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In a recent trade article, Appian was identified as a "unicorn" -- the VC idiom for start-ups with valuations greater than $1 Billion. Is this status a bellwether for the BPM sector or circumstances unique to Appian?

Thursday, February 11 2016, 09:50 AM
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  • Accepted Answer

    Thursday, February 11 2016, 10:10 AM - #Permalink
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    Reading the article one wouldn't even know that Appian is a BPM company. It is interesting how the company is described in the article, viz. "For reference, Appian offers corporate customers a simplified, user-friendly platform to build custom software."

    This reflects my belief that the BPM market is going to split into two. On one side you will have Appian and Appian-like companies which are going to unabashedly go in the direction of being App Development platforms. Their competition is going to be other RAD (Rapid Application Development) platforms not necessarily just BPM platforms.

    On the other side you will have zero-code BPM approaches geared directly towards business users.

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  • Accepted Answer

    Thursday, February 11 2016, 10:23 AM - #Permalink
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    This article comes to mind :https://m.signalvnoise.com/reconsider-41adf356857f#.k4p0d6jmu (37signals)

    Also, just wrote about business process applications - Ranjit proposes it is splitting into appdev and zero code.

    I think the split is:

    1. bpm largely as we know it, but evolving with various technology waves and modes of interaction

    2. bpm applications / solutions

    3. bpm-based app-dev a la Appian.

    I don't know that zero code is a separate market from app-dev, rather than just one end of the spectrum of appdev tools.

     

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    • Ranjit Notani
      more than a month ago
      Regarding your point that zero-code is one end of the appdev spectrum, my thoughts are as follows: Since BPM has typically involved coding, the zero-code nomenclature leads one to view zero-code as being on one end of the appdev spectrum.

      This is like viewing Spreadsheets as being on one-end of the spectrum of declarative computational languages. This is technically true, but misses the point. Spreadsheets, by virtue of their targeting at regular business users spawned a gigantic and distinct market from that of other declarative computational languages which were geared towards developers.

      So, when I suggest that 'Zero-code BPM' will be a distinct market, the analogy of the Spreadsheet (and its direct use by business users) is what I have in mind.
    • Scott Francis
      more than a month ago
      It turns out appdev has typically involved coding. So has BPM. but 4GL approaches and BPM vendors have been pitching zero code for a long time :)
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  • Accepted Answer

    Thursday, February 11 2016, 10:45 AM - #Permalink
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    1. As pointed out, Appian is not really a unicorn.
    2. The appellation is media hype (tripe?) for purposes of writing the article and generating buzz.
    3. What Scott said.

    - out

    • Scott Francis
      more than a month ago
      yeah... kind of thought you had to actually RAISE money at a $1B valuation to get labeled unicorn. kids these days.
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  • Accepted Answer

    Thursday, February 11 2016, 10:46 AM - #Permalink
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    No single vendor "owns" BPM.

    BPM does not even own "Business Process Management"

    Managing a business is not just about "managing processes".

    Valuations can change overnight - take a look at LinkedIN stock pricess.

    When any company confuses its customer base, it may be only a few steps away from "tanking"

    • Patrick Lujan
      more than a month ago
      I liken that last statement to Pega pursuing the low end. It went nowhere. Appian and the app dev stuff, "we'll see."
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  • Accepted Answer

    Thursday, February 11 2016, 10:52 AM - #Permalink
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    This is yet another sign of the potential power of BPM (discipline, tools and practice) – it can address concerns of various enterprise stakeholders, for example, business (we want “managing by processes”), IT (we want “RAD”), EA (we want “process-centric solutions”), etc.

    Thanks,
    AS

    • Patrick Lujan
      more than a month ago
      Like anything else, always comes down to execution Doc. Always.
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  • Accepted Answer

    Thursday, February 11 2016, 11:07 AM - #Permalink
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    It's a significant event, purely for marketing purposes. Now, the BPMS-as-biz-app-dev-platform appears as a viable business to investors. And it can mean a lot for the whole BPMS market. In today's shallow, shifting markets, more eyeballs = more cash = more opportunities to push BPM at scale.

    Other than that, no customer cares about how the BPMS market is split.

    And yeah, Appian deserves the recognition as they have probably the most interesting execution among the large BPMS players.

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  • Accepted Answer

    Thursday, February 11 2016, 11:10 AM - #Permalink
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    “We're not interested in an acquisitions ... we just don't engage" says the CEO in an article discussing their $1Bn valuation. Yea right.

    In a sense Appian’s fortunes are a good barometer of the BPM market as a whole. While no doubt a strong business their revenue is still only around $100M and has grown slowly.

    Their success if anything was down to some clever marketing in the 00’s, especially around mobile and social BPM. This resonated with the analysts (shiny new toy) but no one, rightly IMO really talks social and mobile BPM about any more.

    I expect Salesforce to make an acquisition in the BPM space and wouldn't be surprised if it was Appian.

    • Scott Francis
      more than a month ago
      how fast/slow do you think it has grown? hard to get good data on this (well, maybe it isn't hard, maybe i'm too lazy and I should pay Dun & Bradstreet or something !)

      And what counts as slow in your view ? or fast?
    • Peter Whibley
      more than a month ago
      About 5 to 10% per year. About the same as the overall BPM market.
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  • Accepted Answer

    Thursday, February 11 2016, 11:55 AM - #Permalink
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    6 votes

    Is the BPM industry a "unicorn"? As I've argued before, analysts, and even vendors, have consistently underrated the capabilities and underestimated the market for this technology. No matter what you call it—"BPM", "low-code/no-code application development", or "chocolate pudding"—we are actually talking about completely changing how organizations build and deliver their products and services.

