Entries from September 2008 ↓

My posting here has been light because we’re head-down writing  a major report on eDiscovery which will arrive in November, followed by a webinar. Here’s a few of the things we’ve learned along the way, some of which we suspected in advance, some of which were totally new to us:

• This is a highly fragmented market – there is no clear leader.
• The market has been shaped as much by US civil procedure rules and US privacy laws – or lack thereof –  than any technology innovation.
• However, technology innovation still has a big part to play in this market’s future direction.
• End users are growing tired of paying by the gigabyte – new models will emerge.
• Purchasing influence is shifting rapidly from law firms to the corporate legal departments (those large bills have focused their mind in a hurry).
• End users are very reluctant to talk publicly about what they’re doing (but boy, are we trying to persuade them to!)
• Some (but not all) of the large information management vendors that should have a strategy in this area don’t have anything of the sort (see first point).

Anyway there will be more where that came from when the report is out, and we’ll make sure the webinar details are posted here ahead of time. Plus we’ll be talking about this at our annual client event, which is November 10-11 in Boston, MA. See you there!

CEO of Ringside Networks Bob Bickel reported on his blog last week that the company is ‘winding down’ and that those involved with the company would ‘move forward.’ The company’s website is still live and an inquiry as to whether or not the company has officially ceased operations has not yet been answered. But it appears that the start-up, which had planned an open source ‘social application server,’ is done. Bickel blames the company’s outcome on distraction due to potential acquisition by a ‘non-evil’ company — he provides some interesting detail, it’s worth a read.

We profiled the company back in April at the time of its fairly high-profile launch (451 Group clients can see that profile here). Its plan, to enable site owners to create mini-apps that would integrate with public social networks like Facebook, seemed a good one and its management team, mostly ex-JBoss and Bluestone Software execs, was certainly experienced.  Our best wishes to Bob and the others involved — I have a feeling this isn’t the last we’ve heard from these guys or, probably, of this software.

This is the second recent enterprise open source social software / collab failure that pops to mind.  I also profiled German start-up Mindquarry last year (here for clients) that had some slick open source team collaboration software with all the social bells and whistles.  It also failed to get sufficient funding and the company founders eventually joined Day Software to develop the (proprietary) social software components of its Web content management line.

Update 9/30/2008 – Bob Bickel wrote to let me know that details on company operations are still be sorted out.  The Ringside open source code is still available on Sourceforge and will continue to be.

It’s hard for me to get excited about email.  Luckily for me, here at The 451 Group, we focus on emerging areas of the technology market or sectors where there is particular innovation or disruption.  And none of that much describes the email market.  I have looked at some of the vendors doing interesting things here (like Zimbra and Open-Xchange) and I had met once with PostPath before Cisco grabbed it a few weeks ago.  But even though I cover collaboration, I’m not down in the weeds with  “groupware” everyday.

So an announcement from Oracle that it has spent the last three years building a new collaboration suite, to replace Oracle Collaboration Suite (which hadn’t exactly taken the market by storm), doesn’t get me all revved up.  There’s lots of content out there on Beehive, from InformationWeek and CNET for example, so I won’t rehash all the details.  I know it’s about more than email and there’s a lot there that technically makes sense — its focus on security and compliance, scalability, integration with Outlook and the Zimbra web client, support for CalDAV and so on.

But it is not going to be an easy fight for Oracle in this market, to be sure, no matter how badly Oracle wants a piece of the collaboration market.  How many companies — others than OCS customers that are now stuck with a dead product — are going to move to a brand-new collab product?  I didn’t find any of the use cases Oracle described during their pre-brief all that compelling.

I wonder why Oracle, which obviously has no hesitation about buying into markets where it wants to be a major player, hasn’t acquired collab technology?  In the related content management market, Oracle made several attempts to market a database-driven content management system, mostly based on its ContentDB product and until it ultimately, purchased Stellent for $440m in 2006.  This strategy seems to be going well for Oracle (451 Group clients can read a more detailed write-up from a few months ago on Oracle’s progress in the content management market) and the company upped its investment by purchasing Captovation for document capture in January and Skywire Software for output (though this one was really more about insurance apps).

I understand that Oracle can’t go out and acquire the biggest competitor to Microsoft Exchange (that would IBM Lotus) and collab that ties closely to its apps is a high priority for Oracle, so building maybe made the most sense.  Still, there are other models for disruption – Yahoo! is looking at a different market segment with Zimbra and Cisco is planning its SaaS strategy with PostPath.  Those vendors both see Google Apps as the potential disrupter to the Exchange / SharePoint powerhouse and are looking to take a piece of that action before Google has it tied up.

