Deal Radar revisits open source with Grenoble-based BonitaSoft. The company creates a functional open source business process management (BPM) solution that designs, simulates, and automates processes. The aim is to allow businesses to turn their processes into business applications. Bonita Open Solution is designed to be comprehensive and scalable BPM solution that includes three main components: a process studio, an execution engine, and a Web user experience.
BonitaSoft is built around the open source Bonita project, which Miguel-Valdes Faura first developed in 2001 at the French National Institute for Research in Computer Science and Control (INRIA). His vision was for BPM to become mainstream, an essential part of every enterprise’s IT portfolio. After working at INRIA, Miguel was hired by Bull, a French software services and systems provider, to help develop business process applications. He eventually spun off to develop his own specialized BPM offering, founding BonitaSoft in June 2009.
Interest in business process improvement is extraordinarily high across many industries but the BPM software market is dominated by heavyweight, proprietary vendors (such as Oracle, IBM, Tibco, Software AG, and Pegasystems) supplying their technologies to large accounts through lengthy, complex, expensive business and information systems re-engineering projects. BonitaSoft believes that in this highly competitive and consolidated market, there is an enormous untapped opportunity for technology suite providers that specialize in BPM and seek to make it mainstream.
For a top-down perspective on the market, Gartner’s October 2010 BPM report says that “even during the 2009 economic crisis, BPM initiatives (and BPMS products) continued to receive funding. Gartner estimates that the size of the BPMS market in 2009 totaled $1.9 billion in revenue, compared with $1.6 billion in 2008 — an increase of 15%. According to IDC‘s (2009) estimate of the growth of BPM software market from 2008 through 2013, the CAGR is forecasted at 13.4%. Global Industry Analysts (GIA) calculates the BPM market to be $5 billion by 2017.
In spite of the poor economy in 2009, most of Gartner survey respondents reported that their companies continued to work on process improvement projects; 53% of the respondents reported that their companies spent under $500,000 on process work, while 21% of them spent between $1 million and $5 million.
A lot of organizations that are not using BPM today still code their own business process applications from scratch. BonitaSoft’s approach is to “democratize BPM” by offering a freely downloadable solution tools with a fairy low cost of ownership and to address those green fields – as well as the traditional market. The business model is based on subscription services: BonitaSoft offers training services delivered on-site or remotely, in classroom or remotely and also offers mentoring or consulting services to help customers ramp up their projects. Finally, it has a subscription support service that includes technical support as well as additional features to help our customers accelerate and secure their deployments. (i.e. collaboration, components reuse, advanced connectors with SAP).
While 75% of customers are large organizations, the company takes a bottom-up approach to selling subscriptions, starting with small and medium projects at these organizations and promoting internal adoption. Says Faura, “So when we talk about democratizing BPM not only do we mean spreading Bonita Open Solution worldwide, to a broad range of organizations, we also mean promoting our software within those companies.” BonitaSoft claims that its subscriptions are between 10 and 15 times less expensive than other BPM solutions provided by most proprietary vendors (compared to traditional licenses plus support and maintenance over five years).
Competitors include the large vendors mentioned above, as well as open source products jBPM, ProcessMaker and Activiti. BonitaSoft’s focus, from its inception, has been to distinguish itself by offering a complete BPM solution.
BonitaSoft’s solution comprises a studio that enables users to design processes graphically and intuitively, similar to the way they would on a whiteboard, along with connectors and widgets; a user experience component to run and manage processes; and a flexible execution engine that can adapt to various information systems architectures.
BonitaSoft wanted to gain traction in enterprises by promoting free downloads of Bonita Open Solution, beginning with small projects and gradually expanding across IT departments. It also worked to attract global attention by building partnerships with other open source vendors such as Talend, Jaspersoft, SugarCRM, and eXo. To that end, BonitaSoft recorded its 150th customer in May 2011.
Customers use the company’s BPM solution for internal banking applications (like major French bank Société Générale and EFG bank in Switzerland), e-government applications (such as the governments of the Canary Islands and Mexico), manufacturing (La Sonaca, Atmel, Solvey, Konica Minolta), logistics and supply chain management (ChronoExpres, Coca-Cola), telecommunications (such Conviva and Avisor), Pharmaceutics (Pfizer, Agence Biomedecine), and human resources applications (French Ministry of Agriculture). Customers are spread across 25 countries.
The company started to make sales in Q3 2010. Revenues are under $10 million. BonitaSoft raised $6 million in funding from Auriga Venture Partners and Ventech and plans to continue raising money and is in discussions with VCs in both Europe and the United States.
As mentioned, the company’s mission is to democratize BPM by providing an alternative solution to those provided by proprietary vendors. It follows that the growth strategy is to expand globally and spread Bonita Open Solution to many different countries.
This segment is a part in the series : 1Mby1M Deal Radar 2011