In my nearly decade and a half as an enterprise software industry analyst, I’ve seen and written about a number of universally admired star software providers. But every now and then I get to know solid, growing, and profitable software companies that, for whatever reason, are underappreciated and underreported on. Three-decade-old Bedford, Massachusetts–based Progress Software Corporation (NASDAQ: PRGS) with about 1,600 employees is one such Rodney Dangerfield—no respect at all. The company’s products are mission-critical and simply work in the background, and yet hardly anyone in the market knows and acknowledges it (while those that do know it, simply do not care enough to get excited).
Indeed, Progress’ flagship OpenEdge platform for the rapid development and deployment of business applications has more than 60,000 customers worldwide, both through direct sales and via 1,500 independent software vendor (ISV) partners (called Progress Application Partners), such as Infor, Epicor, QAD, Consona, proALPHA, TOTVS, Sage, Apprise, ASA Automotive Systems, etc. Even though the platform has a proprietary 4GL code called Advanced Business Language (ABL), OpenEdge-based applications, currently estimated at 5,000 solutions worldwide (in 180 countries), can be deployed and managed over many computer platforms as well as under a software-as-a-service (SaaS) model.
As its name suggests, standards-based and service-oriented architecture (SOA) openness has been the platform’s key tenet, in addition to modularity, reliability, and scalability. Initially referred to as Progress Database, OpenEdge has evolved to now provide a unified environment comprising development tools, application servers, application management tools, an embedded relational database, and the capability to connect and integrate with other applications and data sources (e.g., Oracle database, UNIX, Microsoft Windows and SQL Server, IBM WebSphere, etc.). The primary products included in this product set are OpenEdge Developers Studio, OpenEdge Relational Database Management System (RDBMS), OpenEdge Application Server, OpenEdge DataServers, OpenEdge Management, and OpenEdge Replication.
Where Is the Love (for Progress)?
Did I mention that Progress has a solid track record of growth and profitability, with annual revenues of over US$520 million? With such impressive figures, why are there lingering questions over whether ISVs are still satisfied developing and maintaining their enterprise applications on OpenEdge? Why are there still (often baseless) rumors that OpenEdge is an older legacy technology that may be technologically inferior to many competing solutions? And where do the questions about Progress’ corporate viability come from?
I can think of a few explanations. For one, Progress has traditionally not been a marketing-savvy company, which becomes obvious when you don’t have the cash, muscle, or sex and sizzle of Microsoft, Oracle, and IBM. SAP Sybase, Software AG, and TIBCO Software are also larger and more visible competitors. Even the more recent cloud platform-as-a-service (PaaS) newcomers such as salesforce.com and Google have further pushed Progress out of information technology (IT) news headlines. But this situation might be slowly changing. A few years back Progress hired a savvy New York City–based marketing agency that has since revamped the company’s image and corporate branding. I was pleasantly surprised to hear the company sponsoring the local Boston NPR stations and sports radio shows with its new tagline, “Business Making Progress.”
Moreover, OpenEdge has been plagued by Progress not having its own snazzy user interface (UI). Even in the cases where ISVs are using OpenEdge, for their business logic and database needs they have had to turn elsewhere—say, Microsoft’s more attractive .NET UI. Not only does this hinder Progress’ visibility in the market, but also there is a danger of an ISV switching to a more recognized platform with a familiar UI. Along similar lines, the lack of a native business intelligence (BI) framework has been another drag on the platform.
OpenEdge Partners: Should I Stay or Should I Go?
Progress’ application partners cover a broad range of markets and offer an extensive library of business applications. If an application partner succeeds in marketing its applications, it licenses Progress’ deployment products (allowing their installation and use), and Progress obtains follow-on revenue. On average, ISVs have been using OpenEdge for about 15 years, and eventually they have to decide whether to continue or not on the platform.
There have been some ISV defections to more attractive platforms in the past, but certainly not en masse. Plex Systems abandoned OpenEdge in the early 2000s as Progress was not ready at the time for SaaS deployments. Neither was Microsoft with its .NET Framework, but if the vendor was going to rewrite its entire business logic in a multitenant architecture, the much talked about .NET seemed a safer option back then. Along similar lines, former Frontstep/Symix, a progenitor of what is now Infor ERP SyteLine decided to go the .NET route at the same time. For its part, within the converged next-generation Epicor 9 enterprise resource planning (ERP) suite, Epicor has kept the ABL-based business logic (from its legacy ERP systems such as Vantage) intact (i.e., wrapped and exposed as Web Services), and its new business logic is in ABL, although all of the product’s UI, BI, database, and other tools are .NET-based.
