Tear Down That Wall

One of these days, when the business technology textbooks look back on the adoption of portals during the “cautious days of the early 21st Century,” much will be attributed to our primitive and tentative efforts to get our hands around the converging technologies upon which information management relies. I’ll bet you that the technologies we now think are so whiz-bang will sound awfully quaint. But what will certainly be the legacy of this time is the sweeping effect of consolidation of the marketplace.

I’m probably the last person in America to have seen the Academy Award winning film “A Beautiful Mind,” but I just saw it last night. In a strangely dreamlike sequence, it dramatizes the moment that Nobel Prize winning John Nash arrives at his famous theory of market equilibrium, a sweeping new view which has since been applied to explain everything from trade negotiations to evolutionary selection to game theory. Nash studied interactive decision-making, where the outcome for each participant or “player” depends on the actions of all. If you are a player in such a game, when choosing your course of action or “strategy” you must take into account the choices of others. But in thinking about their choices, you must recognize that they are thinking about yours, and in turn trying to take into account your thinking about their thinking, and so on.

The way it’s illustrated in the film is this: Five women walk into a bar in Princeton, four pretty brunettes and one magnificent blonde. Naturally, all the men focused on the blonde.

Nash realized that was a mistake. Adam Smith, the father of the common capitalistic economic theory of the time, would have predicted—and encouraged—the pursuit by all parties for the blonde. It’s the satisfaction of self-interest that drives markets, said Smith, and everything for him was a zero-sum game. The only way to win was that someone else had to lose.

But Nash argued that, in a balanced and successful system, it is a far more effective strategy to approach one of the brunettes. Here’s why: If all five men went for the blonde, four would lose. The brunettes would then spurn the four for overlooking them as second-best. In Smith’s zero-sum economy, there’s only one “winner,” and a mess of unhappy youngsters. But in Nash’s worldview of enlightened self-interest and equilibrium, everyone dances.

The Dis-Equilibrium of the Portal Market

Nash would have an absolute conniption over the enterprise portal market of today, because it represents everything about a balanced equilibrium AND a zero-sum game. On one hand, there are implementers who view the portal as the ultimate dance floor, where everybody shares space and everybody’s happy. On the other hand, the solutions providers are rapidly disappearing as they are absorbed or defeated by a small number of magnificent powers. I’ll be surprised if there’s a so-called “pure-play” portal vendor still standing by the end of this year.

The analysts have (naturally) created a term for what’s happening in the portal market. It’s the emergence of what they call the “Smart Enterprise Suite” and you’ll be hearing a lot about it, under a variety of names, in coming months. According to Gartner, this new type of suite product “covers the needs for content management, knowledge management and collaboration inside and between enterprises.” After all, reasons Gartner, “previous examples of aggregation of functionality into suites have created dominant product categories: ‘office suites’ collected what were originally independent personal-productivity tools; and ‘enterprise resource planning suites’ grew from manufacturing planning and finance systems, and now cover a wide range of business application functionality. In the workplace area, groupware products combine messaging, scheduling and some basic document-sharing functions.

“By 2004,” concludes the Gartner research, “smart enterprise suites will emerge as an aggregation of the functionality offered today by portals, team collaboration support and content management.”

It’s into this market of fewer and fewer suppliers who control more and more of the IT landscape that today’s content management vendors, systems integrators and implementers now cautiously tread. And I say cautiously, because now is NOT a good time to bet the farm on a decision that will influence your every business process decision for perhaps decades to come.

One example of an organization that understands the dynamics of this is Fujitsu Consulting. Formerly a loosely knit collection of independent consulting and integration firms (such as Amdahl, DMR in Canada and ICL in the UK) that Fujitsu had acquired over time, Fujitsu Consulting was formed last April to put a branding umbrella over its global consulting business. They reckon that pulling all the disparate Fujitsu “franchises” (wireless, servers, PCs, scanning products, software, etc.) into a single global behemoth will take them through this era of consolidation better than a loose collection of non-branded entities.

