Covering convergence

As companies wake up to the need to address their information-management requirements with one integrated strategy, major technology providers are aligning their product offerings in a bid to meet this trend. Layisha Laypang finds out where the industry is heading and what solution providers are doing to ensure they stay ahead of the game.

The merger of CM Focus with sister publication Intranet Strategist has been a response to recent developments within the content-management and portal markets. As companies realise the need to develop and implement a comprehensive strategy to address their information-management needs, solution providers are scrambling to add functionality to their existing product offerings, blurring the lines between what were once standalone solutions. The result has been industry consolidation, technology partnerships and an influx of new and improved products, as technology providers strive to secure their place in the market.

One of the fundamental challenges for solution providers determined to survive in this increasingly competitive landscape has been to identify the key business issues related to accessing and delivering enterprise content, and to assess how these issues might develop in the future. According to Alan Pelz-Sharpe, vice president of software and services at Ovum: “At the moment, it’s pretty basic stuff. The main driver is managing and storing effectively the sheer volumes of information being created – nothing more complex.” Should people start to manage these volumes more successfully then, moving forward, the need to access and deliver information more smartly is expected to become the bigger driver. “People are talking about it at the moment,” says Pelz-Sharpe, “but I don’t think it’s the main reason for the majority of sales.” But, Charlie Abrahams, managing director, Europe, Middle East and Africa, Plumtree Software, offers another perspective. He points to a growing demand for a single medium through which organisations can interact with internal and external customers. “They are looking for some sort of ‘super net’,” he says. “It’s content provision around other electronic services, so delivering content to users, and, in turn, allowing them to contribute content.”

Essentially, Abrahams suggests that technology convergence has been a response to customer demand. With Plumtree customers requesting functionality that is typically a mixture of portal content management and collaboration, a convergence in the products the firm offers has become almost inescapable. But the issue of customer demand can have far greater implications. In enterprise content management today, most solutions are point solutions – a specific technology harnessed to solve a specific departmental problem. While companies are starting to think about strategically managing the information of the whole enterprise, the focus is still largely departmental. In fact, there are few examples of enterprises deploying solutions to 50,000-100,000 simultaneous users. Should a company wish to implement a web-content-management solution, for example, this isn’t a problem. But, as Tom Jenkins, chief executive officer of Open Text, suggests: “The problem arises and convergence becomes a factor when trying to overcome access control, approval and workflow issues to get this information inside the firewall and publish it to the web engine. Enter the enterprise-content-management solution.”

Jenkins suggests that another driver for technology convergence has been litigation and regulatory concerns. Using the example of web content management again, he refers to the “litigation headache” of companies needing to archive web pages every time the content changes or risk being hauled into court. “So you can see how the archiving and lifecycle stuff becomes a big part of this,” he says. “First-generation web-content-management engines were great, but you’re now suffering the hangover because you’re saddled with inefficient ways of creating content that you’re not saving, and you’re being sued for what was on your site three years ago. Subsequently, customers are being drawn towards an enterprise-content-management suite – it’s just a maturing phase.” Interestingly, however, while Pelz-Sharpe accepts that – in the US in particular – compliance is a huge driver for acquiring business-intelligence software due to its focus on auditing and reporting, he doesn’t believe it to be as significant a driver as people have suggested with regard to enterprise-content-management software. “It is a driver, but it’s more the case that it has raised the profile of the software to a point where people take notice,” he says. “Whether it makes them actually buy it is debatable.”

Other reasons for technology convergence include industry consolidation, which has been a deliberate move by some content-management companies to add functionality to their existing product offerings. And with many of their counterparts – even some successful ones – still somewhat under-priced following the dotcom crash, companies with disposable incomes have been able to get some exceptional deals. Pelz-Sharpe points the finger firmly at Microsoft for having ignited the entire consolidation process when it came to the market with SharePoint. “Everyone is worried sick about Microsoft,” he says. “It has shifted over 20 million suites in the first year and given the industry a significant wake-up call. Now there’s concern about IBM and Oracle. EMC isn’t perhaps in the same league as the other three players but, as a company, it is larger than the entire content-management industry. So the reality is things had to change.”

The general consensus now seems to be that content-management companies have no choice but to consolidate if they are to secure a place for the future. In fact, Jenkins refers to the history of IT sectors by way of example. “Show me the database vendor that survived the Oracle Sequel server IBM DB2,” he says. “And we’re speaking now about billion-dollar vendors like Sybase and Informix.” On this basis, $100m content-management vendors would need to either choose their consolidation path or have it chosen for them. But Pete Atkinson, channel and public-sector manager at Tridion, is not wholly convinced that this remains the only option. Instead, he emphasises the continuing importance of best-of-breed content management and the idea that most enterprise-content-management functionality will be delivered as infrastructure not standalone software. This is an opinion Pelz-Sharpe shares. “Enterprise-content-management functionality should be bundled in with infrastructure, and it has been of late, driven by the entry of Microsoft with SharePoint, IBM, potentially Oracle and, to some extent, EMC’s acquisition of Documentum. Despite some industry reservations about the hardware/software mix, Pelz-Sharpe insists it’s the way forward. “At the end of the day, it’s data management,” he says. “Look at what you can do with structured data. If you buy DB2 or the latest version of Oracle’s databases, what is bundled in there is outstanding. These are not just databases, they are entire management kits. The only difference is we’re talking about unstructured data, so it’s harder to deliver that functionality – but it should be done this way.”

