Pegasystems

Pegasystems Inc.
Public
Traded as NASDAQ: PEGA
Industry Software
Founded 1983
Headquarters Cambridge, Massachusetts, United States
Number of locations
 31
Area served
 Worldwide
Key people
Products Customer Relationship Management (CRM)
Business Process Management (BPM)
Revenue IncreaseUS$ 590 million (2014)
IncreaseUS$ 33.3 million (2014)
Number of employees
 3000+
Website www.pega.com

Pegasystems Inc. is an American software company based in Cambridge, Massachusetts. Pega specializes in developing software for customer relationship management (CRM) and business process management (BPM).[1]

The company announced in 1996 that it would be publicly traded on the NASDAQ stock exchange (PEGA). Since 2010, the company has acquired a number of companies including Antenna Software, Firefly and Chordiant.

History

Early history (1983-2000)

Alan Trefler founded Pegasystems in 1983 at the age of 28. The company was established in Trefler's hometown of Cambridge, Massachusetts, where its headquarters are still located today.[2] Trefler's background as a chess player led him to develop computer systems that could play chess in the early 1980s. He stated in an interview with Forbes that when he started Pega, he wanted to resolve the issues of heavy lifting that business people deal with and more importantly getting a computer to understand how business people wanted things to work. He commented in the same interview, "it turns out to be a fairly hard problem to solve".[3]

During the company's early years, they focused on providing case management, namely for companies such as American Express.[4] Pega from its early days onwards focused on using its own cash and returns, instead of looking for outside investment.[3] The company went public in 1996 and began trading on NASDAQ under the symbol PEGA. This move raised millions in finance for the company, meaning they didn't have to pursue venture capital investments from that point forward.[3] Pega entered a period of financial trouble in the late 1990s, following a dispute with its accountants, Ernst & Young.[5] After restating their earnings, Pega faced an investigation by the SEC, which was dropped in 2002.[6]

Recent history (2001-present)

From 2005 onwards, revenues for the company grew strongly, when compared to the rest of the business process management market. Alan Trefler stated in an interview with Computer Weekly that other BPM companies such as Oracle and IBM, were struggling to make gains in the field at the time. Pega reported license revenues rose 34% year-over-year during 2013,[1] with the news of the performance along with other factors, led to Pega's stock rising by 20% in November 2013.[7]

BNY Mellon announced in 2014 that they would be integrating Pega into their operations as part of an efficiency strategy.[8]

In 2015, the company reported an income of $162 million for the second quarter. This was following a steady rise in the company's share price, which had risen by 12 percent since the beginning of the year.[9] The revenue for the quarter was $10 million higher than predictions and it was a 12.6 percent improvement year on year from Q2 in 2014.[10] The Royal Bank of Scotland announced in 2015, that it was using Pega as part of its revised customer relations strategy.[11] Sprint announced a similar solution later in 2015, with the main aim of using Pega to win back clients through a more focused customer relations strategy.[12]

Acquisitions

Pega announced in 2010 that it would be acquiring their competitor, Chordiant. The deal was signed on March 15, 2010, with the purchase of the enterprise software company costing around $161.5 million. With the development of the software as a service market, it led Chordiant's growth to stagnate and force them to look for investors. The acquisition of the company by Pegasystems came soon after, leading some experts to draw conclusions that Pegasystems had acquired the company at "a bargain price".[13] Following the acquisition of Chordiant, Pegasystems integrated the operations of Chordiant into their existing operations.

Three and a half years after Pega acquired Chordiant, came the company's next major acquisition. The mobile application development platform vendor, Antenna Software, was acquired for $27.7 million. The company was located in New Jersey and also had a base in Bangalore. The acquisition would allow for Pega to provide a faster time-to-market and increased flexibility in end-to-end mobile application development.[14]

In 2014, the company announced two separate acquisitions. The first was of the Bangalore-based MeshLabs, which operated as an analytics startup. The financial details of the transaction were not disclosed.[15] Their second acquisition of the year came when Pega acquired the Profeatable Corporation. The startup from Philadelphia, Pennsylvania was the company's first real move into the cobrowsing market. It was suggested that the software tool would be used as additional functionality for Pega.[16]

