Fireworks may explode in the night sky as the US celebrates the Fourth ofJuly weekend, but things are much quieter in the web content management market.
The frenetic pace of nine-figure WCM acquisitions of the past four yearsended before Christmas, and the once-deep river of venture capital funding forfledgling players ran dry long ago.
Market shifts and technology trends -- the somewhat surprising strength ofmobile, the stampede to Software-as-a-Service (SaaS), a growing infatuation with digital marketing --were missed by many players, leaving the field "fragmented" and"troubled," according to fresh research by Matt Mullen and Alan Pelz-Sharpeat 451 Research.
As of now, they estimated, "WCM is only about $1.5 billion in size as astand-alone market, has slow-to-neutral growth and is not likely to growsignificantly over the coming years."
That could be worrisome for companies like Oracle, which paid $160 millionfor FatWire back in 2011, or SDL, which bet $107 million onAlterian the same year. Those were just two of the 10 deals the analysts listedbetween 2010 and 2013 based on faith that the market was poised for rapidgrowth.
VCs and corporate investors were just as zealous, shoveling $118.6 million into Acquia alone and pushing tens of millions more into CrownPeak,DotNetNuke, CoreMedia, Telerik, Ektron, TerminalFour, eZ Systems and others. As isthe nature of venture investing, much of that cash flowed earlier, between 1999and 2007.
"In some cases, VC investments are unlikely to be returned via acash-rich sales or IPO," said the authors, "and finding another roundof outside investment is going to be difficult for many smaller vendors in thespace."
It's not that the market is dead.
The customer basesof some vendors could attract investment from larger players looking for newmarkets, a few vendors are doing well and at least three firms have emerged asleaders in innovation, according to the 451 report.
HP Autonomy is finding new interest in its Interwoven line, the product of a$775 million 2009 acquisition by then independent Autonomy. TerminalFour is finding demand in the higher education market.
Telerik sees demand for itsweb development tools, and CrownPeak -- the original Web CMS SaaS vendor -- is alsoseeing a nice uptick in sales, the analysts wrote.
Version 6.0 of Adobe's Experience Manager, which grew on the 2010 acquisitionof Day Software, supports three deployment scenarios -- on premises, on demandand dedicated managed.
"The not inconsiderable task of managing thediffering deployment methods with a single set of source code (and, therefore,the same set of common functionality regardless of method) is now complete,giving the company a far simpler implementation path for future versions of AEM,"the paper said.
Sitecore has adapted to the market by turning to so-called"brown-field" sites. "It focuses its efforts upon SMB andenterprise firms with complicated first-generation WCM systems in need ofrenewal and upgrade. It wins out against its competitors due to its ability andwillingness to work with and integrate the multiple legacy applications thatcustomers typically have," according to the analysts.
Acquia, a commercial version of the open source Drupal platform, has targetedinstallations of OpenText and HP Autonomy, and has also had luck in convertingolder users to the cloud version of its product. With an update of the Drupalcore code expected soon -- the exact time is difficult to predict with opensource products -- most Acquia modules that sit on Drupal will need to berewritten.
"The 'ready when its ready' roadmap is challenging forenterprises that need predictability on when an how they will be required tospend their IT services budgets," Mullen and Pelz-Sharpe wrote.
Still, challenges remain.
"There will always be a need for Web CMS," the analysts said. "Butover time, there is going to be a much bigger need for enterprise-gradeprocess-driven products that leverage digital asset management, personalization,e-commerce and BPM -- situations in which WCM is simply a mechanism for exposingcontent."