Only a week after Forrester’s Wave for Enterprise CMS, Gartner has published its Magic Quadrant for Enterprise Content Management. If the Wave describes a market that is healthy but segmenting, Gartner describes one that is growing with vendors forced to cater to demands for mobile and cloud capabilities as well as functionality for specific verticals.
ECM Market Evolves
It also notes the emergence of lightweight cloud environments as vendors try to keep their clients from exploring the increasingly diverse functionality of some of the cloud-based file sharing environments that are quick to deploy and relatively cheap.
How this evolves over the coming year remains to be seen. That said, this year’s Magic Quadrant for Enterprise Content Management points to ongoing growth in the space with a current value of US$ 4.7 billion annually on the back of a 7.2% expansion over the course of last year.
The Quadrant also points to a dynamic IT market and identifies 23 vendors that have fulfilled the criteria for entry into the Magic Quadrant. It is worth noting here that 14 of those vendors were included in the Niche Quadrant and 6 in the Leader’s Quadrant.
The number of vendors in the Niche Quadrant would seem to concur with Forrester’s conclusion that the market is segmenting and that many vendors are creating, or exploiting, their own corner of the market in a specific vertical, or product areas.
That is, of course, with the exception of the Leaders who, as in other Magic Quadrants, cover the entire range of functionality. This year’s Leaders, in alphabetical order, are as follows: EMC, Hyland Software, IBM, Microsoft, OpenText and Perceptive.
Oracle was the sole entry in the Challengers’ Quadrant, while Alfresco and Xerox were the only Visionaries. The other vendors all fell into the Niche Players Quadrant. HP was added this year based on the functionality that it obtained through the Autonomy acquisition.
Today, in the first of a two-part look at the Magic Quadrant we will take a deeper look at the Leaders’ Quadrant, while later in the week we will look at the 14 vendors who made it into the Niche Quadrant.
To understand what is happening in the market, Gartner has analyzed the enterprise content management (ECM) market from two different perspectives, which, it says, characterizes the market now:
- A strategic approach where ECM offers enterprises the possibility of controlling their content, enabling collaboration and making information easier to share.
- As a software toolset and set of applications that offer content lifecycle management.
From either perspective, ECM core components consist of:
- Document management: All aspects of managing documents in the enterprise from security management to library services, version control and even content replication.
- Image-processing applications: Offers users the ability to capture data and manage information from paper documents.
- Workflow/business process management (BPM): Applications for routing content into business processes.
- Records management: Long-term retention and management of key documents through automation and policies to ensure legal and regulatory compliance.
- Web content management (WCM): The management of content and the overall Web experience of users through specific management tools built around a core content repository.
- Social content: Enables document sharing, collaboration, knowledge management and project team support. Also includes social tools like blogs and wikis.
- Extended components: This can, and ideally does, include components like document composition, e-signature, search, content and analytics.
For the purposes of this Magic Quadrant, Gartner has given each of the elements different weighting depending on their importance for users. This year the weighting is as follows:
- Document management: 15%
- Image-processing applications: 18%
- Workflow/BPM: 22%
- Records management: 13%
- WCM: 7%
- Social content: 15%
- Extended components: 10%
To be included in the Quadrant in the first place is quite a feat. For 23 vendors to make it in demonstrates just how dynamic the market is. For inclusion this year, vendors must:
- Show at least US$ 10 million in annual content management revenues
- Have a product footprint in at least 2 major regions
- Have ECM software available commercially and references that can vouch for that
- Produce a suite that has at least 4 components listed above supplied natively
ECM Leaders Quadrant
On top of that, the Leaders must be able to show that they have a clearly articulated vision for the future of ECM and that they have a strong channel partner base to push that vision forward. They must also provide the majority of components in one suite as well as the ability to integrate with other business applications.
The newly released Documentum 7 has revitalized EMC’s content management strategy, Gartner says, with new features to improve usability, scalability and reduce overall costs. It still has its eyes on the cloud with EMC OnDemand, and file sharing and sync through its Syncplicity offering.
- Strengths: It offers full functionality and includes all the core ECM elements, including capture, process management and records management. A strong solution for the life sciences, EMC is working with partners to extend its reach into other areas. Its cloud offerings are well developed and more mature than those of its competitors.
