Consolidation in the Enterprise Content Management Industry - Who Will Be Next - Autonomy or Open Text? Part I

Since my old company, Document Sciences, was bought by EMC, I have been following the Enterprise Content Management market closely; The Fortune 500 have invested billions of dollars in databases and ERP technologies leading to multi-billion dollar franchises such as Oracle, SAP, etc. focused on the structured data world.

However, the next frontier of productivity will come from the unstructured data that includes your emails, you-tube videos, word document, power point presentations, pictures, etc.

According to various industry researches, unstructured data accounts for over 80% of corporate information. There are many technologies and tools aimed at finding, storing and managing the unstructured data which has been gaining traction such as enterprise content management, enterprise search, information access, business intelligence to name a few.

The Enterprise Content Management (ECM) market for example is about $3.8B growing in low double digits. Thanks to these ECM technologies CIOs now can bridge the structured and the unstructured data to create a Unified Information World (UIW) which can help drive significant productivity gains for knowledge workers. Large IT vendors — IBM, EMC, and Oracle — have been acquiring ECM companies to capitalize on the UIW for some time. For example, EMC bought Document, Legato, Captiva and my old company Document Sciences.

There are two of the largest, independent ECM vendors — Autonomy and Open Text — consolidating the market trying to reach the billion-dollar mark while also competing with the upcoming versions of SharePoint by Microsoft. Microsoft Windows SharePoint Services (WSS) provides rudimentary DM functionality, available with Windows Server at no additional cost.

This no-cost option has generated widespread experimentation with WSS as a DM solution. Commoditization at the low-end of the ECM market by Microsoft has forced my traditional ECM vendors to move toward solutions and industry-specific offerings. Having been a Chief Marketing Officer in the industry, I can honestly say that most of these vendors and their founding CEOs don’t have any interest or appreciation or competency in vertical solutions. Most of them are deeply in love with their technologies proudly broadcasting their specs to CIOs, which don’t really care much about it.

Autonomy, the indisputable technology king of the enterprise search sector has recently bought Interwoven, an ECM vendor for $775M. I already published a detailed analysis on the acquisition and its likely impact on the future of the industry. They have an end-to-end platform to pursue new applications such as meaning-based marketing (Interwoven’s deep strengths in Web content management (WCM) through TeamSite product) and legal and compliance management (Interwoven WorkSite, which according to Forrester is the best-kept secret in document management).

Interwoven had merged with iManage, a provider of collaborative document management products, in late 2003. iManage provided Interwoven with not only document management (DM) products but more than 1,300 customers and a strong installed base in law firms. Now Autonomy will target iManage client base with a great value proposition of a more powerful search engine front-end – The Intelligent Data Operating Layer (IDOL).

Regulatory is still significant driver in all sectors, including pharmaceuticals, manufacturing, professional services, media and technology leading to Fortune 500 deploying capabilities in archiving, eDiscovery, and information governance. As Regulators keep promising hard hitting new rules and hefty sanctions coupled with increased complexity of rules across multiple jurisdictions, I don’t expect slow-down in sales cycles or pricing or margin pressure.

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Tags: acquisitions, autonomy, document management, enterprise cms, interwoven, open text, search, vignette

Since my old company, Document Sciences, was bought by EMC, I have been following the Enterprise Content Management market closely; The Fortune 500 have invested billions of dollars in databases and ERP technologies leading to multi-billion dollar franchises such as Oracle, SAP, etc. focused on the structured data world.

However, the next frontier of productivity will come from the unstructured data that includes your emails, you-tube videos, word document, power point presentations, pictures, etc.