ECM Market Overview 2008
Without doubt, 2007 was an important transitional year for enterprise content management (ECM). We saw the emergence of the MOI vendors—Microsoft, Oracle and IBM—as serious players in the market, with the dual, and frequently contradictory, goals of bringing ECM to the masses and delivering sweeping content services as core infrastructure.
The upper end of the industry saw a wave of consolidation. At the end of 2006 came the acquisition of FileNet by IBM, Stellent by Oracle and Hummingbird by Open Text. And 2007 found the acquiring firms integrating and repositioning those products into their broader software portfolios. In a sense, 2007 became a difficult time for buyers of ECM technology, as many of the leading vendors were going through profound and fundamental changes. Yet, it was also a time of opportunity since in the mid- and lower-end markets we saw not consolidation, but new entrants, at a local, industry and technology specialist level.
Of all the vendors, though, EMC Documentum went through the most turmoil in 2007, with the loss of its charismatic leader Dave DeWalt and a swath of senior managers prior to the launch of its latest platform version, called "D6." A major release and the loss of leadership would be traumatic enough, but EMC as a whole went through a period of change in 2007, which continues to impact Documentum heavily.
EMC is essentially a storage company, and as many had predicted, the company began to reposition Documentum products in the archiving space (where they could be combined with very profitable storage products). At the same time, EMC started to reposition itself as hosted supplier à la EDS or Infosys. All of those changes probably make good business sense in the long run, but so much change in such a short time can be difficult for customers. We found that buyers are excited by the improvements they have found in D6, but are understandably concerned about the commitment of Documentum to its traditional document management roots.
The sole remaining independent ECM major, Open Text, seemed to benefit from all the turmoil, although it was going through plenty of its own. And far from fading away as many had predicted, it actually grew and became more visible in the marketplace.
As our risk assessment chart on page 9 shows, the major ECM vendors are all going through a period of extended change, and although all of them made progress of one kind or another in 2007, they have a long way to go before the integration, development and repositioning work is done. For the buyer, 2008 will present no more stable a market than 2007.
And if it is all change at the top of the market, then the midsize and smaller suppliers are in no less a state of flux. This time, though, it has far less to do with merger and acquisition activity than in dealing with the upheaval that Microsoft SharePoint has brought to their business models. Virtually every midsize and small ECM player is adapting to deal with that issue. Some are trying to find a co-existence model with Microsoft, while others are trying to differentiate themselves by becoming more vertical industry-focused, and a few remain in denial.
Some vendors who tried to co-exist with Microsoft and partner extensively with Microsoft were acquired in 2007. They include Hyland Software, which was acquired by private equity interests, and Meridio, by search vendor Autonomy. Other erstwhile partners have reported to us that Microsoft is not always playing fair, particularly in larger deals. Sharing the fish tank with a shark is risky at the best of times.
Open source options started to flourish in 2007 and will undoubtedly become more prominent in 2008. Alfresco continued to grow, and Nuxeo finally gained better exposure into larger deals and is emerging as a serious competitor to Alfresco (at least in Europe). Knowledge Tree from South Africa recorded hundreds of thousands of downloads of its open source option, and we finally got ECM in a box, courtesy of InfoGrid Pacific. Although selling at the moment in developing nations, this open source, rack-mount appliance appears to be receiving a welcome response and offers a new model to the market.
Companies and Suppliers Mentioned