Tridion has identified two types of customers within the content-management space. First, there are the medium to large-sized organisations that are experiencing the traditional problems associated with managing content, whether across multiple countries, internet or intranet sites. They understand the market is converging and are willing to sign up to the full enterprise-content-management experience. Then there is a completely different customer group, which understands the significance of convergence, but has a very specific problem to solve, whether it’s developing business value from an intranet or managing several public internet sites in a better fashion. For them, only about 25 per cent of the overall functionality of an enterprise-content-management system would be appropriate for their immediate requirements. However, if enterprise-content-management functionality were to move to the infrastructure layer or operating system, then this type of functionality would become standard. Instead, Tridion believes the spotlight will fall on specific application sets that would fit on top of the infrastructure to deliver specialised solutions. For example, the firm is currently working on a marketing solution that allows companies to target their customers more accurately and monitor their responses. So it could be used for managing websites, but also for e-mail campaigns, incorporating customer-relationship management (CRM). “Enterprise-content-management systems deliver content to individuals and therefore overlap with CRM systems,” says Atkinson. “We don’t want to replicate the functionality within CRM systems, but we can use it. We can use the information about customers to deliver content via a website, e-mail or SMS message. That’s what’s going to happen. Enterprise-content-management functionality is going to converge with the infrastructure and some very high-powered, sophisticated applications are going to emerge – ones that we haven’t really seen before.”

In terms of the other ongoing implications of technology convergence for the content-management market, most people are fairly upbeat about the long-term future. The expectation is better offerings at lower prices. At the moment, however, the situation can be somewhat confusing for customers, many of whom aren’t even sure what type of functionality they actually need. Buying this functionality is made ever-more challenging and risky because, while most vendors aren’t expected to go bankrupt or anything quite so severe, it is difficult to know which firms may be acquired in the future, which will not and, realistically speaking, which will have the funding to continue developments at the pace they have. “None of these companies have the kind of money they had at initial public offering,” says Pelz-Sharpe. “So you’ve got to be very careful who you’re buying from. The other side of that is there are a lot of companies now offering suites, but how well integrated or supported their various elements are is questionable.”

While there may be many technical reasons for content convergence, Jenkins believes that the future of the content-management market – and, more specifically, the technology providers themselves – is ultimately determined by market forces. He argues that while technology providers may have impressive solutions, it is Wall Street that decides who will last the course. In fact, he likens the role of the IT manager to a stockbroker, whereby both parties are becoming so confused by the alphabet soup of technologies currently available that they are demanding to see vendors’ balance sheets before deciding whether to invest any capital. “Wall Street is saying: ‘I don’t know about all this technology, I just know about financial results because that’s my proxy for customer demand – who’s making the most money and who’s growing the fastest.’ And naturally, investors are shying away from those vendors who are losing money on their balance sheet,” says Jenkins.

All in all, it would be fair to say that industry consolidation and technology convergence has meant the content-management market has become complex and particularly confusing for customers. Companies such as Interwoven and Vignette, which were once huge names and, to some extent, darlings of the dotcom era, are no longer big players. But do buyers know this? Do buyers know the rumours about Hitachi, Sap and HP trying to enter this space? “It’s difficult for the independent vendors,” says Pelz-Sharpe, “but which ones could you put your money on and say they’ll definitely be here in five years’ time? That’s tough when you’re managing unstructured data because you’re committing your company’s information and it’s a long-term investment.”

Instead, Pelz-Sharpe believes that, in many cases, companies should be holding back and looking towards the bigger providers – Microsoft, IBM, Oracle and EMC – to see what’s on offer. Even companies like Documentum, Filenet and Open Text have 10-15 years of good development behind them and very complex tools. But whether this is a sign of a mature industry or the end of one phase of its evolution, whereby we’re going to start seeing the delivery of more simple, practical applications remains to be seen. “At the moment, most offerings are over-engineered and over-priced,” says Pelz-Sharpe. “Many players decried what Microsoft was doing and will probably do the same when Oracle enters the market later this year. But the truth is they offer pretty much what people want.” Of course, if these few companies should start to monopolise the industry then there will be some concern about the lack of choice. However, it could be argued that the IT industry has always been fairly monopolistic and, moreover, that this affords some degree of regularity. “As an aggregate society, we like safety, stability and standardisation in the IT industry, so we’ll tolerate some degree of oligarchy,” says Jenkins. And, if this really is the case, then there is still significant industry consolidation and technology convergence to come.