Pegasystems acquires Firefly to bolster collaboration – but is it going too soft on cloud?

Profile picture for user ddpreez By Derek du Preez June 9, 2014
Summary:
CEO Alan Trefler disagrees and explains that the company is in a good position to take advantage of customers demanding cloud based technologies.

The headline of this article may seem a bit contradictory, given that Firefly is in fact a cloud-based tool that Pegasystems is now going to refactor and bring into

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the fold of its unified Pega architecture. But more on my cloud thoughts later – let's focus on the news first: Pegasystems announced today at its annual user conference in Washington DC that it is going to acquire Firefly for an undisclosed sum, with the deal expected to close early in the third quarter.

Firefly is essentially a co-browser tool, which allows customer service representatives to interact and help customers with online transactions, by bringing up a replica of the customer's browser on the CSR's screen. This allows the CSR to then navigate and direct customers in a helpful way to complete the transaction. Don Schuerman explained during a Q&A with journalists this week that the fact that the tool is web-based was a big bonus for Pegasystems. He said:

“It's entirely web based, so it runs entirely within the context of the browser. There are other co-browsing technologies where they download an applet or something. Firefly is done entirely via JavaScript, which boxes it into the browser. From a client perspective it's much more secure, I'm not asking them to share their desktop with me, just the page they are on right now.”

However, don't be fooled and think that this is simply an acquisition to add a nice little feature to Pega's current offering. Nope, this is a play to more broadly bolster the company's collaboration efforts, where the Firefly team will join Pegasystems to engineer further capabilities into the tool. Kerim Akgonul, VP of product management at Pegasystems, explained what the company has planned for Firefly in the future. He said:

“As we see more and more social capabilities play a role in customer service and customer engagements, the architecture lends itself to extend into additional collaboration capabilities. Part of this is acqui-hire to get these engineers that have this mindset to build out more and more capabilities into the platform. 

“We want to expand our chat capabilities with the end customer and have the chat and the screen sharing as a single solution that's driven from mobile. Mobile based collaboration activities. Design and development, like having Google Docs showing multiple people typing in the same document, people being able to do the same for case life cycle design, UI design, business rule design. Being able to do that through collaborative environments."

Schuerman added that the additional capabilities will also allow customer service reps, or anyone else in the business for that matter, to better collaborate with each other to better serve the needs of the customer. He added:

“It can go beyond two way, it can have multiple people involved. Being able to do something where you have multiple people sharing a single view of the case, simultaneously making changes, updating it, I think that can really lead to a powerful approach about how to get business and IT collaborating.”

Some thoughts on cloud

It's become increasingly obvious over the past couple of years that enterprise software companies that have traditionally come from an on-premise background are no longer shying away from the cloud. In fact, if you look at the likes of SAP, Infor, Oracle and Microsoft, the pace at which they are pushing their customers and their products to the cloud is quite a turnaround from a few years ago. Also, the rate at which the cloud-born software giants are growing is equally hard to ignore. So, when I go to these events I'm very much used to having the word cloud shoved down my throat until I'm practically choking on it, with the companies involved dedicating a lot of their time to convincing me that cloud is the future and that they are ready for the shift.

plug and cloud on sky, concept of cloud computing
Now, I must admit that this is my first major interaction with Pegasystems, so I don't have a great deal of background on the company (apart from my own research) and what I've learned this week at the conference. However, my immediate impression is that the company seems to be, well, just a little bit soft on the cloud front. That's not to say that the topic of cloud wasn't raised – Pegasystems does have its own 'Pega Cloud', it has a relationship with Amazon Web Services and during the keynotes the topic was mentioned on occasion. But not the usual shouting, which I'm accustomed to. Not to say that that's a bad thing, it was just notably softer.

Schuerman said during his Q&A that there had been a big increase in the number of production users on the Pega Cloud, with production cloud usage now growing at a faster pace than dev/test. There are currently less than 100 production customers at the moment, albeit out of a target account base out of approximately 400. Schuerman said:

“I think the big challenge for us in the cloud base is that there are still customers in our target market for whom some of the core operations that they use Pega for, they're just not ready to put on the cloud yet. Either they're not ready, or the TCO model for them doesn't exist.”

Hmmm not convinced that the TCO argument still stands up entirely – thought things had moved on a bit. But nonetheless Pega also today announced its first software-as-a-service application, a predictive diagnostic tool which allows customers to get alerts as to when problems arise with their Pega systems. Or hopefully before they arise. Schuerman said that this will be used as a “test bed” for how Pegasystems approaches SaaS, as well as be used to gauge customer appetite.

The CEO's viewpoint

We were lucky enough to also sit down with Alan Trefler, founder and 'still CEO' (as he put it) of Pegasystems, where I got the opportunity to ask him if Pega has been cautious on the cloud front and if so, what was the reasoning behind it? He said that Pegasystems is fully ready to take on any demand for cloud and as the company's attention begins to shift to, and incorporate more, mid-market customers, he expects that it will play a bigger role going forward. He said:

“I think we have recently accelerated the push to cloud. Last year we introduced full multi-tenancy, which is a useful thing to have, but frankly that's more for the vendor than it is for the customer. It decreases cost. We have been really dialling up the cloud because customers seem more

alan trefler
open to it. 

“Historically if you think about our customer base, companies like JPMorgan Chase, they are so big they've created their own private clouds. So in those situations we run on their cloud, we just don't run on the public cloud, because they don't perceive that they get a particular cost advantage. But now that we are looking to open up the market (focusing more on mid-size companies) the cloud is going to become an increasingly important part of our business and I think we are very well equipped to go forward. 

“We've got a great partner in Amazon Web Services, that gives us the ability to dial up the available resources on demand. We've worked with them for seven years, that's a great relationship.”

Verdict

  • I liked Trefler's response to my question – it does seem that Pegasystems has a lot of its ducks lined up to run to the cloud, if it sees the demand. However, I do think that it needs to be careful not to become complacent. The rate at which market adoption is growing is impressive and companies that traditionally would have dismissed cloud for security/privacy/SLA reasons, are now beginning to realise that there are benefits to be had and that these cloud companies are experts at what they do. Sure, the cloud isn't going to be for everyone, but things are changing.
  • With regard to the Firefly acquisition, seems like a pretty good buy from what I've seen. If they can build out the additional features that were spoken about today, it could prove to be useful for a lot of Pega's customers.