BI vendor Actuate, based in South San Francisco, Calif., acquired all outstanding shares of capital stock of privately held Performancesoft Inc., a CPM software vendor headquartered in Toronto. The acquisition was an all-cash transaction with an initial purchase price of $16.5 million and additional contingent cash consideration of up to $13.5 million, based on the achievement of certain goals.
Richard Stark, director of performance management solutions with Actuate, said its dashboards were not the only reason Performancesoft was attractive. The deal gives Actuate new CPM functionality, a trend in the BI market. Vendors like Business Objects and Cognos made similar buys in 2005. At its most basic level, CPM, also referred to as BPM (business performance management), is the practice of aligning operations with strategic goals. By bringing BI and CPM together, users can analyze data to make business decisions that support corporate goals. Actuate plans to differentiate its combined BI-CPM offering by tools and interfaces that bring performance management out of its traditional financial realm, away from "power users" and into the hands of the masses, Stark said.
"We believe that performance management is an enterprise-wide discipline that every manager and every employee in the corporation has a role in," Stark said.
Performancesoft offers important expertise in CPM, Stark said, and cited its technological support for management philosophies like Six Sigma, Malcolm Baldrige and the balanced scorecard strategy. Notably, Performancesoft's pbviews dashboard has open application program interfaces, enabling integration with a variety of BI tools. The product has about 500 implementations worldwide.
However, if users want to drill into the transactional data behind the aggregated dashboard totals, they have to go back to their BI application, Howard explained. Actuate plans to develop tighter integration between the two products.
Actuate said that Performancesoft will continue to support all of its customers, including those using pbviews, with BI platforms other than Actuate. Performancesoft will become a division of Actuate, but will retain its name, branding and philosophy of "openness," Stark said.
"We realize that Performancesoft will sell into a variety of markets, and we don't intend to limit their ability to sell into those markets … openness is a good thing," Stark said.
Additionally, the deal will provide cross-sell opportunities for both companies, giving them better access to complementary markets, according to Howard.
Gartner, a Stamford, Conn.-based research firm, labeled the acquisition "small but significant," in its own news analysis and pointed to the deal as yet another sign of BI-CPM convergence. Bill Hostmann, research vice president with Gartner, called the convergence a "perfect marriage" and described it as top-down CPM strategies combined with bottom-up BI practices.
Not everyone is ready to declare the BI and CPM union final, though.
Keith Gile, principal analyst with Cambridge, Mass.-based Forrester Research Inc., said that many companies are very interested in improving corporate performance, but he's not sure that BI vendors in general have the right answer yet.
"Yes, there is convergence, but no, it isn't here today," Gile said. "For a BI vendor to say, 'we have the mechanism to help you do [CPM] completely,' is a bit of an overstatement."
Defining the rules for enterprise-wide CPM is not a trivial task, Gile said. CPM has been successful in finance because the rules are well defined, but the rules for departments like sales and human resources are not well understood and harder to define. This will be a major challenge of BI and CPM converging across the enterprise, Gile said.