At the same as Enterprise Content Management Provider Vignette is reporting lower expected earnings partially from a decrease in spending in the North American market, open source enterprise content management provider Alfresco is announcing a financial rock solid end to 2007. And 2008 is looking even brighter.
With customer booking growth over 320% year-on-year with over 400 enterprise accounts and more than 30,000 active deployments worldwide, one has to wonder what are these guys doing that vendors like Vignette aren’t.
Not really understanding the 320% growth stat, we asked Matt Asay, General Manager and Vice President, Americas for Alfresco to help us understand the numbers a little better. And explain he did.
“In our first year in business we did a significant amount of sales, and then more than tripled that in 2007. Put it this way: If we continue to grow according to plan (and we've yet to have a quarter where we didn't exceed our plan), then within two years we'll be at a run rate that will solidly support an IPO.”
It took ECM vendor Documentum years to achieve this level of market penetration according to John Newton, Alfresco co-founder and co-founder of Documentum. Now that's impressive.
“Our fiscal year 2007 has seen dramatic gains and we have exceeded goals on all fronts,” said John Powell, CEO, Alfresco Software. “High download figures and great customer momentum are both clear indications that end-users view Alfresco as a credible alternative to legacy, 1990’s proprietary vendors.
We also asked Matt how Alfresco broke down the number of 30,000 active deployments. This was a tougher question for him, “We don't actually know, which is one of the blessings and curses of open source. I would guess that it follows our DM/WCM distinction with WCM perhaps gaining more rapidly in our Community deployments, which will soon translate into those additional paid Enterprise deployments seen above.”
With roughly 30,000 to 40,000 downloads per month, Matt says that a significant number turn into qualified leads for Enterprise versions.
2007 was definitely a big year for Alfresco. They launched their Web Content Management product which attracted some top notch clients the likes of who included Sony Pictures Imageworks Interactive.
They also surpassed the one million software download mark and saw their community membership grow to over 45,000 members. Of course we were curious: what was their big seller in 2007? “ECM/DM has been our biggest seller to date, which is not surprising because it's the product we've been selling the longest (since November 2005), but WCM is rapidly gaining,” Matt said.
In addition, he told us that WCM was 25% of Alfresco's business last quarter. He expects to see this products share to increase to at least 50% over the next few quarters. “We'll also see a blending of our WCM/DM products with our collaboration-focused, 3.0 release due out later this year.”
Apparently, there are some interesting companies swapping out products like Vignette and Interwoven for Alfresco. So that's where Vignette's sales are going!
In his blog on the Alfresco Financial results, Matt writes, “We routinely close six-figure deals with a relatively junior “inside sales” team…in 90 to 120 days (start to finish - that's the sales cycle). The software sells itself, to a degree.” And they do this, he says, through communications like email, phone and Adobe Acrobat Connect – they “almost never get on a plane to nurture or close a deal”.
It’s important to note that Alfresco is the only open source ECM vendor to make the Forrester Wave™: Enterprise Content Management Suites, Q4 2007 list. According to Kyle McNabb, Forrester Analyst, “Embracing Web 2.0 tools, using representational state transfer (REST), together with tackling document management, imaging, content archiving, records management and Web content management (WCM), make Alfresco a real ECM suites contender.”
Matt also notes that “open source offers an exceptional way for all software vendors to make money without sacrificing the well-being of their customers along the way. It is, quite simply, a better way to develop and distribute software.”
He may well have something there. Although it’s highly unlikely we’ll ever see the likes of Microsoft subscribe to a truly open source model, we do see inklings in their CodePlex community for products like SharePoint.
Maybe Vignette needs to take a page from Alfresco and re-evaluate their approach to doing business.