Entries Tagged 'Content management' ↓

This economy is tough stuff for lots of small software vendors, but perhaps particularly those that are selling “improved productivity” or “enhanced collaboration” in the face of frozen IT budgets.  All is not doom and gloom however.  For example, Jive Software announced today that Q1 was its best quarter ever with 100% year-over-year revenue growth and its second quarter of being cash-flow positive.

Jive seems to be more the exception than the rule though as far as social software goes.  We know Mzinga has had two rounds of layoffs and a CEO change in recent months as it works towards profitability.  Similarly, Socialtext also had a small layoff and took additional funding — taking Socialtext’s total funding to about $18m.

What’s the difference between these vendors?  Some of it is technology certainly, but also a clarity of message.  I think Jive was early to market with what it is now calling “social business software” — in other words, a product that combines functions from multiple point tools (e.g., forums, wikis, social networking).   And Jive is playing in the big leagues versus large vendors selling enterprise deals for collaboration.  Selling deals for external, customer community sites also helps, as some of the external initiatives funded from marketing budgets are holding up better than large internal collab deals.

And from my perspective as an analyst in the content management realm, I also see a lot of WCM vendors coming out with more legit social software products – Day Software and EPiServer are two recent ones that come to mind.  How will these products fare as part of broader WCM suites?  Will they be the de facto choice for customers that use WCM products from these vendors?  Or has the market gone a different direction?  This is something I’ve blogged about before, but the social products from WCM vendors are getting stronger so the issue is becoming more real.

The noise in the enterprise social software market has certainly begun to die down and that is a good thing.  Looking forward to Enterprise 2.0 this year and the chance to hear more about what’s working and what’s not.

Is there anything new under the ECM sun? I heard lots of folks commenting this week at the annual AIIMExpo that there doesn’t appear to be.  I found some interesting nuggets though; here’s a sampling:

– Open source – maybe I seek these ones out but I think the presence of open source at these content management shows is obviously growing – I’ve commented on this before.  I met with Alfresco, KnowledgeTree and Nuxeo (briefly).

– I expected to hear a good deal of talk about information governance. I didn’t really, though there were certainly lots of sessions on the agenda in this vein that I missed. Instead I seemed to hear more about “nuts-and-bolts” ECM – customers, this year in particular, seem to be looking to solve specific process problems with specific apps and are less interested in talking about the “E” in content management. Not sure what that means as far as information governance goes, other than there’s an obvious need to tie governance strategies directly to content apps.

– SaaS – I met with SpringCM, which has added more partners building apps on its SaaS ECM platform. Hyland Software also notes decent growth for its OnBase OnLine product.

– The ECM heavyweights continue to duke it out. No major changes on this front, though Oracle appears to be more of a disruptive force than it was a year ago, as it ties UCM more aggressively (both technically and from a licensing perspective) to its various apps. I met with some Oracle folks that claim a “triple-digit” growth rate for Oracle’s UCM group in Oracle’s FY08 over the revenue previously generated separately by Stellent and Oracle’s ContentDB product.

– SharePoint, SharePoint, SharePoint – this pervasiveness is not news really. I didn’t go to any sessions specifically intended to be about SharePoint but still I heard about technologies to ensure disposition policies on SharePoint content, manage enterprise meta data structures tied to SharePoint, extend SharePoint’s ECM functions and so on. I also met with several vendors that basically compete with SharePoint from various angles and such discussions aren’t complete without analysis those competitive strategies.

In general, AIIM seemed quiet to me this year and those manning booths also commented that foot traffic seemed light. Some of that is no doubt simply because travel is being restricted all around, but like others, I wonder a bit about the relevancy of AIIMExpo going forward.  I don’t necessarily think that folks are going to stop going to tradeshows, but perhaps they want events that are more tailored to a particular vertical and/or technology.  AIIMExpo is a bit hard to pin down, covering content technologies at such a high level as it does. There’s a strong focus on apps that include capture and imaging to be sure, but other than that, it’s a bit of a mish-mash. FatWire Software was the only major independent WCM vendor I saw, despite a full WCM track.  And I didn’t see any social software vendors, even though Tony Byrne gave what I heard was a lively session on the topic.

As for my session on WCM + social software, it was somewhat lightly attended, though it was pitted against 9 other sessions (!), so that’s not exactly surprising. But the audience was engaged and we had some good discussion about adding social components to an existing site versus building a community site that sits as something of a separate arm off the main site.

There were lots of heads nodding when I talked about a move to consolidate social tools – for those orgs that have put up a WordPress blog over here and a wiki over there or maybe a discussion forum for customer support, and now wondering how to pull these together for better profile management, content re-use and overall consistency.  This could bode well for WCM vendors already running the main .com site for such a customer, but most WCM vendors still have a ways to go on the social software front.  Something for discussion at the next content management show, I’m sure…

Katey Wood and I will be in Philadelphia next week for the annual AIIM Expo.

I’m presenting on Tuesday in a session billed:  The Next Wave of WCM: Social Web Content Management.  Here I’ll be looking at something I’ve blogged about before, that is the potential overlap between the nascent social software efforts from WCM vendors and pure social software products for customer-facing sites.

The preso will provide a snapshot of what is happening in both WCM and social software, as far as customer sites go, and try to outline some pros and cons of taking different approaches in terms of vendor selection.  I also have a few quick case studies of customers that have a) gone with an independent provider of community/social software b) utilized the social features of an existing WCM provider or c) worked with open source that kind of straddles the line between the two.

Katey and I will also be using AIIM as an opportunity to talk with vendors, IT folks and business users more about content management and archiving for compliance and eDiscovery purposes.  We’re in the early stages of a report on the emergence of “information governance” as a sector within ECM.

