Lombardi Analyst Call

Lombardi had a call today for analyst, with Rod Favaron covering business, the market and customers, and Phil Gilbert on the product and technology. Lombardi continues to grow — 60% in license revenue and 40% overall — although their services business isn’t growing as fast as license sales since they are bringing on more partners to provide services rather than doing it all themselves, especially in geographies that they can’t cover well. They’ve increased their headcount by 25% and increased productivity (which allows them to grow revenues faster than headcount), and are in a profitable state for 2008. They believe that BPM will be counter-cyclical to the current economic crisis, and have the potential to grow in more difficult financial times due to a closer focus on ROI: a position that all the BPM vendors are taking (especially with their investors), although I think that a lot of the increased BPM activity will be new projects with already-purchased software rather than a lot of new license purchases. Although it might not drive a lot of short-term license revenue, this will be good for the BPM vendors in the long run due to greater proliferation of projects within customers.

From a product standpoint, they have four active engineering teams:

  • TeamWorks 6, where there’s still some innovation going on around active management of in-flight process instances, to allow business owners to take more granular control at the instance level. There will be another release of TeamWorks 6 before mid-year 2009, which is good news for all those existing 6 users who aren’t ready to make a major platform shift yet.
  • Office add-ins, TeamWorks for Office and TeamWorks for SharePoint, where some upgrades are happening for non-English-speaking users.
  • TeamWorks 7, which will be released in beta next month. This version has been in the works for a couple of years, and Phil thinks that it’s “the biggest leap in BPMS since BPMS’ began” due to the governance and BPM program capabilities that are built in. They’ve rolled in a lot of repository management and code sharing capabilities.
  • Blueprint, where they’re pushing out releases in an Agile development environment every 5-6 weeks. Because of this, the rate of innovation is high, and the product capabilities are growing quickly. Next release is targeted for the third week of December, and next spring they’ll be announcing some capabilities and positioning of Blueprint as a central location where people in a process-centric enterprise go to discuss process by making it relevant to everyone’s job, not just that of process analysts.

From a services standpoint, their own professional services staff is increasing, and they’ve moved from having 5-7 partner staff delivering billable services around Lombardi solutions for every one Lombardi billable professional services staff, to having about 15 partner people to one Lombardi professional services person. They expect this ratio to grow further, and are increasing their efforts in training and certification to support this partner growth.

The first questions from the listeners were around the impact of the economic situation on Lombardi’s business and the BPM market in general, then there was an interesting discussion on the uptake of Blueprint: it’s mostly directly with people in operational areas, not IT, as people see this as a way to get started with collaborating without a lot of up-front capital investment. The interest that they’re getting from the federal government will lead them to offer Blueprint in a “more secure” environment for customers who don’t want their processes in the public cloud — this is good news for non-US customers as well, since there are many European and Canadian organizations who would not consider putting their processes on US-based servers due to the privacy regulations.

Good call, it would be great if more vendors did this on a quarterly or semi-annual basis.

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