But most of Progress’ ISV partners remain loyal and committed to the platform, because not only do the lower total cost of ownership (TCO) and maintenance burden resonate with them in this down economy (the aforementioned departures took place during much more upbeat economic times), but also because Progress has been able to foresee and adapt to the latest technology trends while preserving backward compatibility (i.e., the good old “green screens” and ASCII terminals are still supported side by side with, say, Web-based screens).
This ability to anticipate market trends and make new features possible, easy, and automatic is obvious upon analyzing OpenEdge’s historical landmarks. For instance, in 1993, version 7 of PROGRESS (the previous name for OpenEdge) introduced a graphical user interface (GUI), and in 1995, version 8 introduced the n-tier client/server architecture. Then, in 1998, version 9 embraced Web-enablement, and in 2004, OpenEdge 10 became SOA-compliant.
Progress has, through the release of a few service packs for OpenEdge 10, embarked on cloud-enabling its platform to extend its addressable market and technological life. To that end, OpenEdge’s business logic was rewritten in a multitenant architecture, but the database was still single-tenant. At the recently held Progress Revolution 2011 customer and partner conference in Boston, the just released OpenEdge 11 is being heralded as the very first process-enabled fully multitenant cloud development platform.
Progress has invested hefty research and development (R&D) dollars in trying to keep OpenEdge relevant, by introducing, for example, cloud or SaaS functionality and integration with recently acquired Savvion business process management (BPM) suite. To that end, proAlpha and QAD were featured at Progress Revolution 2011 as ERP vendors leveraging BPM and cloud-enabled OpenEdge (although with a .NET UI). OpenEdge 11 exhibits multitenant database and options for deployment across multiple clouds (although only for ABL customers at this stage). The platform’s support for Apple’s iPhone/iPad, Microsoft Silverlight, Ajax, Microsoft Sharepoint, and HTML5 renders the native UI shortcomings moot.
BPM- and Cloud-enabled OpenEdge
At Progress Revolution 2011, Progress announced its expanded cloud deployment environment, Progress Arcade, in which software companies and solution providers can create, stage, and test SaaS applications, and they can deploy and manage them in the cloud. The Progress Arcade portal provides software developers with easy-to-use tools and resources to stage and test applications, configure and demonstrate custom variants, and deploy production-ready applications with just a few clicks of the mouse.
The Arcade portal also provides community-based resources that enable developers to share best practices, try new products, and browse additional solutions from complementary solution providers. This initial deployment of the Progress Arcade portal is built using several solutions arising from both homegrown product development by Progress and partnership with industry-leading companies. The portal includes the Progress OpenEdge application development platform, the Sonic Enterprise Service Bus (ESB), Amazon Web Services (AWS), and the Rightscale cloud-computing management platform.
At Progress Revolution 2011 I was able to attend some breakout sessions that showed early integration work between Savvion and OpenEdge. Ken Wilner, VP of Engineering, claimed that BPM-enabling of OpenEdge has been possibly the most exciting undertaking during his 16 years at Progress Software.
Indeed, traditional menu-based enterprise applications are not conducive to BPM, as there is no explicit notion of business processes within the drop-down menus, keyboard shortcuts, and other navigational tools. In other words, processes are hard-coded into applications rather than being explicitly and visually modeled for users (who might even want to modify them on occasion). But business processes should be stated clearly and in detail—not buried within an application or within the organization’s tribal knowledge—and configurable. They also need insight and control; they need monitoring. Modern ERP systems should enable all of the following key BPM user roles:
- Business analyst, who does process modeling
- Application developer, who does process automation, development, and deployment
- Manager, who does process monitoring and improvement
- End user, who executes process steps
I concur with what Sandy Kemsley wrote about the session—that the integration between the Savvion BPM Studio and the OpenEdge Architect development environments is still not that tight at this stage, even though both studios are Eclipse-based. There are also two separate servers: Java-based BPM Server for executing processes and ABL-based OpenEdge Application Server for handling transactions. The session involved quite a bit of back-and-forth coding action by Wilner.
OpenEdge’s Niche Appeal
I imagine that future releases will bring more seamless integration; instead of layering BPM on top of a monolithic OpenEdge-based enterprise application, an integrated development environment (IDE) will include BPM as part of the toolkit. In addition to pulling the process out of the application and into a BPM system, OpenEdge applications should also integrate with other systems, such as customer relationship management (CRM) and accounting. To that end, there was a demo of OpenEdge exchanging extensible markup language (XML) files via Sonic with Savvion BPM to monitor the sales order process (status). In future releases, Savvion BPM Server will be Java Messaging Services (JMS)–compliant, so Sonic EBS will not necessarily be needed as a bridge to OpenEdge.
