets always consolidate. That very fact creates opportunity for the companies that are able to innovate. Consolidation and innovation actually feed each other. How?

Let’s look at consolidation. How does it benefit the end customer of software? The promises are many: better integration, comprehensive functionality, simpler management and streamlined procurement. That last point - streamlined procurement - may be the only promise delivered to date.

In a recent article in CIO Magazine, Martin Veitch commented - “IBM and Oracle seem to be in a race to build up the world’s largest miscellany of enterprise software programs,” and “customers continue to have faith until the next procurement round. However, a lot of people are unimpressed by the levels of integration and R&D that follow the incessant deal-making.” Within Lombardi’s own Business Process Management market, Oracle’s acquisition of BEA and the resulting announcement of a combined BPM strategy got similarly low marks from industry observers.

The end result is that customers wait many years - and still do not get products that can solve their immediate problems. They get roadmaps for rationalization and consolidation. They get long lists of product lines and product names. Take Oracle as an example. They announced the Fusion roadmap in 2005. At that time, oil was $50 a barrel and the housing and banking sectors were clicking along at historic levels. The world market has changed dramatically since then, but Oracle is still trying to deliver the original Fusion roadmap. And now, that roadmap is muddled again by the BEA acquisition.

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