While many analysts have remarked on fragmentation of the enterprise content management market, Gartner’s recently published Magic Quadrant for ECM has not only identified how and where that fragmentation has played out, but also how it will carry into 2011 and beyond.
To be clear about this, by fragmentation we are talking about the increasing number of new products available from vendors and how those products cover core functionality.
Gartner (news, site) is keen to stress that while the report provides a snapshot of the market in 2009, analyzing vendor movement from one quadrant to another in relation to previous years is futile because of changing market conditions.
In monetary terms first of all, the ECM market grew by 4.8% over the last year despite global economic conditions with global ECM revenues of US$ 3.5 billion in 2009. Between now and 2014 it is expected to grow at a compound rate of 10.1% annually starting this year until 2014 when it is expected to be worth US$ 5.7 billion globally.
ECM Focus Areas
Within that market, Gartner has identified four main focus areas based on vendor’s products. These areas include:
- Transactional content management
- Social content management,
- Online channel optimization
- Content management as infrastructure
Whether vendors cover one or four of these different functional areas, the purpose of deployment is to extend content governance across the enterprise. ECM suites are still relevant, but with changing business focus they are not necessarily the best option to meet new challenges. Let’s take a quick look:
1. Transactional content management (TCM)
TCM focuses on imaging, workflow, business process management, e-forms, compliance and archiving, and records management. At the moment, content in this category is static rather than dynamic.
2. Social content management
Recent Gartner research showed that 31% of enterprises regularly use social media tools and social networking sites, with 52% increasing budgets for social media tools and collaboration software in 2010.
3. Online channel optimization
This group of solutions focus on Web channel technologies including WCM, DAM, portals, electronic forms, Web and content analytics, social software and XML authoring amongst others, along with mobile device support.
4. Content management as infrastructure
Infrastructure vendors that embed content management into their technology stacks. Increasingly, they are becoming infrastructure platforms for supporting multiple composite content applications.
Within those four categories there is a list of applications that enterprises will be focusing over the next year. These include:
- Legacy information management: Applications to manage the vast amount of content stored in existing repositories. By 2013, integrated content archiving products will dominate this area.
- Search and content analytics: These applications run in tandem with legacy content management applications. They make data, and particularly unstructured data, searchable and accessible.
- CCAs/Case Management: Composite Content Application (CCA) describes frameworks and templates for specific processes built on ECM or BPM platforms.
- E-Discovery: Many enterprises have started investing in ECM’s based on e-Discovery needs. What often starts as a once-off project turns into a new strategy focusing on content management.
- Shared Services: Gartner predicts a growth in the use of cloud-hosted and rented on-premise ECM platforms that will be managed by outsourcers and open-source software.
- Cloud Content: Cloud content management, driven by cost savings, is only beginning to have an effect, but its use will grow in the coming years.
Magic Quadrant Criteria
There were six different vendors that made it into the Leaders Quadrant this year. Inclusion in the Quadrant required that vendors met the following criteria:
- At least US$ 10 million in revenues from content management revenues, or US$ 10 million or more in subscriptions for open source vendors
- Market products in two geographic regions
- ECM software commercially available
- An ECM suite with at least four core native components
Leaders are defined as those vendors that are prepared for future developments with a clearly outlined future strategy. They have suites that offer direct delivery of the majority of core components.
ECM Magic Quadrant
The Leaders in alphabetical order are:
EMC's (news, site) new Information Intelligence Group has changed since 2009's Magic Quadrant by building momentum for Documentum xCelerated Composition Platform (xCP), enhancing SourceOne with the Kazeon e-discovery acquisition and partnering with SAP.
- Strengths: Its stack contains a range of complementary products amongst which capture, process management, document composition and the core repository are particularly strong. Well placed to serve “on-ramps” demand with a strong risk management element.
- Cautions: Recent product introductions and new business strategy has yet to show gains. The Documentum family business is being eroded by perceived cost and complexity issues.
Hyland's (news, site) focus on the mid-market and clear vision has resulted in double-digit growth of its installed base fuelled by its SaaS product and acquisitions.
- Strengths: Happy customers. It has had considerable success with both on-premise and SaaS deployments, and is expanding its international data centers resulting in increased demand in EMEA and Asia/Pacific.
- Cautions: It needs to build verticals partner ecosystem to see off competition from SharePoint and its document capture and workflow partners. It is still a mid-sized company with limited international footprint compared to ECM infrastructure vendors.
IBM (news, site) software portfolio meets the needs of organizations across a broad range of content types as well as a content management infrastructure to support wider enterprise information management.
- Strengths: Its international reach along with direct sales and channel partners has ensured it remains the biggest ECM vendor. Production imaging and document-centric workflows support its strategy of advanced case management. Its Smart Archive Strategy provides unified archiving.
- Cautions: Gartner reports user frustration with its complex product portfolio and the need for services to deploy products. Its size prevents it from reacting quickly to increased demand for support for role-based clients. It is losing ground to lower-cost transactional content management vendors.
Microsoft (news, site) has a high degree of market penetration for SharePoint with momentum continuing around the SharePoint 2010 release. The interdependence of SharePoint, Office, Exchange and SQL Server has ensured it has maintained its position as provider of the most widely document- and collaboration-centered application platform
- Strengths: SharePoint 2010 goes beyond basic content management into portal, search and collaboration technologies. Its position as a stack vendor has resulted in a large ecosystem. SharePoint has focused many enterprises on ECM.
- Cautions: Organizations with earlier versions of SharePoint face difficulties migrating to SharePoint 2010, which has problems with records management and archiving. Even with improvements, users are still looking for improvements in deployment management and replication functionality.
Open Text (news, site) as the largest pure-play vendor in the market has pursued its ECM strategy with acquisitions while its relationship with Microsoft and SAP are at the heart of its strategy of providing ECM’s that work with both.
- Strengths: It has many CCAs for vertical markets while its reseller agreement with SAP has expanded the scope of its market reach. Its ECM Suite provides a complete set of ECM technologies.
- Cautions: It needs to rationalize its product portfolio quicker and provide migration paths for products that have reached the end of their lifecycles. SharePoint could also hit its revenue stream.
Oracle’s (news, site) ECM footprint is growing as it continues to build content management functionality into its enterprise business applications. With the release of 11g this year, it offered tighter integration with Fusion Middleware products.
- Strengths: UCM 11g is a well-integrated suite that provides integration with its other applications. It has significant support organizations providing opportunities to grow its content management business and increase market share.
- Caution: Oracle is only beginning to implement Web 2.0 collaboration capabilities across its ECM products through WebCenter Suite 11g, which is promising but immature. Mid-market customers find Oracle’s ECM too expensive for content management due to software and service costs.
Next check out the ECM Magic Quadrant visionaries and see what impact they are having in the market.