Tuesday, May 19, 2009

Progress' Joe Alsop and SMBs

It seems as if I’m doing a lot of memorializing these days – first Sun, now Joseph Alsop, CEO of Progress Software since its founding 28 years ago. It’s strange to think that Progress started up shortly before Sun, but took an entirely different direction: SMBs (small-to-medium-sized businesses) instead of large enterprises, software instead of hardware. So many database software companies since that time that targeted large enterprises have been marginalized, destroyed, crowded out, or acquired by IBM, CA (acting, in Larry Ellison’s pithy phrase, as “the ecosystem’s needed scavenger”), and Oracle.

Let’s see, there’s IDMS, DATACOM-DB, Model 204, and ADABAS from the mainframe generation (although Cincom with TOTAL continues to prosper), and Ingres, Informix, and Sybase from the Unix-centered vendors. By contrast, Progress, FileMaker, iAnywhere (within Sybase), and Intersystems (if you view hospital consortiums as typically medium-scale) have lasted and have done reasonably well. Of all of those SMB-focused database and development-tool companies, judged in terms of revenues, Progress (at least until recently) has been the most successful. For that, Joe Alsop certainly deserves credit.

But you don’t last that long, even in the SMB “niche”, unless you keep establishing clear and valuable differentiation in customers’ minds. Looking back over my 16 years of covering Progress and Joe, I see three points at which Progress made a key change of strategy that turned out to be right and valuable to customers.

First, in the early ‘90s, they focused on high-level database-focused programming tools on top of their database. This was not an easy thing to do; some of the pioneers, like Forte (acquired by Sun) and PowerBuilder (acquired by Sybase), had superb technology that was difficult to adapt to new architectures like the Web and low-level languages like Java. But SMBs and SMB ISVs continue to testify to me that applications developed on Progress deliver SMB TCO and ROI superior to the Big Guys.

Second, they found the SMB ISV market before most if not all other ISVs. I still remember a remarkable series of ads shown in one of their industry analyst days featuring a small shop whose owner, moving as slow as molasses, managed to sell one product to one customer during the day – by instantly looking up price and inventory and placing the order using a Progress-ISV-supplied customized application. That was an extreme; but it captured Progress’ understanding that the way to SMBs’ hearts was no longer just directly or through VARs, but also through a growing cadre of highly regional and niche-focused SMB ISVs. By the time SaaS arrived and folks realized that SMB ISVs were particularly successful at it, Progress was in a perfect position to profit.

Third, they home-grew and took a leadership position in ESBs (Enterprise Service Buses). It has been a truism that SMBs lag in adoption of technology; but Progress’ ESB showed that SMBs and SMB vendors could take the lead when the product was low-maintenance and easily implemented – as opposed to the application servers large-enterprise vendors had been selling.

As a result of Joe Alsop and Progress, not to mention the mobile innovations of Terry Stepien and Sybase, the SMB market has become a very different place – one that delivers new technology to large enterprises as much as large-enterprise technology now “trickles down” to SMBs. The reason is that what was sauce for the SMB goose was also sauce for the workgroup and department in the large enterprise – if it could be a small enough investment to fly under the radar of corporate standards-enforcers. Slowly, many SMBs have grown into “small large” enterprises, and many workgroups/departments have persuaded divisions, lines of business, and even data centers in large enterprises to see the low-cost and rapid-implementation benefits of an SMB-focused product. Now, big vendors like IBM understand that they win with small and large customers by catering to the needs of regional ISVs instead of the enterprise-app suppliers like SAP and Oracle. Now, Progress does a lot of business with large enterprises, not just SMBs.

Running a company focused on SMB needs is always a high-wire act, with constant pressure on the installed base by large vendors selling “standards” and added features, lack of visibility leading customers to worry about your long-term viability (even after the SMB market did far better in the Internet bust than large-enterprise vendors like Sun!), and constant changes in the technology that bigger folk have greater resources to implement. To win in the long term, you have to be like Isaiah Berlin’s hedgehog – have one big unique idea, and keep coming up with a new one – to counter the large-vendor foxes, who win by amassing lots of smaller ideas. Many entrepreneurs have come up with one big idea in the SMB space; but Joe Alsop is among the few that have managed to identify and foster the next one, and the one after that. And he managed to do it while staying thin.

But perhaps the greatest testimony to Joe Alsop is that I do not have to see his exit from CEO-ship as part of the end of an era. With Sun, with CA as Charles Wang left, with Compuware, the bloom was clearly off the old business-model rose. Progress continues to matter, to innovate, and to be part of an increase in importance of the SMB market. In fact, this is a good opportunity to ask yourself, if you’re an IT shop, whether cloud computing means going to Google, Amazon, IBM, and the like, or the kind of SMB-ISV-focused architecture that Progress is cooking up. Joe Alsop is moving on; the SMB market lives long and prospers!


Anonymous said...

Thanks for writing about Joe and Progress. A unique and "classy" individual and company. I think he made the right move to let Rick have a go at leading Progress without his long shadow. I was sad to see Joe go.

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