NU Online News Service, Dec. 16, 2:46 p.m. EST
IBM took a step today to reinforce its position in the insurance marketplace with the acquisition of Lombardi, a privately held software company based in Austin, Texas. Financial terms were not released.
Lombardi was described by Armonk, N.Y.-based IBM as a provider of business process management (BPM), which helps companies control and track the workflow within their organizations.
"Any discussion on business improvement inevitably leads to improving the processes that are at the heart of every company," said Craig Hayman, general manger, IBM application and integration middleware.
Mr. Hayman said, "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."
Donald Light, senior analyst for Celent, a Boston-based financial research and consulting firm, said in a statement: "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.
"For years, Lombardi has been one of the leading BPM providers, with a strong presence in the insurance industry."
He noted, "Celent has seen a heightened interest in BPM among midsize and large insurers in the past 18 months, as they examine wrap-and-extend alternatives to ripping and replacing their core systems. BPM solutions can also play an important orchestration role within an insurer's SOA strategy [service-oriented architecture--which allows different software programs to speak to one another]."
IBM said that one market report put the market growth for BPM at 15 percent over the next four years from $1.7 billion to $3 billion.
Mr. Light told National Underwriter that the move by IBM, which he said is a significant provider of hardware to the insurance industry, does not serve to capture market. Instead, it will allow the company to expand further into this technology segment.
"It is an avenue of growth, opening the door further for IBM," said Mr. Light, adding that up until now the company has not been a strong player in this technology. "It will help complete and strengthen their position."
The main beneficiaries of this technology, he noted, will be insurance companies and very large brokerage firms where the workforce is sizable.
Mr. Light noted that IBM's largest competitor in this technology is Pega System, based Cambridge, Mass.
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