I’m maybe not quite as a pessimistic as Matt Cain over at Gartner (his assessment doesn’t pull any punches).  I was part of a briefing with Matt once (back in his Meta Group days) when I was a product manager at Sun, on the integration between Sun’s portal server and collaboration products (email/calendar).  It was a half-baked integration with a lot of marketing fluff and Matt called us on it bluntly and accurately.  In saying Beehive is unlikely to be any more successful than [Oracle’s] past efforts, he does the same.

This morning I had the pleasure of attending (part of – don’t remember the last time I was able to attend all of something) the IBM Academy of Technology Conference on Future User Interfaces held at the MIT Media Lab in Cambridge.  It was refreshing a relief, after a train ride in spent reading about AIG and Wall Street woes, to be in a room full of researchers and academics all excited about the potential of social computing — IBM Fellow Irene Greif started out with a light comment on how software may help those of us that live in a cold place like Boston reap some of the innovation benefits of the sidewalk-cafe-kind-of-culture in Silicon Valley (my years in Silicon Valley were more about office parks and 101 traffic, if I remember, but I get what she’s saying).

One of the points of this meeting, which was mostly attended by IBMers and local academics, was to announce the formation of a the IBM Center for Social Software; Irene Greif will be the center’s director.  Headquartered at IBM’s research labs in Cambridge, the intent is to centralize IBM’s various research efforts in social computing.  The center will provide additional resources to IBM’s global research teams and external organizations so that they can better test social software “in the wild,” as Irene put it — within IBM’s enormous employee base or on the public web.  The Boston Globe has a write-up with further details.

This morning’s session included three demos.  The first was of Beehive, a social networking and profiling system being used by about 40,000 IBMers.  At IBM, this sits alongside the corporate BluePages directory and is more free form, in terms of who uses it and what kinds of information they share.  The next demo, from IBM’s Tokyo-based research group, was the Social Accessibility Project, an effort to improve page meta tagging for accessibility through community efforts (I don’t often think about how the visually-impaired work on the Web, so this was a particularly interesting demo).  Finally we saw Many-Eyes, a visualization project that has been out on the web for awhile – if you have any data sets that might work well visually, it is worth checking out.

The reason all of this is interesting, outside of it just being interesting (if that makes sense), is because IBM has done a particularly good job in getting its technology out its labs and into commercial software products.  Lotus Connections, which Irene referred to today as “our fastest growing software product ever” (I’ve seen this claim elsewhere), came largely from technologies that started out in IBM labs, were deployed internally at IBM and then rolled into the commercial product.   At Lotusphere last January, I saw a number of technologies from the labs that seemed destined for the Lotus line.  And at Enterprise 2.0 in January June, we heard that Spectacular, the RSS feed aggregation server developed in the labs and that I first saw at Lotusphere, would be in the next version of Connections.

Further investment from IBM on this front indicates its seriousness about social software and points to the likelihood that IBM Lotus will continue to innovate.  It has formidable competition, with so many organizations heading to Microsoft SharePoint, but so far IBM’s research investments in this area have given it some competitive advantage.

The rumored multi-vendor ECM interoperability effort has been unveiled.  IBM, Microsoft and EMC (and others) have collaborated on a draft specification – Content Management Interoperability Services (CMIS) – that is meant to addresses basic interoperability and accessibility for repository-based content.  The goal is to make it easier to pull/push managed content to/from other apps without the need for custom integrations or third-party connectors.

Some write-ups are already out there, with more detailed explanations:

CMS Wire – Industry Heavy Weights Move to Standardize Enterprise Content Management

Microsoft Enterprise Content Management (ECM) Team Blog – Announcing the CMIS Specification

Chuch Hollis – CMIS — it’s not JAS (just another standard)

John Newton’s Content Log – Alfresco releases first CMIS implementation

Chuck Hollis, as usual, has a particularly concise and on-target analysis.  He notes several of the following points that the standard effort has going for it, and I’ve added a few of my own:

• Interoperability is a real and growing problem (James McGovern has several intereting posts on this topic).  The industry needs to start to take some steps to solve it.

• This effort, though clearly still 1.0, has the right vendors behind it as it involves Oracle, Adobe and, Alfresco (kudos to still-small (and open source) Alfresco for getting a seat at the table on this one), along with the leads IBM, Microsoft and EMC.

• The multi-platform / multi-language approach is a must — a Java-only standard would have left SharePoint out of the picture and not covering SharePoint interoperability would seriously hamper the effectiveness of any ECM standard at this point.

