While the choice of dance partner was a little surprising, the desire for a liquidity event in the Lombardi management team was there to see long ago. They touted an IPO around this time, but in the current market that was always going to be difficult. My guess, and it is a guess, is that the VC funders wanted to cash out, and they pushed for a trade sale. And given we don’t know the price paid (although it may come out over time), and then discount the several rounds of VC funding … the true price will be hard to tell.
Looking at the other potential suitors – I don’t think Oracle could swallow another one so soon; Microsoft is not into Java based vendors; Adobe, have their own play and it would be hard to see the synergies; SAP … hmmn, if I had to pick one that would have been it. Of course, IBM would have been high on the list also.
From Lombardi’s point of view, as others have pointed out, IBM has the broad based clientele. This will give them room to grow and leverage an existing, widespread sales force that is tightly integrated with the market place. I am sure there will be frustrations along the way, but the methods and techniques developed by the Lombardi team are exemplars to the industry.
As I have said to many other vendors, when people buy BPM products, they buy the promise of success. And I am sure Lombardi’s success in the market is as much down to that aspect as it is their leading technology stack. They help their customers understand how they will succeed in meeting their business objectives (rather than touting the beauty of their technology stack).
For IBM, Lombardi brings that cachet in the market place – in my opinion one of the real leaders. But digesting the new acquisition and building new value will be challenging (and for Lombardi, being digested will not necessarily be the easiest of experiences). But I am not sure they can continue to claim that the Human/Content/Integration-centric BPM products belong in separate buckets – in the end, they are all about people and systems working more effectively together. I agree with folks like Neil Ward-Dutton that there is a high degree of overlap at the technology level. Maintaining a reasonable segmentation of products against perceived client needs always starts to look shaky no matter which vendor you look at.
For the customers – well those that don’t like IBM will continue to not like IBM and will wonder why they went this way. But to a large extent, they will be locked in. Others will rejoice in the fact that two existing suppliers now become one. On balance, I don’t see a massive decamp.
For the competitive BPM vendors – I should imagine it is champagne all around. On the one hand it proves their value (once the price becomes known). On the other, Lombardi getting swallowed up just removes one difficult competitor. Dealing with them as part of the IBM value proposition is probably easier than dealing with them as independents.
Other major technology vendors will sit up and take notice and may start looking for complementary acquisition targets. My guess is that Microsoft and SAP will perhaps buy someone that seems to fit. I think the Microsoft SharePoint value proposition is a little suspect (unless they bolt in a robust process platform … because Windows Workflow Foundation just doesn’t cut it – see my white paper – SharePoint as a Strategic Weapon – available free on P5 of the White Papers section of the BPM Focus web site). SAP has struggled to communicate a viable product story for anyone other than existing SAP application users.
For the Lombardi team – there will inevitably be a certain degree of fragmentation. Some will run for the hills, and others will stay. I cant see Phil Gilbert heading for the beach any time soon. Anyway, I am sure that the odd glass of Champagne (or in Phil’s case, excellent Pinot Noir) will be raised to toast the new home.