- Cautions: Even with its strong focus on cloud computing, it needs to address additional cloud delivery options to include public cloud offerings that will result in lower costs. Documentum is expensive and complex, with services that are challenging for some. It needs to broaden its social content management capabilities.
Still up there after all these years, Hyland has maintained its position through a strong focus on vertical and horizontal solutions. Best known in the mid-market, it is digging deeper into the large enterprise space, especially in healthcare. It has pursued growth through organic product evolution and acquisitions.
- Strengths: Has strong integration capabilities with ERP and other line-of business applications, while OnBase 12 and the newly released OnBase 13 enable access to 80% of OnBase through Outlook. It is highly scalable and has achieved considerable success in the healthcare and education verticals.
- Cautions: Hyland needs to expand its international presence, particularly in Europe and the Asia/ Pacific region, along with its portfolio of partners. It also needs to market its cloud offerings better and risks being classified as “old school” by buyers who are starting to consider cloud deployments.
In terms of ECM revenues, IBM is the market leader with a focus on high-value use cases, particularly for transactional content and social content management. Its current strategy targets the intersection of social, mobile and content management.
- Strengths: IBM is taking steps to reduce complexity and improve user friendliness for business users through a new universal UI. It has also managed to reduce deployment times. It continues to develop its portfolio with a solution that cuts across silo boundaries. Its international reach enables it to support multinational enterprises in established and emerging markets.
- Cautions: It lacks a specific cloud strategy that is ECM focused at a time when Gartner says demand for cloud ECM offerings are on the rise. Many reference customers have expressed confusion about the product roadmaps, Gartner says. It also needs to continue work on breaking down the silos and has too many content management and related repositories.
If SharePoint established Microsoft in the ECM space with the 2007 edition, it has continued to develop those capabilities with the release of 2010 and 2013. It has also now gained traction with its Online edition in Office 365, ensuring strong market penetration everywhere.
- Strengths: Microsoft has built an enormous ecosystem around SharePoint with many third-party vendors now offering extensions and integrators for SharePoint. It has a strong place in many enterprise environments while the 2013 edition has improved on many areas of perceived weakness like search and social interaction. Microsoft has also indicated that it will continue to invest in ECM capabilities.
- Cautions: Once installed, enterprises often find it difficult to convince workers to adopt it with usability and change management a concern for many deployments. Some users still report to being disappointed with functionality especially mobile support and workflows. The SharePoint Online model may be pushing some users faster than they want to go.
One of the best-known ECM vendors on the market now, OpenText has extended its reach in the enterprise information management space through acquisitions, the most recent of which is Cordys. The acquisition strategy has added new technologies that has ensured its market position.
- Strengths: OpenText has one of the broadest content management portfolios in the market and continues to build with new products and services. Its reseller program with SAP gives it a strong sales channel and many opportunities for big enterprise deals. It continues to develop applications on the back of previous acquisitions.
- Cautions: Its acquisition strategy has provided many interesting products, but has also resulted in many overlaps in functional areas like document management and records management. Acquisitions of Global 360, Metastorm and Cordys have created confusion among customers about its process software.
Perceptive is a standalone company that was bought by Lexmark 3 years ago. Perceptive has continued to grow its imaging document repository and workflow capabilities with advanced recognition, search, BPM and process analytics. Its strong execution and customer focus has pushed it from the Challengers’ Quadrant to the Leaders’ Quadrant.
- Strengths: Perceptive continues to focus on horizontal and vertical solutions, particularly for the healthcare and higher education space. Reference customers say they are generally satisfied with the product. It has continued to build its core functionality with acquisitions and has a growing international presence. It also continues to develop its channel partnerships.
- Cautions: It needs to better articulate its roadmap and strategy for acquired companies and their products. Some companies that Gartner has talked to say the portfolio is getting very complex. Lexmark and Perceptive have yet to deliver on possible synergies between hardware devices and software, although joint capture solutions are in the works.
Those are the Leaders’ in the Magic Quadrant for ECM this year. Later in the week, we will look at vendors outside the Leaders’ quadrant.