• By working at a services layer and utilizing REST and SOAP, layering on top of existing systems and not requiring major re-writes or upgrades will be more feasible and potentially have the quickest impact.  This may also limit the sophistication of the what the standard is able to accomplish, but it’s better to get some lightweight interoperability with a larger number of existing systems.

What are the drawbacks or potential pitfalls?

• It will likely be 2010 before we see commercial products supporting CMIS, though Alfresco has already announced an implementation of the draft spec in its Labs (fka Community) edition. An open source vendor of course has more flexibility in pushing out (unsupported) code than a commercial vendor, though Alfresco’s REST architecture makes this more straightforward.  (Alfresco does plan to support the draft spec in its commercial Enterprise code during the ratification process; no word on whether commercial vendors will follow suit).

• Early integrations will in some cases be wrappers, perhaps shipped as downloadable modules outside of regular release cycles.  We’ll have to watch to see what this means and enables.

• Standards efforts often go nowhere fast.

I’m sure there are more, but those are the ones that occur to me at the moment.

At this point, all we can do is note that the vendors have made the effort to develop the standard and watch as it is handed over to OASIS for ratification.  It’s a slow process – the vendors involved began work on this in 2006, which is indicative of the pace of such projects.

We knew Open Text had more acquisitions planned, the company said as much on its most recent earnings call.  Buying Captaris will give Open Text improved fax and document capture capabilities, which are most interesting for Open Text when tied to enterprise apps from SAP and Oracle for outbound faxing of invoices and purchase orders coming from those apps.

Open Text has bid $4.80 per share of Captaris, valuing the vendor at $131m.  Brenon Daly looks more at the financials of this deal over on the 451 Group’s tech M&A blog, Inorganic Growth. For 451 Group clients, our full deal analysis is here.

After two small deals earlier this summer (for Spicer and eMotion), this is a bigger acquisition for Open Text and one that may slow it down a bit on the acquisition front, as Captaris had a few recent acquisitions of its own to digest.   Open Text is no stranger to assimilating acquired portfolios but it’s still no small task.  As usual, Alan Pelz-Sharpe at CMS Watch does a great job outlining the potential pitfalls for customers.

Another interesting angle though is that Open Text has made a larger acquisition and it wasn’t of Vignette.  There’s been speculation like this about such a deal and we don’t doubt Vignette is in play.  This acquisition does make it seem less likely that Open Text will go for Vignette anytime soon.

Still, if approved, this deal should leave Open Text with at least $100m in cash and an apparent mood to buy, so there will likely be more (smaller) deals to come.

A number of things passed me by this summer (yes, there was a reduced work schedule, a nice vacation — back at it now. Look for this blog to return to activity after a quiet summer).

One of the things I didn’t follow closely enough at the time was Microsoft’s earnings announcement at the end of its fiscal 2008.  Joe Wilcox at eWeek noted a 30% year-over-year growth in revenue associated with the SharePoint Server.  This isn’t in the filing, so must have been mentioned during the earnings call.  John Mancini picked this up but I didn’t find much else on it.  Then Stephan Elop, President of Microsoft’s Business Division, in a speech during a financial analyst meeting on July 24th cited fiscal year growth of 35% for SharePoint.

Microsoft claimed $800m in SharePoint revenue (in a press release) last year for fiscal 2007, so 30% growth puts 2008 revenue at $1.04 billion, 35% growth puts it at $1.08 billion.  The company also made a rather vague announcement in March the SharePoint Conference and via a press release that it had surpassed the $1 billion revenue mark.  At that point, we dug into it to find the $1 billion number was for the rolling twelve-month period.

The vagueness of the numbers is because of the difficulty of tracking individual product revenue, particulary when a product is tied to others in bundles.  Microsoft calculates SharePoint revenue by including revenue associated with Microsoft Office SharePoint Server 2007, the previous SharePoint Portal Server 2003 version, SharePoint Designer, Forms Server and SharePoint Search. SharePoint Server is sold individually and also as part of Microsoft’s Core client access license (CAL) and Enterprise CAL. So in the latter case, a share of the revenue from those bundles is associated with SharePoint.

All of this means the numbers are inexact to be sure and all licensed SharePoint seats (we haven’t seen an update on this number, from the 100 million claimed earlier this year) are not actively used.  But of course, the numbers are still indicative of SharePoint’s growing adoption, which few question. And many customers use the free SharePoint Services, which doesn’t directly show up in revenue numbers at all.

I suppose Microsoft didn’t make a big deal about it because the growth is in line with what it had already reported earlier in the year.  For others, the fact that SharePoint is a growing business for Microsoft isn’t exactly, uh, news.  Still, official news on SharePoint can be hard to come by so forgive the post if this is too old news, but I thought if I missed it, maybe others had too.