This is a copy of a newsletter sent to all Intalio users, customers, and partners today.

Good morning. I hope this email finds you well, and that recent economic developments are not impacting your business too negatively. Every day that passes by seems to bring its lot of bad news. One day, we hear about the Recession. The day after, it turned into a Depression. And yesterday, news broke that the United States, France, and Japan entered into the scary phase of Deflation. Whichever way we look at it, the next few years will be extremely challenging from an economic standpoint, and all businesses must prepare themselves to hunker down in order to survive what is starting to look like the worse economic crisis of modern history.

As 2008 comes to an end, I am wrapping up a worldwide roadshow during which I visited 15 countries and flew over 250,000 actual miles (equivalent to 10 around the world trips along the equator). During this tour, I met over 300 customers and partners, and heard a very consistent story: no matter how bad this economic crisis will get, the businesses and processes of our customers must keep running. These processes are the life and blood of businesses that will certainly be affected by the downturn, but will carry on nonetheless. They help settle financial transactions or provision telecommunication services that will be needed for years to come. They help local and federal governments serve the needs of citizen who will keep asking for more, especially during such challenging times. They help air traffic control keep airplanes flying in the sky, and doctors and nurses save lives in hospitals. In other words: The Process Must Keep Running!

Intalio listened to your stories, and we stand ready to help. Four weeks ago, we closed a new round of funding that will take us to profitability sometime next year, and gives us ample cash reserves to survive even the steepest drop in revenue. Nevertheless, we expect the current downturn to positively impact our business, and our growth to accelerate, for the following reason: being the most viable Commercial Open Source alternative to proprietary middleware vendors, our software is cheaper to acquire, and cheaper to use. With our Community Edition, you can start your BPM project without spending anything on software (50,000 companies are using it today). And with our subscription model for our Enterprise Edition, you can use what many analysts, customers, and partners believe to be the most advanced BPM solution currently available on the market, for a fraction of the cost of any proprietary alternative: a subscription for Intalio|BPMS Enterprise Edition starts at $15,000/year, and you can get it funded from an Operational Expenses (OPEX) budget, instead of having to tap your ever-shrinking Capital Expenditures (CAPEX) budget. In other words: do not spend on expensive perpetual licenses! Instead, save your cash by using Commercial Open Source software.

Since we’re actually benefiting from this downturn, we would like to share the outcome of our success with our customers. The process must keep running, and for it to run, companies and government will need software they can start using today, whatever their budget might be. For this reason, our Board of Directors has decided to extend our product’s footprint, adding the bits and pieces that are required to develop the most advanced enterprise applications, deployed in the most demanding environments. Our BPMS is turning into a complete Business Process Platform (BPP), and we’re pursuing an aggressive acquisition strategy to add the missing pieces to our suite. Last week, we completed the acquisition of a German company (Process Square) that gave us the first on-demand BPM tool that can actually be used by casual business users to automate processes such as Financial Closing or New Product Development. Over the next 12 to 18 months, we expect to complete many more acquisitions, covering areas such as Business Performance Management, Business Rules Management, Calendaring, Complex Event Processing, Master Data Management, Process Simulation, Process Templates, Security, and Service Oriented Architecture. All these components will adopt our Commercial Open Source Model (COSMO), and their respective commercial editions will be made available under very affordable terms. But 2009 will be a very challenging year for many of our customers, and we want to do more to help them develop and deploy the applications and processes they need to run their businesses.

With that in mind, we are developing an Early Adopter Program (EAP) that should help even our most budget-constrained users. According to this program, any customer of our Enterprise Edition will receive three month of developer’s support for any additional component, free of charge. These components include Intalio|BAM, Intalio|BRE, Intalio|ECM, Intalio|ESB, and Intalio|Portal. And to make it even easier for these components to be used next year, Enterprise subscriptions for these components will be offered at discounted prices when purchased this quarter and during the first two quarters of 2009. And because we all need to do more with less, now is the time to upskill your teams and invest the few resources you still have access to for training. In such a context, we have recently hired 5 new Process Experts (we now have 12 of them around the world), have extended our Advanced Training Program, and allow customers to purchase training seats this quarter and use them anytime in 2009.

All that being said, let’s close on a more positive note, and acknowledge the fact that some geographies or some vertical industries will be less affected than others by the current economic downturn. Markets like Brazil, China, or India continue to grow rapidly, and are contributing to Intalio’s growth more and more significantly. For customers in these markets, my advice would be the following: keep investing on BPM 2.0, now more than ever. Such investments will allow you to build the infrastructure and expertise that will make your companies and governments even more competitive in the future.

I wish you all the best, and stand ready to answer any questions you might have.