There is Progress to be made in Lisbon

Sara Driscoll reports from Portugal

The application infrastructure vendor is hoping its latest technology conference provides an opportunity to deal with its perennial branding problem and build on the loyalty of its channel. With the English football debacle – losing to France in the final minutes in the European cup last year – all but a distant memory, Progress Software was hoping to score big with partners at its Technology World conference in Portugal.

The application infrastructure vendor operates a 65 per cent indirect model, with the remaining 35 per cent split between OEM partnerships and direct sales. The vendor has 2,000 partners, mostly ISVs, worldwide, around 800 of which are in Europe.

“We have got a huge channel that we are very proud of,” said Julie Christiansen, director of partner marketing and development at Progress. “We utilise the technology through our channel and out into the community, and we help our partners take our technology to market.”

The vendor is made up of four different technology units: OpenEdge, which operates mostly through ISV partners, is a business platform based on service-oriented architecture that aims to get business applications working together more efficiently; Sonic software is its secure messaging server unit, and integrates with OpenEdge; its DataDirect unit comprises components to ensure all the software architectures work together; and the Real Time division, which provides Event Stream Processing (ESP), data management, data access, and synchronisation products. The Real Time products analyse data coming into a corporation and let the user know in real time if there are any patterns emerging; it is mostly for applications such as algorithmic trading and RFID.

Most of the units are made up from the seven acquisitions the vendor has made in the past six years, the most recent being Apama. Dave Ireland, senior vice-president at Progress, said the firm has acquired companies that either had good complementary products, or whose products would fit well with its overall strategy. “The integration of the companies is going well. We have learned a lot on how to select the right company to acquire. For partners, essentially they can take or leave the new technology we acquire; it is entirely up to them. It is simply a case of there being more goodies in the goodie bag,” he said.

However, with so many acquisitions, the vendor is running the risk of massive confusion among its brands, something that Ireland and other Progress executives admitted.

“We know there is only so much we can do [with our brands]. Sonic has a good brand in its own space, but I would say that our other divisions, and even Progress itself, doesn’t,” Ireland told CRN. “One of our goals for 2006 is to try and sort our branding out and we will do better. But if I am honest I don’t know exactly how much better we will do.

“It is a perennial problem that we have, and that we are trying to address, one I wish would go away, but it will always be a problem because of the way we go to market.” Ireland explained that, as the vendor is mostly sold through ISVs, almost 70 per cent of end-users are unaware they are using Progress technology.

Frank Mcllory, vice-president EMEA at Progress, said the branding problem was difficult to justify. However, he claimed it wasn’t a problem for most of Progress’ partners. “Our partners tend to be very long-term, so they have known us all along. The captive audience, for example our ISVs, knows the different brands so it doesn’t stop them partnering with us,” he said.

Simon West, channel sales manager UK at Progress, agreed. “From a channel perspective there is immense loyalty. We always introduce our partners to each new technology group as we go along, or acquire someone new. Most of them see us as Progress Corporation with four main product lines, they don’t really see all the different branding,” he said.

But Mike Thompson, principal research analyst at Butler, said this could cause danger in the long run. “If Progress keeps buying companies at the rate it currently is, it will have to bring them under current brands,

otherwise people will not know who they are buying from,” he said.

With the acquisition of Apama, the company gained technology that has become part of its Real Time division. ESP is designed to spot patterns in data entering a company in real time. For example, Gordon Van Huizen, chief technology officer at Progress, said the application is particularly relevant for traders as it can spot patterns within the data that may effect whether shares are sold or kept. The advantage is, he claimed, that companies do not have to get the data, store it somewhere and then run analytical software over it, in which case the buy-or-sell opportunity may be lost. Instead, ESP can analyse the data as it comes in and action it in real time.

Thompson said that, although this technology was beneficial now, his concern was that there is a limit to what you can do with it, and that in order to keep up its current growth the vendor would need to get more into the management layer.

“To a large extent the firm is reacting to the market, which has worked very well for Progress, but the application development space is going to change, and in five years Progress may need to adjust its application development focus and business model to maintain its growth,” he said.

The vendor reported its financial results recently. For its third quarter 2005, turnover was up by 11 per cent from $89.3m in Q3 2004, to $99.5m. Under generally accepted accounting principles, its operating profit increased by one per cent to $12.9m from $12.7m in Q3 2004. Net profit increased by 57 per cent to $13.4m from $8.5m in the same quarter last year.

Ireland ascribed much of this growth to Progress’ relationships with its partners. “We are lucky because the markets have diversified, so when one of our markets is down, another is up; but a lot of our growth can be put down to our renewed and ongoing focus on our partners,” Ireland said.

The vendor took the opportunity in Lisbon to launch a new partner programme (CRN, 3 October). The Accelerator programme is aimed at helping partners to migrate from building on rivals’ platforms and onto OpenEdge. Ireland said: “We used to have a one-size-fits-all approach, but realised this isn’t in the real world. Now we have developed a core customised plan for each partner – it’s about offering granularity.”

The programme enables partners to join at any of the three stages: Learning Accelerator, Development Accelerator or Market Accelerator, depending on their existing skills.

Mark Armstrong, business development director at Progress partner Visualfiles, told CRN the programme ranges from training to improving sales process and success ratio to strategic business planning. “We have attended one-on-one strategic business and marketing planning workshops over the past three years. Last year’s planning meeting resulted in us restructuring our whole business.

“Progress really engages with us to do business planning for the long term as well as to focus on short and medium term objectives,” he said.