Given this economic milieu, OpenEdge’s low TCO, and the latest enhancements, I would give OpenEdge serious consideration if I were a start-up ISV looking to build an industry-specific ERP system for middle-market companies. Progress has kept entry costs, consisting primarily of the initial purchase of development licenses, low to encourage a wide variety of application partners to build applications. Needless to say, Progress now offers a subscription model alternative to the traditional perpetual license model for application partners who have chosen to enable their business applications on a SaaS platform.
Progress OpenEdge 11 offers a patent-pending multitenant database, options for deployment across multiple clouds, BPM-enabled development, and extended platform support for mobile devices. The release has multitenancy built into the database and physically separates data storage, providing greater security and control for cloud deployments. Additionally, this release provides complete platform diversity and a trusted partnership philosophy.
Progress’s executives went so far as to herald OpenEdge as the first BPM-enabled cloud PaaS, as an apparent challenge to Force.com and Heroku and their exuberant proponents at salesforce.com. Indeed, I cannot imagine a vendor that wants to develop, say, a slaughterhouse and meat-packing solution in emerging markets opting for Force.com or Heroku. But to be fair, I cannot really imagine companies developing Facebook- or Twitter-like social applications or interactive e-commerce Web stores using OpenEdge either.
Progress Beyond OpenEdge
To provide some historical context, for the last 15 years or so (but especially since the mid-2000s), Progress has expanded its business beyond OpenEdge and application development via a slew of acquisitions. Not only have these acquisitions given rise to add-on offerings to OpenEdge customers and partners, but also some of these acquired products—as best in their class of software—provided new growth engines for Progress.
All Progress product lines comply with open standards (to accommodate the most distributed and heterogeneous computing environments, from mainframes to SOA), deliver high levels of performance and scalability, and provide a lower TCO. These products are also used by the largest corporations in the world (whereas OpenEdge’s sweet spot is midsize companies and ISVs targeting those companies) and are often sold directly by Progress. Purchasers of Progress solutions and products through Progress’ direct sales force are generally either business managers or IT managers in corporations and government agencies.
Approximately half of Progress’ worldwide license revenue is realized through relationships with indirect channel partners, principally application partners and original equipment manufacturers (OEMs), and that revenue percentage used to be much higher. Application partners are ISVs that develop and market applications using Progress’ technology and resell these products in conjunction with sales of their own products that incorporate Progress technology (mainly OpenEdge). These application partners sell business applications in diverse industries such as manufacturing, distribution, financial services, retail, government, and health care.
For their part, OEMs are companies that embed Progress products into their own software products or devices. Progress operates in North America, Latin America, Europe, the Middle East, and Africa (EMEA), and the Asia/Pacific region through local subsidiaries as well as independent distributors (Progress uses international distributors in certain locations where it does not have a direct presence).
One line of acquisitions has resulted in Progress’ Enterprise Data Solutions business unit, which helps drive operational responsiveness of corporations by delivering the right information, in the right form, and at the right time. This business unit includes solutions and products that provide data management, data integration, replication, caching, access, and security capabilities spanning multiple data sources. Products in this business unit include Progress DataXtend, Progress DataDirect Connect, and Progress Shadow.
Enterprise Data Solutions has grown nicely (more than 20 percent annually) by enabling enterprises to address the following three important challenges:
- Access and integrate fragmented enterprise data and deliver actionable information in real time
- Leverage mainframe data and applications with different architectures
- Connect applications on various platforms to numerous data sources
Sonic, Actional, Apama, and Savvion: A Winning Team?
The most critical and successful of Progress Software’s acquired products—all are part of the Enterprise Business Solutions business unit, which has been the fastest growing at Progress of late, at a whopping 50 percent growth per annum—are as follows:
- The Progress Sonic messaging product set helps IT organizations achieve broad-scale interoperability of IT systems and the flexibility to adapt these distributed and heterogeneous systems to rapidly changing business needs. Sonic products include an enterprise messaging system and one of the leading ESBs. They simplify the integration and flexible reuse of diverse and often proprietary business systems by manipulating them as modular, standards-based services, which can be rapidly combined to serve enterprises in new ways. Sonic ESB provides reliable SOA integration that incorporates multiple sites or management domains. Unique clustering technology and continuous availability architecture (CAA) ensure scalable processing that never loses messages and never goes down. Through patent-pending CAA, Sonic products can deliver timely and continuous mission-critical business events. The primary products included in this product set are Sonic ESB, SonicMQ, Sonic BPEL Orchestration Server, and Sonic Workbench.
