Only 18 months ago, Forrester Research forecasted revenues for business process management software, services and maintenance of $2.7 billion in 2009. In an updated report released July 30, Forrester has raised its estimate to $6.3 billion by 2011. The two-year difference notwithstanding, demand is accelerating, with growth rates expected to range between 17.5 percent per year to 35.5 percent per year over the next five years.

"Just the size that the market is reaching is the real news," says analyst and report coauthor Colin Teubner. "Our previous forecast showed it less than half the size we're predicting now."

The report attributes the rapid growth to four key trends:

Increased deployment of composite/dynamic applications developed in BPM suites.

Continued adoption of BPM to ensure controlled, auditable processes as required by SOX, Basel II, HIPAA and other compliance mandates.

Reduced BPM costs, thanks to "a la carte" pricing of human-centric (aka, workflow-centric) suites.

Increased availability of packaged BPM applications for healthcare, telco, manufacturing, financial and supply chain processes.

Pervasive adoption of services-oriented architecture (SOA) is also giving BPM a lift, says Forrester. "You can do BPM without an SOA, and you can do SOA and build more traditional applications, but the majority of companies view SOA and BPM as going hand in hand," says Teubner.

While a handful of companies are now marketing SOA and BPM suites together, notably IBM, TIBCO, BEA and Software AG, Teubner says that won't diminish the prospects for BPM pure-play vendors. "Companies may be just as happy to buy their BPM suite from a vendor that doesn't provide SOA infrastructure, particularly if that's something they already have in place," he says. "[The pure plays] are competing on innovation, usability and focusing on the needs on the business side. The infrastructure vendors have been more focused on developers and the IT side."

To put these figures in perspective, Gartner put business intelligence software revenue alone at $6.2 billion in 2006, but the market growth rate was a modest 11.5 percent last year. The complete BPMS Revenue report can be downloaded from this link to the Forrester Research Web site.

In a separate report issued this week, Forrester named the "leaders," "strong performers" and "contenders" in its annual "Forrester Wave: Human-Centric BPM for Java Platforms. Pegasystems is in the top-right position in the Leader Wave thanks to its "rules heritage… powerful and flexible architecture… excellent scalability and well-designed developer tools."

Also appearing in the leader quadrant were, in order, Appian, Savvion, Lombardi, TIBCO and Software AG (the latter having acquired webMethods earlier this year). BEA, Fujitsu, HandySoft and IBM were in the Strong Performer wave while Graham Technology and Intalio were ranked as Contenders. Global 360 and Metastorm were among those not included in the Java Platform review as they offer more .Net-centric suites.

Forrester's 21-page Wave report can be downloaded from the Pega or Lombardi Web sites (registration required).