Ellen Reilly runs the content management practice in the U.S. for Fujitsu Consulting. Ellen sees it simply: “Fujitsu sells laptops, tablets and PCs into organizations. Obviously, it’s not just a hardware sale; there are the applications that run on those. Fujitsu owns 60% of the scanner market, so there’s a lot of imaging business going on. And we’re out there selling content management solutions and portals, too—our challenge is finding out how all those fit together.” And, by the way, she adds, “they do.”

The way they do that is to address not the immediate hardware of software requirements of the customer. Any warehouse jobber could do that. Today’s vendors and customers alike need to find the commonality of the Big Picture and try to redefine individual business process solutions as part of a strategic, long-term performance-enhancing effort.

This is by no means a new theme, if you’ve been reading these papers. But as we’ve been writing here, saying it and doing it are two different things, especially in trying times such as these.

There’s an undeniable “forest for the trees” conflict that Ellen and her troops at Fujitsu face. There are many organizations that take the approach of “solve the business problem first, then worry about the big picture later.” But there are also the larger organizations that pick the enterprise portal first, then look downstream to ask, “What do I want to build with this?”

It’s a hard lesson to swallow, but the fact is that those who are choosing to go “platform first, solutions second”—a “next-generation enlightened view” if you will—are having an exceptionally hard time getting those deals done. And it’s mainly because they can’t make the ROI argument that sticks. “Unless,” says Ellen, “you have a Chief Knowledge Management Officer, or a CIO who really understands that it’s an infrastructure play.” What you want is a common architecture to solve all your problems throughout the enterprise, but that’s a harder sale today.

Learning the Lesson

It’s a hard, lesson, yes, but an essential one, says Peter Auditore, VP U.S. Marketing, Hummingbird USA. “Organizations should avoid becoming like a country-western song, where they have built portals to nowhere where nobody can find anything. This has been the case with many enterprise portal implementations over the past several years...they failed to deploy portals that optimize and change business processes.”

This is one of the goals of successful portal implementations. The other goal is a far more maintenance-oriented one. Users just want to fix the problem caused by uncoordinated attempts to deploy business solutions. And that problem has worsened in recent years: “You’ve got lots of organizations that have multiple platforms, and want to implement an enterprise content management or portals strategy, but they also want to take advantage of the economics of managing one platform,” explains Ellen. According to Peter at Hummingbird, these are the customers who have failed to see the forest for the trees: “Build the information management system first around the business process and THEN evolve the portal infrastructure around it to deliver clear business value and ROI,” Peter says.

The example Peter often uses is basic document management. Customers around the world want to implement some kind of portal strategy to “share knowledge” or “create collaborative spaces” or whatever. And yet when Peter asks whether they have any kind of overall document management strategy in place beyond their legal department, the answer is usually no.

It’s this disconnect in the market—the lack of the most basic foundation across the enterprise while individual business applications take all the attention—that has created an opportunity that only the most well-rounded vendors have been able to act upon.

Peter writes about the emergence of enterprise suites in his article elsewhere in this paper. His message is pretty basic: the two facets of IT—the applications and the infrastructure—are inextricably linked. And it’s only the largest and most powerful vendors who can bring the best of both worlds. So, the re-definition of content management and portals as the key driving force behind information management (remember last month’s message?) puts the suppliers of ECM who also have a major play in the infrastructural market at the head of the class. And the way to become one of those triple threats—a combination document, content and portal management provider—is to tear down the artificial walls that separate those functions. As both Ellen and Peter point out, though, it’s one thing to offer all that functionality in one “suite” or from one vendor, but it’s quite another to convince the buying public that all their IT decisions need to be “big” decisions. In today’s environment, customers cannot be blamed for reacting on a much more modest scale. This dynamic—vendors thinking big and customers thinking small—has slowed IT deployment and resulted in the demise of many of the market’s smaller, less “global” players.

An Ever-Shrinking Market?

Will the convergence of content and application management within the portal or the suite or whatever you call it lead to a market dominated by a small number of large, well-armed vendors? I suppose it could. There has been a cycle of “consolidation” and “shake-out” for as long as I can remember. But I noticed that last month’s KMWorld Buyers Guide was no smaller than any from last year. The names of the players might change over time, but the show must go on.

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