While the need for DAM is stronger than ever, I do not think the DAM platforms as currently offered have long-term futures. The DAM Platform as an independent entity is unlikely to be able to compete over the longer term and is already running out of the steam necessary to sustain momentum.
Over the last year, my DAM News co-contributor, Ralph Windsor and I have discussed what we call "The DAM Value Chain." The basis of this idea is that Digital Asset Management is a series of operations that users apply to their binary data to transform it from raw unprocessed materials into items of value -- or assets.
The more one examines DAM from this aspect, it becomes impossible to conceive of vendors being able to single-handedly support the entire digital media supply chain as it grows in depth and sophistication.
The End of the DAM System as We Know It?
While interest in DAM has clearly taken off in recent times, this seems to be more in spite of vendor offerings rather than because of them. Many DAM users express dissatisfaction at the way DAM systems work and how to practically relate this back to the tasks they have to complete.
While it is far from unusual for users to complain about software, the over-reliance on external tools to finish off tasks that their system of choice should handle natively is quite startling. Nearly every professional digital asset manager I come into contact with has to be expert with at least Excel (or another spreadsheet), Photoshop, text editors and frequently a conventional desktop DAM application such as Lightroom -- plus a whole panoply of supporting utilities that can be called up for some specialist job or other.
With a few notable exceptions, many DAM vendors have an almost limitless capacity for misplaced arrogance. They have incorrectly interpreted increased demand as a sign of improving customer satisfaction. This is a loud and clear message to vendors: just because you are selling well right now does not mean that users think your products are good enough!
The Many Threats to DAM Vendors
An increasing number of related but separate solutions (especially WCM) have the capability to muscle in on the DAM market and they are already taking some niche positions at the edges. There are open source modules that use WCM tools like Drupal, SharePoint has an active and growing market for DAM extensions and some WCM tool vendors (e.g. Telerik) are starting to add Digital Asset Management features.
In addition, there are threats to DAM systems from their own suppliers that most are not properly taking into account. The market for ancillary tools which DAM vendors depend on is probably growing at a faster rate than DAM itself -- but with limited competition in each separate functional realm.
Those who supply DAM vendors have the advantage that they can offer their wares to competing platforms and hedge their risks across multiple customers so they are not relying on one partner to retain a stake in DAM. Furthermore, they can acquire competitive intelligence about the strengths and weaknesses of all of them, find out what works, or does not, and provide DAM-like (or perhaps "DAM-lite") capabilities themselves when the time is right. Some might choose to do this by acquiring smaller vendors or just extending their own products.
I have observed large platform-oriented suppliers like Amazon establish a range of services that practically invites prospective DAM vendors to leverage their platform to rapidly introduce DAM capabilities using a SaaS model. It does not matter to them who "wins," they are going to earn service revenues whatever the outcome. The more that get involved, the greater the quantity of data they get to acquire about the operation of the market -- this is almost as valuable as the sales revenue itself.
This appears to be the model of how large vendors exploit the DAM market, not by getting directly involved, but selling the shovels on an industrial scale to allow others to do the digging for gold.
DAM vendors are falling over themselves to copy each other and building ever more complex platforms with layers of legacy issues that will need to be unwound and replaced repeatedly over the next few years. This will tie them up in knots and provide more agile competitors with an opportunity to make rapid progress at their expense.
Most current DAM solutions have attempted to "land grab" market share by trying to be all things to all people in a fashion which they cannot sustain and they stand to incur losses as they attempt to defend that position if the current growth trends in DAM stagnate or if nascent competitors from other fields acquire a foothold.
The Best Of Breed Future For DAM Platforms
DAM vendors already take a quasi-best of breed approach to delivering solutions. They frequently go to great lengths to disguise this fact but not one DAM vendor that I am aware of now builds everything from scratch themselves. The faster growing vendors have been able to take existing technologies and rapidly assimilate them without being encumbered by bloated legacy code or previous technical decisions which now look like poor choices (e.g. using a proprietary databases).
Smarter and more agile vendors may ultimately form a marriage of convenience with operators in related fields like WCM, ECM (or possibly even a white elephant like CXM) to circumnavigate DAM vendors so it becomes more of a utility offering than a specific class of enterprise software solution.
Some of those in DAM who have noted these trends already starting to take shape may be able to re-architect their offerings in a more service oriented fashion and thus protect their revenue streams. Others who are still locked into ill-conceived monolithic world domination strategies with themselves as the sole supplier of everything (in the manner of some 1970s mainframe hardware manufacturer) are doomed to crash and burn unless they can become self-aware fast enough to understand the inherent risks now taking shape and make the necessary changes to their business model.
Title image courtesy of Sergiy Telesh (Shutterstock)
Editor's Note: Be sure to take the time and check out Naresh's article Revenue Generation Using Digital Asset Management Solutions