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Posted by Clay Richardson on July 14, 2009
By Clay Richardson, Ken Vollmer, and Connie Moore
Only two years after acquiring webMethods, Software AG shakes up the BPM world once again with its announcement to acquire leading process modeling vendor IDS Scheer. Since the webMethods acquisition, Software AG has continued to push the envelope on combining solid human-centric and integration-centric capabilities under a single vendor roof. With the IDS Scheer acquisition, Software AG is sending an indisputable and clear message to the market: "We are a major BPM player, hear us roar!" Or should it be, "hear us bark?"
In many ways IDS Scheer has more brand cachet in business process improvement circles than Software AG, leading us to wonder: Is the tail wagging the dog on this deal? Is Software AG buying IDS Scheer, or is IDS Scheer really buying Software AG? The truth is that Software AG is buying a global brand that has the potential to completely remake Software AG into a process improvement powerhouse.
On the surface, Software AG has positioned this acquisition as a vehicle for opening up new global markets they are trying to further penetrate - such as Latin America and Asia Pacific. Specifically, they expect to expand their consulting footprints in these markets in order to support increased license sales. No doubt, Latin America is poised for growth and Software AG has timed this acquisition to capitalize on projected growth in Brazil and Venezuela, which continue to see single and double digit increases in technology spend.
Looking beyond surface observations, we see three key reasons why this acquisition makes sense and why it will play well in the market place:
So, what's it mean?
Our Point Of View
Overall, Forrester expects this to be a successful deal for both Software AG and IDS Scheer customers, with minimal disruption and adverse impact on combined customer portfolios. Software AG customers will benefit from an extensive process analysis modeling platform and professional services organization that can support multi-million dollar, multi-year BPM initiatives; and IDS Scheer customers will benefit from a robust execution engine that can support human-centric and integration-centric business processes.
The big loser is SAP - and to a lesser extent Oracle. Both use IDS Scheer to augment their internal process modeling capability. Now they will have to rely on a competitor for this functionality.
In the end, it really doesn't matter if the tail is wagging the dog - all that matters is whether the dog's bite matches its bark. And in this case, the combined Software AG / IDS Scheer offering seems to be a good match.
We want to hear from you. Let us know what you think of the IDS Scheer acquisition. Do you think this acquisition will have a net positive impact on the BPM market? Do you think the combined technology portfolios of Software AG and IDS Scheer are complimentary and will improve their customers’ process improvement efforts? How do you think SAP will respond? Post your thoughts in the comment section or feel free to shoot us a quick e-mail at firstname.lastname@example.org or email@example.com.
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