This may be old news to some of you, but the big boys are dying a slow and painful death. CMS vendors are an endangered species as OpenText (formally Vignette) , Autonomy (formally Interwoven) and, to a lesser extent, Documentum are experiencing the effects of a disruption of their marketplace. As a result, there are some big existential questions for them.
Disillusionment at the Enterprise Level
I personally have talked with several technology owners at some of the biggest and most successful companies in the world and every one of them feels the same way: Paying big license fees for enterprise content management makes no rational business sense. Content Management Systems and their vendors have become roughly analogous to mobile phones, sans my beloved iPhone, and the wireless carriers in that nobody loves (or even likes) what they've got. They merely tolerate them and fantasize about switching the flaws they have now for some other set of flaws that seem better than the ones that they deal with every day. While all these owners feel the same way, many of them are at different stages of acceptance around this and are diverging in how they are responding to the realization of the lack of money flowing into enterprise CMS vendors:
- Some have already jumped ship and are using right-sized vendors. This is where the "second tier" lower-license-cost players are thriving (but I would argue that it is not for long). I have seen a number of enterprises, big and small, shelve their investments in enterprise CMS and flock to hungry "little" guys as the business partners are finally coming to realize that more functionality doesn't necessarily equal a solution to the problems of creating, controlling and curating content.
- Some have flocked to open source. Drupal, Joomla and Wordpress are the winners in terms of adoption; however, the money here is going to flow to companies such as Acquia that host Drupal solutions for the enterprises. Acquia seems to understand the current trend to push this out of the hands and heads of the overburdened IT operations shops and into the cloud at large.
- Some are still planning a response. Many big enterprises are more deliberate in their IT platform shifts and are engaging Enterprise Architecture or outside consultants and analysts to do a full-scale platform evaluation. This approach has many tradeoffs with the big positive being a thoughtful understanding of both where the market is heading and how well the current offerings are aligned with the needs of their customers and users.
The Noticeable Open Source Omission
You may have noticed that my open source list left out the big name: Alfresco. While Alfresco is a clear player in the open-source market, I don't believe it is well positioned because it doesn't have a defendable differentiator within the space of enterprise CMS.
Open-source, you say? Standards-compliant, you say? Sure, these are perceived, and to a questionable amount valuable differentiators, but they are clearly not defendable. As the other enterprise CMS vendors adapt to the marketplace, open source will no longer be a perceived differentiator because:
- Hosted solutions will become the norm
- The other enterprise vendors are bound to "get it" and open up their source code as well
- More buyers will be savvy enough to understand that open-source does not equal free
Zombieland Rule #18: Limber Up
Herein lies the crucial point: This adaptation is what will differentiate the dead men walking from the walking dead. The vendors that refuse to understand the shift in the marketplace are "dead men walking" and the ones who embrace it will be "the walking dead." Will the walking dead be soulless zombies ambling through our world eating out the brains of anyone who either can't run fast enough or neglected learning the rules of escaping zombies? No, nothing so dramatic; those who adapt will shed their old way of life for a new one and will shed the artifacts and behaviors that no longer have any value in the new marketplace.
Care for an example? Take free community edition in an open-source model. In the new world where customers just don't look at function overload as a valuable asset, the real differentiators are going to be professional services and how easy (read cheap) it is to find developers and architects. Drupal architects are now easier to come by than Vignette architects! Nobody, and I mean nobody, wants a system where the starting price for a specialized architect starts north of $180 an hour. Being open source and having a simpler product has actually created a competitive advantage for Drupal, in that the marketplace for Drupal talent is thriving and reasonably priced.
What's been both painful and amusing to watch is the complete converse of this dynamic: All the paid CMS vendors have a horrendous track record in delivering professional services! The prices are exorbitant, especially when you throw in travel, and the level of responsiveness approaches that of the mobile carriers. Like most every marketplace that has undergone a significant disruption, those that adapt will stay relevant and those that don't will shuffle off this mortal coil.
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