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Progress Software: its challenges

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Comment Historically, Progress Software built its business around its 4GL (which it now refers to as an ABL—Advanced Business Language) and its database. And the company succeeded by focusing on the mid-market and a channel model for reaching that market. In other words, it was a company that targeted small and medium-sized businesses and, at the high end, the small enterprise market. However, that is changing and the company faces transitioning issues.

To a certain extent, of course, Progress has always dealt with large and very large enterprises but these were typically department-level implementations. Even the company's expansion with Sonic hasn't fundamentally altered its market penetration. However, what is happening with Progress Apama and will happen with Progress DataXtend will necessarily cause change.

Progress Apama is the company's event processing product that it acquired when it bought Apama last year. It is worth summarising what has happened with the product since then: first, revenues have gone up more than six-fold, so that it is now well into eight figures (dollars) per annum—which probably makes Progress the leader in this market; and secondly, it has expanded in capability with more complex event processing functionality and less emphasis just on high performance. Further, while the company plans to take Apama to its partner base next year, to this point sales have been mostly based on a direct sales model.

To date, sales have been primarily to banks and other companies in financial services and these are 'bet your business' applications being implemented. Sales into government, the military, telecommunications companies, utilities, transportation and the like, will also address major enterprises and this will require a continued expansion of a direct channel as well as partner-based channels for smaller organisations.

The same is likely to also prove true for DataXtend. With recent acquisitions this is growing into a potentially serious player in the data integration market, especially for real-time integration. Thus, for example, it should prove to be a competitor to GoldenGate for zero downtime migrations, amongst other applications. Moreover, the platform is likely to continue to grow: for example, the company will either acquire or partner for data quality tools.

The market for broad capability data integration tools is, again, primarily the enterprise market and, while you can leverage systems integrators to a certain extent, you really need a direct sales model to really capitalise at this level.

The question therefore becomes, with respect to both of these products, whether Progress can make the necessary shift towards becoming a company that places as much emphasis on the enterprise and direct sales as it has historically done in the SME market and with channels. And, at the same time, it must not lose any of its focus on the latter. Progress looks to have a real opportunity for dynamic growth over the next few years but it will require an evolution of the company to achieve that: it remains to be seen if the company is up to the challenge.

Copyright © 2006, IT-Analysis.com

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