    As for Appian in particular, well... Good for them. It's a decent product and I imagine those folks are all nice to their moms and live spiritual and deeply meaningful lives. But if you've been around the block a few times, you've seen everything. Hell, I personally worked at both Lehman Brothers and Washington Mutual, two of the most successful businesses—and most spectacular disasters—in recent memory. Here today, gone tomorrow. (On the other hand, I strongly suspect that some of the executives at those firms were not, in fact, nice to their moms, so maybe it was just karma.)

    I'm gonna just go ahead and put this out there: if I own something you want to buy for a billion dollars, please call me right away. It's yours.

    • Patrick Lujan
      more than a month ago
      You worked at WAMU? Dood, we gotta talk. ;)
    • E Scott Menter
      more than a month ago
      I don't have your money.
    • Scott Francis
      more than a month ago
      LOL
    • John Morris
      more than a month ago
      I once tried to sell BPM to WAMU . . .
    • Emiel Kelly
      more than a month ago
      And I assume they adopted it completely, John?
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  • Accepted Answer

    Thursday, February 11 2016, 03:10 PM - #Permalink
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    5 votes

    Being valued is not the same as adding value.

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  • Accepted Answer

    Thursday, February 11 2016, 03:28 PM - #Permalink
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    3 votes

    Valued at 1bn with sales.of 100m hmm that's a bubble ...grab it guys it is not sustainable... and so in my view the analogy with BPM does not makes sense. Having said that I do believe that it is the BPM thinking supported by next generation adaptive low/no code platform software will truly disruptive the current complex and thus expensive enterprise software offerings. Does Appian fit this paradigm shift I do not know; if they do then maybe hang in there ....time will tell.

    • Scott Francis
      more than a month ago
      valued is just their own internal analysis, not the same as someone writing a check at that valuation. (But maybe someone was willing to, just not validated without money changing hands).
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  • Accepted Answer

    Thursday, February 11 2016, 09:07 PM - #Permalink
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    3 votes

    Regardless of the increasing power of BPM, I'm still sceptical of valuations for technology plays. A tier-2 technology-based vendor like Progress (current market cap > $ 1.1 B USD, revenue 3X Appian) has a huge and successful channel making it much more than a technology play (and Progress has the whole RAD thing going too). Pure-plays are a hard go. The gap between technology and business value is very wide, especially if most of the time you're selling to developers or architects.

    So we get back to market strategies where technology is sold to VARs and BPO providers and Wipro (market cap $ 27 B USD, user of Appian, IBM and Pega BPM suites) generates the valuation because of domain knowledge and market power - and a willingness to take responsibility for outcomes.

    Which observation leaves us really nowhere . . . how does one fund or make a business out of one of the most important business-oriented technologies of the future?

    • David Chassels
      more than a month ago
      Love your final "observation" ....I am sure many of us agree but is the message widespread enough to add that value...and hit those that resist......? We must focus on "how" not the marketing driven what..?
    • Scott Francis
      more than a month ago
      the progress example is interesting - they divested their bpm product to another company a few years ago. they used to be just shy of $1B in revenue before their divestitures.

      Regarding BPM - how does one fund or make a business out of it? I guess I'd say there are lots of good businesses that aren't unicorns. While BPM may be one of the most important business oriented technologies, it isn't the easiest one to adopt and disseminate in an organization. I'd call it a long hard slog to build a business around BPM and do it well. That's what seems to be working for Appian, and it is how we've build the business I'm a part of at BP3 - and seems to be how each of the successful BPM vendors has done it. Hard work, longer time frames, lots of proof with customers. Because while it may be an important technology and approach, it isn't a silver bullet.
    • John Morris
      more than a month ago
      Savvion lasted at Progress for just 3 years before being spun off.

      And so to the message of a "long, hard slog" . . . which is kind of an "anti-Unicorn" message.

      And as always, there's an interesting sales angle to this.

      Sales metrics are invariably driven by hitting a target -- and a good thing too. Why is the rep in sales unless they like hitting targets?

      But organizationally typical sales metrics generate a *new technology sales* problem. Hitting targets by definition means selling the commodity end of your portfolio - where the big money is.

      So pioneering new products, on which your survival depends, get short-changed in sales priorities. POCs and initial roll-outs don't generate the numbers that send you to Club.

      So the patient nurturing and bold strokes required for selling to innovators and early adopters aren't well supported in traditional sales models.

      There are all sorts of sales hacks to get around this -- "baskets" (you MUST sell 10% "new" products/services) or "overlays" (you MUST work with your new technology sales specialist overlay) or "separate VPs" (who dat?). And in every case all the phenomenon which Clayton Christensen writes about comes in to play.

      This is the sales governance question and, per Mr. Francis, slow and steady is what is required. There's opportunity for the organization that gets it right.
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  • Accepted Answer

    Ian Gotts
    Ian Gotts
    Offline
    Friday, February 12 2016, 01:11 AM - #Permalink
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    2 votes

    I thought I would try an add a modicum of science to the discussion, bearing in mind "unicorn valuations" are not based on any form of maths, economics or accounting. To believe that BPM is on fire because Appian may be worth $1bn (prior to Monday's crash) is chasing rainbows. So I submit this image as a discussion point.

    The science behind why unicorns fart rainbows

    • Bogdan Nafornita
      more than a month ago
      Appian being worth 1bn is simply applying a stretched industry-multiple to Appian's revenues. Nothing else.

      Just as all those "liquidity events" bump up valuations but are full of protective clauses behind the back... valuation itself doesn't mean anything unless there is an actual ownership change... it's just marketing (and mostly for the purpose of recruiting high-flying talent).

      But Appian doing +100m USD a year on cloud BPM alone (or anything close to that)... that's relatively significant.
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