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BPM market matures.

A significant merger can mean that a particular IT market is maturing. So Tibco's [pounds sterling]128 million takeover of Staffware could one day be seen as the moment the emerging business process management (BPM) sector crossed over into the more mainstream software market.

The deal is surprising for two main reasons. First, because Tibco's offer - representing a 40% premium to Staffware's average share price of the month before the deal was announced - is so generous. And second, because the merger combines companies that at one time came from the mutually exclusive sectors of enterprise application integration (Tibco) and document-centric workflow (Staffware). But while the companies may have had different starting points, both, even before the merger, have been heading in the same direction - towards the goal of business process orchestration.

This suggests the two companies' respective product sets will prove complementary. Certainly, Tibco's BPM specialty is in high-volume transaction environments where straight-through processing, with no need for manual intervention, is the aim, while Staffware's background in workflow technologies means that its BPM products support business processes that include a mix of human and machine-led activities.

The deal comes at a critical time for Tibco. It might have the biggest share of the EAI market in revenue terms, but it has still suffered a sales decline in the last few years. Its 2003 revenues of $264.2 million were well down on the company's record annual turnover of $322 million, which it reported in 2001. It hopes that Staffware will strengthen its BPM technology and open up new markets in Europe and Asia. Staffware, for its part, can expand into the US without having to risk organic expansion or acquisitions of its own.

Meanwhile, Compuware, the software development tools company, has acquired Changepoint, a project performance management software supplier, for $100 million in cash.

For Compuware, which has been on the acquisition trail in 2004, the Changepoint deal positions it to meet growing demand for what is increasingly termed 'IT governance'. Changepoint, which was founded in 1992, originally billed itself as a supplier of professional services automation software to project-driven professionals such as consultants, lawyers and architects, but that scope has more recently been narrowed to a focus on IT organisations.

Changepoint expects to report $30 million in revenue in its current financial year. Its major customers include Siemens, Dell and MasterCard. All of its 190 employees will join Compuware to form a new business unit, including president and CEO Gerry Smith, who will become an executive vice president of Compuware.
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Title Annotation:business process management, acquisitions
Publication:Information Age (London, UK)
Geographic Code:1USA
Date:Jun 10, 2004
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