Products and services

Gartner and Forrester have stated that the customer engagement business has a broad range in terms of its annual valuation. Taking both sets of research into account, the market is estimated to be worth $30 billion to $40 billion annually.[3]

Customer relationship management (CRM)

In 2015, Pegasystems customer relationship management (CRM) suite was listed as one of the largest in the CRM market by David Roe of CMSWire. Pega was included in the top 5 alongside Salesforce.com, SAP CRM, Oracle CRM and Microsoft Dynamics CRM.[17]

Many within the CRM industry have focused on the implementation of cloud technology within their software. Alan Trefler stated in a presentation at the company's annual user conference that many competing products were "online rolodexes". He went onto state that many out of the box applications were often a short term fix to a long-term solution. This is mainly because Pegasystems is seen within the industry as a more bespoke solution than the Oracle and SAP solutions.[18]

During 2015, Pega was chosen as the leader in the field of customer relationship management by a number of leading analysts. In April 2015, Gartner announced that Pega was the leader in the Magic Quadrant for the CRM Customer Engagement Center,[19] along with a similar award from Forrester Research the month prior.

Enterprise Mobility Platform

Clients who have been named as users of the platform have included Heineken.[20]

References

  1. 1 2 Goodwin, Bill (November 21, 2013). "Pegasystems CEO Alan Trefler plans his next move for the $500m software company". Computer Weekly.
  2. ↑ Farrell, Michael B. (July 6, 2014). "Seven things you should know about Alan Trefler". Boston Globe.
  3. 1 2 3 4 Rogers, Bruce (February 24, 2015). "Alan Trefler's Pegasystems Is On A Mission To Transform Customer Engagement". Forbes.
  4. ↑ "The single-easiest way to make customers fall in love with you". Mashable. May 1, 2015.
  5. ↑ Goldbaum, Lisa R. (May 13, 1998). "Is The Accounting Cloud Over Pegasystems Finally Lifting?". Barron's (newspaper).
  6. ↑ "SEC drops Pegasystems probe". Biz Journals. April 10, 2002.
  7. ↑ Tsuruoka, Doug (November 13, 2013). "Pegasystems Q3 Beat Led By License Revenue; Stock Up". Investor's Business Daily.
  8. ↑ Kline, Alan (June 12, 2014). "How BNY Mellon Aims to Stay on Top for the Next 230 Years". American Banker.
  9. ↑ "Pegasystems posts 2Q profit". Yahoo!. July 29, 2015.
  10. ↑ Winhoffer, Lindsey (July 31, 2015). "Pegasystems Reaches New 12-Month High Following Earnings Beat (PEGA)". Watchlist News.
  11. ↑ Macrae, Duncan (June 9, 2015). "Royal Bank Of Scotland Aims To Repair Reputation With Customer Service Focus". TechWeek Europe.
  12. ↑ Clancy, Heather (August 7, 2015). "Can this software help Sprint win back core customers?". Fortune.
  13. ↑ Henschen, Doug (March 18, 2010). "Pegasystems To Buy Chordiant For $161.5 Million". InformationWeek.
  14. ↑ "Pegasystems acquires Antenna Software". Business Standard. October 16, 2013.
  15. ↑ Phadnis, Shilpa (May 7, 2014). "Pegasystems buys Bangalore analytics startup MeshLabs". Times of India.
  16. ↑ Cutler, Kim-Mai (June 9, 2014). "Pegasystems Acquires Co-Browsing Tool Firefly, The First Investment By First Round’s Dorm Room Fund". TechCrunch.
  17. ↑ Roe, David (April 1, 2015). "3 Tech Giants Lead a Bloated CRM Market, Forrester Claims". CMSWire.
  18. ↑ du Preez, Derek (June 10, 2015). "Pega CEO claims most CRM apps are nothing more than ‘conformist online rolodexes’". Diginomica.
  19. ↑ Maoz, Michael; Davies, Jim (April 27, 2015). "Magic Quadrant for the CRM Customer Engagement Center". Gartner.
  20. ↑ Moore, Michael (January 29, 2015). "Tapped Potential: How Pegasystems Helped Heineken Ireland Stay Fresh". TechWeek Europe.

External links

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