Enterprise Initiatives

The supply and demand for SOA and BPM tools and implementors is way out of wack. On the tool side there are way too many vendors and products and you will continue to see the big guys like IBM, BEA, Oracle, HP, and Microsoft go shopping. The implementor side has a different twist to it. There are many niche players who have staffs that range from 100 to 1000 people. These companies have been implementing SOA and BPM before they became the hottest topic since Paris Hilton's jail sentence. Now that the demand is so high, they are having problems staffing up.

I work at a medium sized company. We have been looking for a partner to help model our current and future state processes for a few areas in our business. The big guys like Accenture, IBM, and Bearing Point turned us down because the contract was too small. The medium sized companies are turning us down because they are out of resources. We had a bad experience with a boutique vendor on our first business process assessment so we are staying away from the small guys.

Our SOA partners are extremely busy and in high demand. We have over 20 projects that we need help with and we want to work on three or four of them at a time. They will soon be out of resources. So where am I going with this?

Everyone already knows that there will be mass consolidation as BPM and SOA pure players get gobbled up by the the billion dollar companies. The pure players are having problems competing against the stack players because more companies are using BPM and SOA together. What is not being talked about is the consolidation of the implementors. Accenture, Bearing Point, and others are going to start buying many of these niche players so they can go after the mid market dollars. The niche players are going to need to expand at rates that they can't manage. I am not a wall street analyst but something tells me that there is a lot of money to be made if you own stock in the right niche player.

Another trend that I am seeing is private equity companies buying up successful companies with plenty of cash flow. Look at Doubleclick. Hellman and Friedman bought them in July '05 and sold them for more then a billion in profits in April of '07. I can see this trend happening in the SOA and BPM consulting space. Private equity firms like H&F can buy these companies at a decent price, cut out the fat, stream line the operations, and flip them to the big industry leaders as they start competing for these types of companies. Look at the crazy shopping sprees that Google, Yahoo, and Microsoft are in the midst of. They are overpaying on many Web 2.0 startups just to beat their competitors to the punch. I believe that this same trend might happen in the next year or two in the SOA/BPM implementation space.

I would like to hear from those of you that work as consultants in BPM and SOA. Am I on to something or am I way off track?