This time of year is often a popular period for prospective and existing Digital Asset Management users to consider investing in a new system. Anyone who is faced with this task has a bewildering array of choices with hundreds of vendors across a whole spectrum of functionality and significant overlap between them. DAM software is getting ever more versatile and with increased sophistication comes greater complexity for buyers when it comes to comparing options.
What Is Wrong With DAM Systems Now?
As they review DAM systems, many end users are likely to find themselves wanting to take a feature from one tool but a different element from another. Right now in 2013, that is impractical because the majority are incompatible unless end users are prepared to implement multiple tools and try to integrate them using whatever API or scripting features that each has available. They are more like "DAM Islands" with limited connectivity between other software destinations that users wish to travel to.
Many vendors want to land grab market share by attempting to cover every conceivable need. They all want to ensure that their system isn’t the one that fails to "tick all the boxes" -- to use that fateful expression which has explained away a multitude of enterprise software purchasing sins.
From an industry perspective, this is unsustainable. Large portions of the time invested into DAM development is spent simply replicating competitor features. Each vendor's take on a given requirement is different from all the rest, sometimes markedly, on other occasions it is practically identical.
This amounts to a massive industry-wide duplication of effort which ultimately hinders innovation as vendors have to constantly divide their attention across an ever-expanding range of end user problems.
At present, the DAM industry is in a boom period because of both a wider post-dotcom trend towards all things internet related combined with the growth in media origination devices like digital cameras etc. Before long, the market will begin to fully mature and a period of consolidation and cost competition may start -- this has arguably already commenced.
As these growth trends start to complete their cycle, the boom will level off. We might avoid a bust, but given the wider austere economic environment, it is unrealistic to expect end users to be able to keep subsidizing the scale of the current cost-duplication involved in the DAM software market.
|Editor's Note: To read a longer version of this article, see The Digital Asset Management Value Chain: The Future Direction Of DAM In 2013 And Beyond|
The DAM Value Chain - The Whole Is Bigger Than The Sum Of Its Parts
There are two key elements to understanding exactly what the DAM Value Chain is:
- Digital assets are more than just files. It is the other management related activities, for example, cataloging them with metadata, which transform a binary object (file) into an asset.
- Digital Asset Management collectively describes different activities which users carry out upon assets. Sometimes these will take place in proximity to each other, others may be carried out independently and by different individuals.
If you stop looking at DAM as a single system supplied by one provider and instead consider it as a series of process where value gets added by many different contributors, this is closer to how DAM Value Chains could operate.
Many DAM vendors implicitly grasp this fact already. Very few (probably none) will develop every single software component supplied to end users themselves. Most will make use of sub-systems from OEM third parties or open source projects and then integrate them to add value.
This is basic good business sense because you can't economically deliver a working product if you have to invent everything from scratch. It's the same principle that car manufacturers employ when they source tires, headlamps, radios, etc., from someone else.
The DAM Value Chain takes that approach and further de-constructs it so that it is easier for end users to re-model the components that add value to digital assets themselves in a way that more precisely matches their exact needs.
What vendors get out of it is the opportunity to focus their efforts on a tighter range of requirements so they can reduce the time (and cost) spent keeping up with a sprawling neighborhood of other DAM vendors.
The Cloud Makes the DAM Value Chain Achievable
As software moves towards a fully on-line distribution model, the DAM Value Chain becomes a more practical proposition. Both IT departments and end users are growing increasingly comfortable with using Cloud based solutions to either scale up or take advantage of services they previously might have lacked the capital expenditure budgets to afford. These trends will spur the development of DAM Value Chains.
Who Will Provide The DAM Value Chain?
As should be clear, there are two aspects to this value chain concept. The first is easier to understand and is the different service nodes that add value to media in order to transform them into assets. The second is the chain itself -- the means by which an asset traverses between value added service providers.
What is under discussion is an integration framework that uses the existing lower level TCP/IP internet protocol (aka 'Cloud') at its core but also a virtual distributed application infrastructure where everyone who participates agrees a common series of conventions to allow them to exchange data. It needs to be more developed than something relatively low-level and open-ended like XML or REST but still sufficiently scalable to handle the wide variations in functional requirements that characterise modern DAM systems.