- The Progress Actional product set for SOA governance and management provides operational and business visibility, root cause analysis, policy-based security, and control of services in a heterogeneous environment. Actional can be used early in the life cycle to enable preproduction teams to address service quality before run time, and Actional’s comprehensive transaction traffic visibility and management tools (Interceptor, Analyzer, Server, and Database) can be efficiently applied to production applications. The primary products included in this product set are Actional Enterprise, Actional Diagnostics, and Actional Application Development.
- Progress Apama offers flexible and powerful complex event processing (CEP) capabilities and broad market connectivity. Apama is one of the leading platforms in capital markets for building high-frequency trading applications (during his keynote presentation at Progress Revolution 2011, Progress’ chief executive officer [CEO] Richard Reidy pointed out that 10 percent of the world’s currency is traded via Apama). Apama also gives firms the tools for creating, testing, and deploying unique strategies for low-latency, high-throughput applications, including algorithmic trading, market aggregation, smart order routing, market surveillance and monitoring, and real-time risk management. CEP helps businesses achieve operational responsiveness by uncovering events or event patterns in data streams that signal new opportunities, critical threats, or changing conditions or factors that impact the organization. With Apama, business events can be correlated and analyzed across multiple data streams in real time.
- Last but not least, Progress Savvion BusinessManager is one of the leading BPM software products with tools that provide an efficient way for customers to drive business process innovation. Savvion provides customers the tools to create and optimize process-driven solutions and flexible interfaces to manage daily work with real-time visibility into business processes. Via Savvion’s Process Analytics module Progress has also acquired analytics capabilities (including predictive BI) for its stack. The company is working on expanding those capabilities, but cannot share the details yet. Other Savvion components are Process Modeler, BPM Studio (Eclipse-based), BPM Server (J2EE-based), and BPM Portal.
Progress for Responsive Businesses
Progress’ vision is to be a global enterprise software infrastructure company that enables organizations to achieve higher levels of business performance by improving operational responsiveness. Progress defines operational responsiveness as the ability of business processes and systems to respond to changing business conditions and customer interactions as they occur (for its part, Gartner refers to it as intelligent business operations, whereas IDC refers to it as business navigation systems).
In his keynote presentation, Dr. John Bates, Chief Technology Officer (CTO) and EVP (the founder of Apama), cited the stat that 55 percent of businesses take more than a month to make a decision. But thriving businesses must be much more responsive and anticipate events rather than make decisions that are after the fact. Bates pointed out that companies that use classic BI tools are driving in the rearview mirror—using past data to try to predict the future. Instead, companies must become operationally responsive by reaching the following goals: continuously mitigate risks and threats (e.g., regulatory requirements), optimize operations dynamically, and capitalize on real-time revenue opportunities.
Accordingly, Progress has developed a responsive business prescription, which is a set of methods and tools for ensuring operational responsiveness. That prescription starts with continuous business visibility, so that companies can discern how their business is doing in real time (not when it is already too late). That allows the next step, which is to sense and respond to opportunities and threats. Finally, companies must continually improve their business processes based on this real-time sense and respond capably.
A key offering in this regard is the Progress Responsive Process Management (Progress RPM) suite that provides comprehensive visibility and insight into business systems and processes, event processing to respond to events that could affect performance, and BPM that enables companies to continually improve business processes and business performance without disruption to their ongoing operations or technology infrastructure. As stated earlier, Progress wants to maximize the benefits of operational responsiveness while minimizing IT complexity and TCO. To that end, the company also provides the aforementioned enterprise data solutions (for data access and integration) and application development platforms (for application development and management and SaaS enablement, which is basically OpenEdge).
The Progress RPM suite delivers immediate and actionable insight into business operations through the Progress Control Tower (PCT), a unified, interactive cockpit environment. PCT is an aggregated interactive business control panel that gives business users the tools needed to view what is happening within their business and the ability to assess how to improve it. This fully configurable, feature-rich, interactive framework delivers visibility into key performance indicators (KPIs) and the ability to raise alerts and act on them in real time.
Within PCT, users can also create and model business processes that can then be monitored and improved dynamically. In addition, PCT allows businesses to take full control of their applications, i.e., their business processes and metrics. The tool became generally available in May 2011 as part of the RPM Suite 2.0. It is based largely on technology from Savvion combined with graphical front-end visualization software from Tableau Software.
