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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Its been a week since SAP’s big BPM announcement. Not exactly an earth-shattering announcement. My summary - at some point in the future (2 years?), SAP-only shops will be able to more easily configure internal SAP application workflows. This is a SAP application workflow band-aid, not a viable BPM offering. I am not alone in this assessment - the reviews have ranged from unimpressed to downright negative.

Honestly, this is no surprise. The big software vendors - I call them Stackers - have been and continue to pursue the promise of BPM half-heartedly. Actually, they have done everything in their power to bury BPM deep in what they view as their real markets. You can’t blame them - BPM ain’t in their DNA. And it is really hard to change your DNA.

SAP wants you to buy applications from them. BPM to them is just some integration and workflow between their applications. Always has and always will be - no matter what the Netweaver BPM roadmap says. Not to get too cheeky, but SAP does not have the best reputation in this sense - see their public spat with Waste Management about non-delivery of promised functionality.

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I’ve been seeing a bit of blog postings lately on the reality of SaaS on Demand or SaaS BPM.

Last week, Jason Stamper at CBR included some commentary on a beta product that he had heard about through the Process Factory. And couple of weeks ago, Jack van Hoof - who writes on SOA and EDA, posted a well thought-out blog entry about the marriage of BPM and SaaS, including the possibilities and the complexities at hand.

I love seeing this kind of dialogue on the Web because SaaS BPM is extremely popular with our customers right now. However, despite the aspiration of many developers, SaaS and BPM is NOT an easy combination. Nor is it likely that the two will ever be completely married in the traditional integrated form.

We launched Lombardi Blueprint a little over a year ago. It’s a SaaS-based modeling tool that integrates with Lombardi Teamworks, which operates behind the firewall. What worked so well in this case was that anyone in an organization could access the modeling tool to help shape a BPM project during the discovery stage. It doesn’t need to be integrated into legacy systems and it doesn’t require IT to deliver company data to the hosted model outside the firewall.

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