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IBM Acquires BPM Vendor Lombardi

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IBM on Wednesday added another piece to its business process management (BPM) portfolio when it acquired Lombardi, a privately held software developer based in Austin, Texas.

Financial terms of the deal were not disclosed.

IBM (NYSE: IBM) officials said Lombardi's department-level approach to delivering process management will complement the enterprise-wide process management features found in Big Blue's flagship WebSphere application suite.

Craig Hayman, general manager of IBM's application and integration middleware group, said Lombardi's applications helps businesses identify the best way to streamline their most important business processes and do it in a way that improves efficiency and reduces costs.

"Any discussion on business improvement inevitably leads to improving the processes that are at the heart of every company," Hayman said in a statement. "Recognizing this, IBM has strengthened its presence and investments in business process and integration software to meet these growing client demands. Lombardi fills out our company's portfolio in this key area."

IBM has made a number of high-profile acquisitions in the past couple years -- all with an eye toward improving its BPM and business analytics offerings both on-premises and in the cloud.

In July, it shelled out $1.2 billion for business analytics provider SPSS. In 2007, it snapped up business intelligence software maker Cognos for $5 billion and in 2006 it acquired content management provider FileNet for $1.6 billion.

"Today's announcement by IBM of its intent to acquire Lombardi marks an important step forward in IBM's continuing build-out of its middleware and infrastructure business in general, and its BPM suite in particular," said Donald Light, a senior analyst at Celent, a Boston-based financial research and consulting firm.

All these acquisitions make it abundantly clear that Big Blue isn't afraid to open its wallet to fend off longtime rivals like Microsoft, SAP and Oracle as well as new challengers Google and Salesforce to provide an integrated suite of on-demand and on-premises business applications to enterprises.

According to IDC, worldwide BPM software sales will grow at a compound annual growth rate of nearly 15 percent a year for the next four years -- pushing the total market from rough $1.7 billion in sales this year to more than $3 billion by 2013.

IBM officials said the two companies already share a number of large BPM customers, including Ford Motor Co. (NYSE: F), that are using a combination of BPM apps from both vendors.

A Gartner survey released this summer found that 55 percent of companies expect to increase their BPM spending by at least 5 percent in the next year.

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