There are various standards like CMIS and oData which are in-play in the ECM sector and these could help shape how a DAM Value Chain operates. However, both have been active for several years now but are not actively supported in sufficient numbers in DAM specifically.
In many cases because of the cost of implementing them when compared with actual demand from end users is not justifiable -- especially when many are already engaged in major feature implementation works which customers are telling them are needed. The adoption of these standards is a chicken and egg situation in Digital Asset Management.
I don't think any grand convention of DAM market participants is likely to bring about a meeting of minds either. DAM vendors fight fiercely with each other to preserve and extend their hard-won client lists. There is too much at stake for most to concede anything that might be perceived as a potential advantage to the competition -- this is contributory to why we are in this state in the first place.
A Commercial Solution To A Commercial Problem
Effective DAM Value Chains are likely to become reality through a form of commercial natural selection (and as a result the consequences cannot be favorable for everyone). This means that those who have the clout to make DAM software developers pay attention will be able to encourage vendors to use their value chains rather than continue to try to go it alone.
There are a number of prototypical value chains currently developing now. The common characteristic of them is their existing scale and an increasing realisation that integration is the key commercial challenge that will determine their success. To use a metaphor, they want to provide the track, someone else could supply the trains.
Value chain infrastructure providers can benefit from abstract, aggregated services which encourage vendors to develop value added features. The best will be those that are the most connected and offer a multitude of services for end users to choose from. Service providers will gravitate towards them because that is where customers are and it will be cheaper to use something that exists already is widely supported and shares a common protocol with your own application stack.
So how might this work in practice? There appears to be two developing strands.
One is the well funded "DAM insider" who may acquire a range of different (and potentially competing) solutions then integrate them together via a core infrastructure. Their dominance in the market might encourage component vendors to support their value chain because it opens up a wider range of prospective customers..
The other is a larger Cloud hosting services provider who may offer both an ever-expanding API and a range of services which assist solutions to develop using it. Their interest will encompass many different markets, but DAM vendors may decide that they offers an opportunity to gain an advantage by being among the first to offer a given feature (and later a better option).
If you are a developer, these emerging Cloud platforms offer a core range of services that you do not have to go to the hassle and expense of re-inventing yourself further, you can have some confidence that other solutions will inter-operate with your own.
Which one will be the more successful is not easy to predict and they also might not end up being mutually exclusive either. Both, however, will have the scale and leverage over the market to forge DAM value chains which users and vendors may want to align themselves with.
End Users Become DAM Vendors
Many end users may want to do what DAM system vendors already do a form of now by composing their own custom products from different service providers available on a given DAM Value Chain. However, they also want to avoid most of the technical complexity that usually accompanies the whole software implementation process. Others may be happy for someone else to do the "application packaging" for them, but with the full knowledge that changing from one provider to another is easy to achieve if they need to.
Threats And Opportunities Of DAM Value Chains
These changing market conditions present both threats and opportunities. DAM Value Chains are not currently a feasible option for many end users -- but the situation is changing.
Last year North Plains not only made two significant acquisitions but they also released an integration protocol to improve integration between all of their products in their newly enlarged stable. In January this year, Amazon began to offer trans-coding capabilities in addition to existing workflow services they added last year that run on top of their core AWS API.
Third party vendors like ConceptShare who offer artwork annotation tools are busy making alliances with a range of different DAM vendors who have all realized their product is superior to one they can economically implement in-house.
The threat from this impending market transformation for vendors is failing to acknowledge that they are unlikely to be able to cover every single user requirement and subsequently ending up being side-lined by a more flexible and capable range of alternatives as a result.
The opportunity is to see the writing on the wall for the monolithic single product solution and to prepare for its demise by re-organizing their offerings in a modular way that is more in tune with the aims and objectives of their users.
Image courtesy of Dmitry Naumov (Shutterstock)
Editor's Note: To read more of Ralph's writings on DAM, check out Open Source DAM Solutions - Like Buying a Cake or Buying a Car?