Fostering Responsive Supply Chains
Important offerings associated with the RPM suite are solution accelerators—pre-built, industry-specific, dynamic applications layered on the Progress RPM suite—developed specifically for selected industries. They allow business users to define their business processes based on best-in-class industry practices. While I’ve been aware of Progress’ expertise and accompanying solution accelerators for the financial industry and telecommunications, the novelty for me was the company’s nascent involvement in harnessing RPM to avoid blind spots in supply chains via responsive supply chain execution (SCE).
Bob Ferrari’s breakout session at Progress Revolution 2011 talked about modern supply chains being all about inter-company processes given that in the current economic dynamics, buyers are often in emerging markets, while suppliers are in low-cost markets. One constant is that one has to balance SCM performance in the following ways:
- Asset utilization—e.g., via higher inventory turns, less obsolete and slow-moving inventory, etc.
- Efficiency—e.g., driving costs down via integrated planning and execution, optimization, etc.
- Customer service and responsiveness—e.g., via shorter time-to-market (TTM), faster new product introduction (NPI), higher fill rates, etc.
Ferrari pointed out the ongoing SCM evolution, from the inward orientation within the four walls of an enterprise to the outside-in orientation in this networked era of connected and informed enterprises. Astute SCM participants are moving from historical analysis to more predictive analysis in near real time for the purpose of forward-looking decision-making. Predictive BI is becoming critical in the realm of SCM, as it is pervasive in inventory optimization, demand sensing, intelligent search (both structured and unstructured data), sense and respond, and other required capabilities. Cloud, virtual, and in-memory predictive BI solutions have been helping contemporary supply chains with managing their demand, managing push-pull networks, responding to events, orchestrating processes, and so on. Other SCM trends are the harnessing of composite, social, and mobile applications.
While Progress is currently not the master of all of the aforementioned SCM trends and capabilities, certainly its RPM suite can help with the sense-and-respond (visibility) and process orchestration issues. The very first generally available accelerator for SCM is the just released Progress Time-in-Transit solution for immediate re-sequencing of extended supply chains and cycle time reduction. The Time-in-Transit solution provides supply chain managers with real-time visibility into their operations to help them anticipate disruptions, monitor shipping schedules, and mitigate risk. I believe that the Order Management Stability solution accelerator for telecommunications service providers will be retrofitted as the next SCM accelerator for field service management of service level agreements (SLAs).
Progress RPM: A Prospective Championship Line-up?
Now that RPM has been in the market for more than a year, is it viewed as a real solution, or do folks still see the individual constituent product lines—Sonic, Apama, Actional, Savvion (SAAS)—as more relevant? Certainly, Savvion BPM and Apama CEP together are the key parts of RPM: the BPM systems allow for agile modeling, deployment, and monitoring/improvement of processes, while CEP correlates a huge flow of external events to determine what should impact the processes on the fly. Actional’s business transaction management (BTM) and related analytics are also critical, as are Sonic’s messaging and “plumbing” capabilities.
Many RPM case studies are former users of the individual SAAS products that have over time expanded into using other products. Most likely the idea for RPM was born this way, by trying to accommodate some major customers’ needs. While Apama and Savvion can be seen as the top of their respective fields, Progress RPM has the potential to become more than the sum of its parts. Is it the Miami Heat of its software space? In other words, it may take some time for these products to gel into a unified environment and come up with a winning play.
I imagine that Progress is trying to push the RPM technology through to its OpenEdge customer base. However, I am skeptical of this strategy given that the OpenEdge business is generally used by smaller, less technologically oriented companies that may not be ready to deploy such a sophisticated solution (CEP, BTM, etc.). It is more likely to see some success in interesting the OpenEdge user base with Savvion, Sonic, and perhaps PCT.
But what matters here is that Progress is not necessarily dependent on RPM’s success within the OpenEdge community. Again, RPM and its individual components represent healthy revenue streams on their own and attract renowned consulting and system integrator (SI) partners such as Virtusa Corporation and Tata Consultancy Services. In other words, Progress has struck a healthy balance of recurring and new revenue streams, as well as achieving a healthy diversification.
Bob Ferrari. “The Progress Software Revolution Conference and Predictive Analytics.” September 22, 2011.
Sandy Kemsley. “Progress Revolution Kicks Off: @RReidy and @DrJohnBates Keynotes.” September 20, 2011.
Progress Software. Progress Software History.
TEC on Progress Actional. “Taming the SOA Beast.” September 23, 2008.
TEC on Progress Apama. “Processing Complex Events (During These, oh well, Complex Times).” April 28, 2009.
TEC on Progress Savvion Business Manager. “Progress Software Revs Up to Higher RPM via Savvion.” June 23, 2010.
TEC. “A Partner-friendly Platform Provider Discusses Market Trends,” June 2, 2008. [Requires registration.]