Steve Hendrick of IDC gave the morning keynote with predictions for the next five years of business rules management systems. He sees BRMS as being at a crossroads, currently being used as passive decisioning systems with limited scope, but with changes coming in visibility, open source, decision management platforms and cloud services.
He took a look at the state of the BRMS market: in 2008, license and maintenance revenue (but not services) was $285M, representing 10.5% growth; significant in its own right, but just a rounding error in the general software market that is about 1000 times that size. He plotted out the growth rate versus total revenue for the top 10 BRMS vendors; no one is in the top right, IBM (ILOG), CA and FICO are in the lower right with high revenues but low growth, Pegasystems, SAP (Yasu rebranded as NetWeaver BRM), Object Connections, Oracle, ESI and Corticon are in the top left with lower revenues but higher growth, and IDS Scheer (?) is in the bottom left.
Forecasting growth of the BRMS market is based on a number of factors: drivers include market momentum, business awareness driven mostly by business process focus, changes in worldwide IT spending, and GRC initiatives, whereas the shift to open source and cloud services have a neutral impact on the growth. He put forward their forecast scenarios for now through 2013: the expected growth will rise from 5% in 2009 to just over 10% by 2013. The downside growth scenario is closer to 6% in 2013, while the upside is 15%.
Many of the large ISVs such as IBM and SAP have just started in the BRMS space through recent acquisitions, but IBM tops his list of leading BRMS vendors because of the ILOG acquisition; FICO, Oracle and Red Hat are also on that list. He also lists the BPMS vendors with a strong legacy in BRMS, including CA (?), Pegasystems and TICBO. Open source vendors such as Red Hat are starting to gain a foothold – 5-10% of installed base – and are a significant threat to some of the large players (with equally large price tags) in the pure play BRMS space. Decision services and decision tables, which are the focus of much of the BRMS market today, can be easily commoditized, making it easier for many organizations to consider open source alternatives, although there are differences in the authoring and validation/verification functionality.
He spoke about moving towards a decision management platform, which includes looking at the relationships between rules and analytics: data can be used to inform rules definitions, as well as for decision refinement. CEP is an integral part of a decision management platform, with some overlapping functionality with a BRMS, but some complementary functions as well. He puts all of this together – data preparation, BRMS, decision refinement, CEP and state – into a core state machine, with links to an event server for receiving inbound events and a process server for initiating actions based on decisions, blending together an event, decision and process architecture. The benefits of this type of architecture:
- Sense and respond provides granular support for all activities
- Feedback allows immediate corrections to reduce risk
- Decision models become complex but processes become simple
- Model-driven with implicit impact analysts and change management
- GRC and consistency are derivative benefits
- Scalable and cloud-ready
This last point led to a discussion about decision management platforms as cloud services to handle scalability issues as well as reduce costs; aside from the usual fears about data security, this seems like a good fit.
His recommendations to vendors over the next five years:
- Add analytics to complement the BRMS functionality
- Bring BRMS, CEP, BPM, analytics and EDA together into a decision management platform
- Watch out for the penetration of open source solutions
- Cloud DMP services cater to the unpredictable resource requirements and scalability
Recommendations for user organizations:
- Understand the value that analytics brings to BRMS, and ensure that you have the right people to manage this
- Commit to leveraging real-time events and activities as part of your business processes and decisions
- Watch the BRMS, CEP, BPM and analytics markets over the next 12 months to understand the changing landscape of products and capabilities
A good look forward, and some sound recommendations.