Is BPM Moving to the Cloud?

By David A. Kelly and Heather Ashton, Upside Research

Recently, we discussed the crowded marketplace for online backup and recovery services, and how many companies are taking advantage of the flexibility of the cloud to achieve enterprise-strength back-up services at SMB prices. Today, it is increasingly apparent, that the Cloud is relevant to most of the enterprise software categories that exist. BPM is no exception, and Appian Software is trying to stake out a big spot in this nascent space.

According to a press release by Appian on June 6th, Appian is leading the pack of BPM vendors with its Appian Cloud offering, claiming the most customers and technology capabilities. And while Upside Research isn’t ready to crown them king yet, we do think that Appian is taking BPM in the right direction with thoughtful approaches to enterprise BPM requirements.

In the most recent quarter of reporting, Appian saw new software orders for Cloud deployment tracking to 50% of revenues, an impressive result for a service that was initially launched in 2007 to skepticism among industry analysts. In 2009, SaaS versions of enterprise software became popular as many IT departments faced across-the-board budget cuts due to the continuing recession. With its affordable, low-risk promise, the SaaS model that Appian offered was suddenly more tantalizing to CIOs faced with difficult budget limits and an ever-increasing project load.

The Cloud continues to appeal to IT managers, due to its flexibility, low resource requirements, and the added flexibility it provides companies. Some companies utilize the benefits of an outsourced model, including faster deployment, lower maintenance, and no up-front investment. Other companies see the Cloud option for a solution like Appian BPM as excellent fodder for a pilot program, with the goal of bringing the project in-house after a successful proof-of-concept.

While Appian may have been an early mover in the BPM in the Cloud space, other vendors have quickly followed suit. Today, customers can leverage a SaaS model for a slew of BPM solutions, including TIBCO, Lombardi (IBM), and Savvion (Progress). All tout the flexibility of the cloud, and the low entry point/fast ROI model. Critics argue that moving a massive enterprise solution like BPM to the cloud does not necessarily make implementing the technology any easier from a business perspective – processes still must be modeled, business behaviors captured and then potentially changed. None of these are easy tasks that the Cloud can magically orchestrate. The question remains, does BPM belong in the Cloud?

Appian believes so, and is betting on a strong combination of Cloud, Social Media and Mobile Applications to bring BPM to the next level for the enterprise. The company believes that BPM needs to expand with participation across the organization, throughout the supply chain, and with the customer, and Mobile and Cloud components will support this transformation.

Upside Research agrees that in order for BPM to become more main stream across enterprises, it will need to incorporate technologies like mobile computing, social networking, and Cloud access as ways to extend BPM beyond the four walls and throughout the larger value chain in which companies operate. From Upside Research’s perspective, Appian is one BPM vendor that’s definitely on the right track. We believe their solution addresses important and growing needs for social and enterprise-oriented BPM deployments and think that there’s a good chance that they will continue to be a leader in this space.