When you say open source and enterprise content management in the same breath, most practitioners probably think of small and medium businesses rather than global enterprises. With today's launch of version 5 of its core ECM product, it appears Alfresco is out to change that.
Or maybe it's better to say it's already started. The open source vendor is cashing in, quite literally, with the growing complexity, rising costs and cloud-centricity of some of the biggest players in the field, notably Microsoft's SharePoint, which has frustrated many of its users with its seemingly unrelenting push to the cloud.
Long an interesting sideshow in the ECM field, Alfresco recently has made major advances, not only in its latest release, but in the business sense as well. The Maidenhead, UK-based company finished FY2014 in February with $64 million in recurring revenue, has grown to 330 worldwide employees, expanded its senior management ranks to establish a Silicon Valley presence and boasts a retention rate of 90 percent among its 1,800 customers. Increasingly, those clients include such big names as BNP Parabas, KLM, Cisco, Verizon, AT&T, Office Depot and more.
"We feel we have things going pretty good, and we're going to continue to grow this," CEO Doug Dennerline, who's been with the company less than two years, told the 400-plus attendees of the company's summit in San Francisco. It will be easier to accomplish now that Alfresco has closed a $45 million financing round, led by SageView Capital.
Dennerline also has help from the company's large community of open source developers. "The community really matters to us," he said. "This conference was just a developer conference -- DevCon -- but we've decided to add our customers to it."
Holding the Course
Dennerline's strategy comes down to doing more of the same, in particular maintaining the company's commitment to hybrid cloud/on-premises products to give customers the flexibility they want to maintain security while expanding access to applications. As for sync and share, Dennerline isn't really worried, citing a survey that found 56 percent of CIOs have banned the products due to security concerns.
"We're architecting our products and strategies so you can keep on-premise what you want on-premise, and you can put in the cloud what you want in the cloud," he said during a company overview that kicked off a two-hour marathon of product demos.
The newest version includes simplified user interfaces -- already a widely recognized strength for Alfresco, improved integration with Outlook and Word, new reporting an analytics features and a major overhaul of its document search tool. The search function will require a re-indexing of content, but should make it simpler to locate documents and other content assets. New DAM features will be added soon, company officials said.
To be sure, executives at the jumbo ECM companies probably aren't losing a lot of sleep yet, in part because Alfresco hasn't yet joined their league with a powerful enterprise sales and marketing team.
Dennis Scanlon, president and COO of Formtek, which builds industrial apps for the ECM market, is a long-time Alfresco partner and clearly sees the challenges ahead. In his view, Alfresco faces a test of its "business maturity" as it tries to compete with top tier ECM vendors for large corporate clients.
"The technology maturity is here. It's really cutting edge, probably some of the best stuff out there," he said. "On the business side, based on its size, their rapid growth rate, who they are and who they have to compete with -- those big guys like SharePoint and Documentum -- it just takes a different business savvy.
"That comes from working enterprise deals and satisfying enterprise clients. They have mission critical, 24/7/365, fail-safe application requirements," he said.
Simpler Than SharePoint
John Maguire, a newbie to Alfresco, came to the summit on a mission to explore alternatives to SharePoint for his company. He was quickly attracted to how simple Alfresco is to use compared to the notoriously complex Microsoft product.
"We're really looking for cost reductions more than anything. We're very familiar and very comfortable with SharePoint. I think it has a very rich feature set," said Maguire, principal web administrator at Rockwell-Collins. "We're looking for alternatives that might provide similar or better functionality at lower cost."
And that's exactly the kind of prospect that Dennerline and company are seeking.