Four years ago I predicted innovation in the DAM industry would suffer because so many digital asset management (DAM) solutions were monolithic and overburdened with features. Vendors of these solutions would find themselves too busy keeping these applications up and running to find the time to innovate.
In the intervening years the DAM industry, as predicted, has stagnated. Innovation has all but dried up.
Most vendor releases either focus on stabilization, act as corrections to earlier over-exuberance in bolting on as many new features as possible ('the features arms race'), or depend on unreliable gimmicks like AI visual recognition. The most useful additions have been architectural changes such as APIs, scripting facilities, hooks and more enhanced metadata modeling.
Looking for DAM Innovation in All the Wrong Places
The famous Henry Ford misquote, "if I had asked people what they wanted, they would have said faster horses" applies here.
Vendors have tried listening to their customers for inspiration, who in turn have waited for the vendors to do the same thing, leaving the room marked "DAM Innovation" in a state of awkward silence.
To run a successful tech business, you have to both take some calculated risks with innovations and hedge them off by listening closely to customers very soon after committing capital to your positions. While I am less enamored of Steve Jobs than many, he was better at this strategy than most in the tech industry (and certainly better than all current DAM vendors are).
At the time I wrote about the innovation issue in DAM, I proposed a model for the DAM industry which acted more as a supply or value chain, where components could be loosely assembled from multiple vendors. This would allow users to more easily select the elements best suited for their requirements, while vendors could pick and choose their specializations rather than having to duplicate everything offered by their competitors.
The feedback I received at the time was that the idea was interesting, but unlikely to become reality, in part because the vendors all mistrusted each other (a point I will return to later).
Signs the DAM Software Market Is Changing
But there's hope. A few underlying trends suggest some quite major changes are going to take place in the DAM software market. These will upset the status quo and end the uneasy truce which allows over 200 firms to offer simultaneously independent and yet very similar (but still incompatible) DAM systems.
In the rest of this article I will present some evidence to support my case.
Cloud Microservices Architectures
We have been discussing microservices for some time, along with Service Oriented Architecture (SOA) which is not the same, but has similar design objectives.
The simplified definition is they are application components which can be called up independently and without necessarily requiring all the other elements of an application — in other words, they are modular and you don't need to buy a whole set of them from the same people.
When discussing initiatives in this area with a number of vendors, an interesting trend has come up. A number of vendors are actively considering marketing these microservices independently of the rest of their platform and potentially to other firms too. Once a few firms start using this model, the momentum will make it more difficult for other vendors not to participate. Otherwise they run the risk of being deemed 'inflexible' or 'unresponsive.'
Greater Price Competition
A number of stripped down 'DAM Lite' systems have been released over recent years (including some that are now entirely free).
Two factors drove this direction: first, the over-supply of solutions. As mentioned earlier, at least 200 content DAM systems are currently available (and the likely total figure is three times that amount). This means buyers have an over-abundance of choice, but it's a choice between very similar solutions in terms of functionality.
Instead of innovation, vendors are using discounting as a differentiation strategy. Users' initial reviews of these free solutions are mixed. It's hard to say how this trend will play out, whether customers will be encouraged to upgrade to non-free editions or if the freemium solutions reduce revenue as more users decide not to bother with the paid-for tier.
When working with clients, I often hear price is less of an issue than many vendors imagine. More often than not, end users care about how they can generate the maximum ROI from the budget they have for a solution. Cost is still a factor, since no one has limitless funds, but if the business case is strong enough, the funds will be found somewhere.
What most enterprise DAM users really want is the ability to select only the components they need. The issue is less about price and more about being able to manage and fine-tune the nature of the value DAM solutions can create for them.
Completely free DAM solutions miss this point. It doesn't matter how cheap they are, if end-users can't see a way to get what they require from a given product, they won't use it.
Growing Importance of Digital Asset Supply Chains
Digital asset supply chains have rapidly moved up the agenda in many recent DAM initiatives. An increasing number of end users want the ability to make executive decisions on how all the moving parts of their digital asset operations will fit together and to have visibility as to where assets are arriving, how value is added to them and where they go.
