Tibco’s BPM Buy

Tibco bought Staffware recently for $217 million. Phil Wainewright provides the context:

So what does Tibco gain from the acquisition? There are several elements that make this look like a good deal:

  • Growth: Tibco’s sales fell last year, Staffware’s grew. In addition, each company’s customers are likely prospects for the other’s products. As discussed above, there are geographic synergies as well as product synergies to exploit.

  • Momentum: Adding Staffware’s revenues will keep Tibco well ahead of its closest EAI rivals, webMethods and SeeBeyond, in the race to achieve 500lb-gorilla status. Tibco executives have made no secret of their desire to become a billion-dollar company. Being seen to lead the sector with a clear strategic direction is an essential ingredient in fulfilling that dream.

  • BPM credibility: When Loosely Coupled looked at EAI vendor strategies last year in Integration: Free at last?, it was evident that Tibco and its rivals saw business process management as their main opportunity for value-add in the future. Acquiring an acknowledged sector leader like Staffware brings Tibco instant BPM credibility that it previously lacked.

    But has Tibco chosen the right BPM specialist to link up with? Staffware’s workflow roots and veteran status lead many of its younger rivals to characterize it as something of a dinosaur, lumbered with the baggage of having had to engineer enterprise-class solutions before the advent of standards-based messaging and transformation technologies. That’s mostly unfair to a company that’s succeeded in keeping its product fresh through two decades of rapid innovation and change in enterprise application integration. But there can’t help but be an element of truth in the caricature, given the company’s background. That Staffware made the ability to define “skinny processes” a feature of its latest product release does suggest by implication that its default processes have tended to be more fat than thin.

    On the whole, Tibco’s acquisition of Staffware should play well with both companies’ enterprise customer base, and thus with investors. It may even make Tibco an interesting acquisition target for a company like IBM or Oracle. But it may leave the way open for a rival to make a smarter acquisition by buying into the disruptive-technology end of the BPM market.

  • Published by

    Rajesh Jain

    An Entrepreneur based in Mumbai, India.