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Pegasystems relationship demonstrates IBM vertical industry strategy

IBM's (Armonk, N.Y.) global strategic alliance with Pegasystems (Cambridge, Mass.) demonstrates the company's strategy of working with solution providers in specific vertical industry groups.

Pegasystems offers financial services firms a "hub" for exception management, incorporating workflow tools and an automated rules and decisioning engine. The software is designed to complement core processing systems by managing any complex workflow process. For example, Pegasystems software can help banks manage credit card disputes in accordance with the complex and frequently-changing rules from the Visa and MasterCard bank card associations.

The IBM-Pegasystems relationship began long before the late July announcement. "Traditionally, we've had a lot of Big Blue customers," says Samir Gulati, vice president, marketing and alliances, Pegasystems. "We started out with their PL1 products in the late '70s and '80s."

But now, the loose partnership has turned into a closer working relationship on several levels. "The value for us is to leverage IBM's relationships with the global banks, to get us deeper into other areas besides the one or two areas we might already be in," says Gulati.

The partnership may also lead to closer integration with IBM's "stack" of financial solutions and technology infrastructure.

Other IBM strategic partners in the payments area are Fair Isaac (Minneapolis) and S2 Systems (Plano, Tex.). "IBM is encouraging us to make sure that our applications integrate closely with Fair Isaac and S2," says Gulati.

Pegasystems' developers will also remain conversant with IBM's system architecture and corporate strategy. "We've had the IBM tech folks come to our development shops," says Gulati. "We work closely with the WebSphere team to make sure that our software integrates seamlessly."

The IBM-Pegasystems relationship is not an exclusive one, Gulati notes. Pegasystems also maintains relationships with firms such as Accenture, BearingPoint and CSC.

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