Where once this would have been left entirely in the hands of the vendor, now more end users want to influence these decisions and have vendors act in more of a consultative capacity to help them achieve their goals. This point connects with the activity in microservices: the days of DAM users tolerating having to use a single supplier for the whole value chain are ending. Those firms who are unwilling to be flexible and adapt their delivery model to suit are going to be increasingly side-lined.
The Rise of Blockchain and Decentralized Applications
While blockchains might at one time have been considered the exclusive realm of Bitcoin and other cryptographic digital assets, innovations like smart contracts and distributed applications are now employed for a far wider array of uses than just payments. Rather than "internet of money," a better description might be "transactional internet."
Two issues made the original DAM Value Chain concept difficult to realize: a lack of interoperability standards and a lack of trust between vendors. A third subsidiary problem was where digital asset data would be held.
The current cloud delivery model only partially solve this problem by hosting on a third-party cloud hosting provider. Those entities will only take instructions from whoever pays the bill. And in most cases, that isn't the client end-user of a DAM solution, but the vendor, who has a role more like a channel partner or reseller.
Blockchains are the missing link that make it more feasible to deliver DAM Value Chain. They can hold data within each transaction block (hence the 'block' part of the name) but are distributed, redundant and immutable (i.e. once the data is added to them, it is replicated across multiple nodes and cannot be deleted).
This can help solve the trust issue between end users and Digital Asset services suppliers, because the data block is owned by the end user, while the access protocol remains as simple to implement as current cloud techniques.
The blockchain technology stack is more advanced than many have yet to understand. Smart contracts provide 'procedural logic' (i.e. computer programs) which can trigger when certain events occur. Many now also include distributed and highly redundant file storage facilities. This makes them similar to enterprise databases and operating systems, but without a 'gatekeeper' such as an IT department or jealous vendor who might be unwilling to collaborate with potential competitors.
Wholesale migration from legacy cloud delivery models to blockchain ones is likely to be years, if not decades away. However, the ability to conduct transactions (of any nature, not just financial ones) will lead to their gradual adoption as people gain a greater understanding of the benefits they offer and the capabilities of the underlying technology.
Proposing a Digital Asset Services Exchange
Astute readers may have noted I mentioned the interoperability problem in the preceding section without addressing it. The major issue preventing progress towards frictionless DAM Value Chains is a lack of willingness by those in DAM to agree to interoperability standards. The chief reason for this is they currently do not see any commercial necessity to do so.
All vendors do not think this way. An increasing number are seeing how having a stake in interoperability protocols benefit and provide value for their firms. However, no one is leading the way and all attempts to establish one thus far have fallen away.
One factor that would make more market participants pay greater attention is money. A model which could put some financial weight behind both DAM Value Chains and interoperability standards is the creation of a Digital Asset Services Exchange. This would utilize microservices, blockchains and the demand for transparent digital asset supply chains to create a venue where DAM services suppliers and users could transact with each other in a decentralized fashion.
A common feature of many trading exchanges is the use of standardized contracts, where counterparties do not need to negotiate a custom agreement to do business. The logic is simple: you adhere to the rules, or you can't buy or sell. Interoperability is a byproduct of participation.
Although these protocols are standardized, they still will in cases get quite complex. Some scenarios may arise where they are unsuitable and require an alternative off-exchange method. With that said, this is far more likely to bring about interoperability standards than any other idea I have heard to date.
End users will probably not want to get involved in the minutiae of setting up arrangements with service providers (although they will want the option to do so if deemed necessary). As such, a further by-product of an innovation like a DAM Services Exchange is the appearance of vendors who specialise exclusively in providing front-end interfaces which use services built by someone else.
A number of DAM commentators have predicted the de-coupling of the back and front-ends of DAM solutions. From an end-user perspective it is what might be termed the 'killer app' of a DAM Services Exchange and its underlying DAM Value Chain. Noting the section about free DAM solutions earlier, I would expect most of these front-ends to be offered without charge. Those who provide them will earn their fees by acting as intermediaries between the service providers and end-users.
Time to Make a Move
The last five years I've watched the pieces of the original DAM Value Chain concept begin to fall into place. Now, however, is the time to act so it might develop into something more tangible. I invite those who share my opinion to contact me to continue this discussion and investigate the emerging opportunities for digital assets.