Business process management suites (BPMS) will be among the fastest growing software markets through 2011, exceeding $1 billion in 2007 in software revenues and will reach $2.6 billion by 2011, according to a study by Gartner. The increasing importance of the customer loyalty and the rise of the Internet is changing the dynamics of business, and will lead to a renewed interest in the management of business process as enterprises look to use software to better coordinate their processes. Gartner predicts that BPMS software will exhibit a compound annual growth rate of 24 percent in the period from 2006 to 2011.
BPM has evolved from former process management theories and practices like quality management to become a management discipline that views business processes as assets that can be designed, reused and exploited in order to improve business agility and operational performance. "The focus on operational excellence is accelerating," says Janelle Hill, a research vice-president at Gartner. A survey conducted in Q3 2006 by Gartner and Forbes showed that 45 percent of business executives have an expectation that CIOs will take more responsibility for managing business process change over the next five years. "BPM wins the triple crown of saving money, saving time, and adding value," Hill says.
Today's more collaborative, iterative style of software development requires a unified environment, provided by BPMS, according to the study. Market requirements are shifting from pure-play business process management products that address human-to-human or system-to-system workflow to BPMS that support process management practices in a more consistent and unified manner across the entire process life cycle. "The technology helps business leaders to work together more collaboratively and seamlessly by sharing common tools and artifacts," Hill says.
Gartner expects demand for BPMS to accelerate sharply through 2007 as companies combine spending on SOA initiatives with BPM programs. "Because BPM is a major reason for turning to SOA, companies are likely to target some of their SOA software spending to BPMS," says Michelle Cantara, a research vice president at Gartner. Gartner estimates that the market will reach its peak in 2008, with an increase of 26 percent from 2007.
"This market continues to attract new participants, both small and large, with the major middleware and infrastructure vendors recently entering. Furthermore, the barriers to entry will continue to get higher, as buyers expect strong capabilities to support their business process platform model," Cantara says. In previous years, smaller BPM pure-play vendors could succeed purely based on their human workflow capabilities and other unique features and how effectively these addressed specific vertical industry business practices. "As larger vendors with greater resources enter, it will be increasingly difficult for newer and smaller entrants."
By 2009, Gartner predicts that four or more BPMS vendors will be acquired by platform or application vendors and will cease to be players in the BPMS market. Hill says that 2007 "represents a turning point in terms of growth acceleration in the market for BPMS. We will see some vendors, such as IBM, SAP and Oracle making their intentions very clear and aggressively trying to mature their BPMS offerings. Others, such as Microsoft and CA, will lag behind pursuing the BPMS market as a complementary market to their middleware offerings, particularly in the context of SOA initiatives."
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