The schedule is getting tight but don’t hesitate to contact me if you’ll be there.

Just wanted to make a quick addition to Nick’s post about Interwoven search.

The Interwoven name is not lost entirely, it is just being removed from the WorkSite, RecordsManager and Universal Search products in favor of reviving the iManage brand.  I’m not sure why Autonomy wants to bring more brands into the mix, when there is already Autonomy Zantaz, Autonomy Meridio and so forth; the overall info governance story might seem stronger if the individual components weren’t all still branded separately.

In any event, we have Autonomy Interwoven Web Solutions now, which does make sense since WCM is what the Interwoven brand has always been most strongly associated with, despite its success in the legal market.

And it appears there’s been some IDOL magic with Interwoven TeamSite, similar to what Nick described with Universal Search.  Autonomy announced today that:

Autonomy’s core infrastructure software, the Intelligent Data Operating Layer (IDOL), is now the underlying technology for TeamSite in version 6.7.2.

We haven’t been briefed yet on what exactly this means but again, as Nick noted, the speed of these integrations leaves us scratching our heads, unless this is the fruition of some work that was started prior to the acquisition.  The press release does also note:

A series of new modules leveraging additional capabilities IDOL brings to TeamSite will be released over the coming months.

We’ll be getting all the details in the coming weeks and will provide more comprehensive analysis at that point.

I might catch a lot of readers with that title, but of course I don’t really know for sure what will and won’t be in the next version of SharePoint.  Microsoft is still mum on the topic and I suspect will remain so until the SharePoint Conference slated for October.  This event was held in March last year; it seems logical it has been delayed this year to time the event with Office 14 announcements specific to SharePoint.

I read Guy Creese’s post last week on what he thinks will be in the next version of SharePoint and like Guy, I get a lot of questions in this vein.  I agree with Guy that SharePoint.next will have search improvements (we already know that one) and more sophisticated administration (we all hope). I’ll be surprised to see dramatic improvements in the transition between hosted and on-premise SharePoint in this version, I think the marketing is likely to lead the reality in this area for sometime to come, but perhaps I’ll be surprised.

I often get questions more specifically (from vendors) around what Microsoft isn’t going to do and reading Guy’s post, I thought it would be interesting to comment on what’s left out.

On the social software front…

There’s been some debate of late about whether or not SharePoint is an “Enterprise 2.0” tool at all (or what, in fact, that even means, if anything). But anyone who saw Lawrence Liu pitch SharePoint versus IBM Lotus Connections to a packed room at Enterprise 2.0 last year, would certainly assume Microsoft has ambitions in this area.  It’s worth noting however that Liu left Microsoft not long after that for Telligent Systems, which sells community software as an adjunct to SharePoint.  Liu presumably knows more about the SharePoint roadmap than we do, so looking at Telligent’s roadmap (limited version here) is probably a good indication of where Microsoft won’t go in social software in this next release (think community analytics, bridging internal and external communities, and feed aggregation).

It’s not about WCM.

Making SharePoint ubiquitous for content-based collaboration is Microsoft’s number one goal and this means improved admin, search and social software, to my mind.   So what will get left out?   I don’t think we’ll see any major changes on the WCM front.  Microsoft marketed the WCM capabilities in MOSS 2007 when it first came out, as it stopped development on its stand-alone WCM product, Microsoft CMS (which came from its 2001 acquisition of nCompass) in favor of Sharepoint.  But this seems to have died down and vendors like Sitecore are doing well selling more sophisticated WCM with SharePoint integrations, apparently with cooperation from Microsoft.  WCM for large, customer-facing sites, is really not where SharePoint strengths lie and Microsoft will likely let this one stand much as it is as it invests in other areas (Sitecore even sells a bundle for intranets, showing some market opportunity for WCM even in SharePoint’s sweet spot).

What about records management and archiving?

There’s some records management today in SharePoint, but it’s limited to SharePoint environments.  Improved admin across server farms could help here but it doesn’t seem likely Microsoft is going to go far beyond this and this doesn’t address the archiving issue at all.  Vendors like Open Text, Symantec and EMC are banking on their products’ abilities to manage and archive content (including email) from multiple repositories including SharePoint.  And this seems like a market that will be relatively immune to changes in SharePoint.next — indeed, changes that make SharePoint more popular are likely only good news to these vendors, at least in the short term.

I’m sure there are other gaps vendors are filling where they may be some continued opportunity after SharePoint.next, but those are the big ones that jump to my  mind.

We have more year-end financials available this week so we can continue our look at the  health of the WCM market.

Day Software, which is traded on the SIX Swiss Exchange and OTC in the US, released its year-end results today, with total 2008 revenues of CHF 27.8M ($23.9m USD), an increase of 11% from 2007. License revenue grew 8%.  Day continued with a net loss on a GAAP basis, though it had a number of restructuring charges and claimed a return to non-GAAP profitability, when these charges are excluded.  Day released a major upgrade to its flagship CQ5 in Q4, which I would have expected to delay Q4 sales as customers wait for the new version.  So that fact combined with the overall business climate make modest growth from Day unsurprising.

We also get a bit of data from SDL on its acquired Tridion business.  SDL’s year-end results include the note that it had “Tridion revenue growth of 16%.”  Based on data we’ve tracked since SDL acquired Tridion in 2007, we had Tridion bringing in $42m in 2007 revenue, so 16% growth puts 2008 at $48.7m  Growth has definitely slowed for Tridion, which reported 58% growth in 2007 over 2006, but we already knew that since SDL noted Tridion’s first-half 2008 sales grew only 11%.

To me this all seems to point to relatively stable growth in WCM overall.  If we average in the outliers (FatWire/Sitecore and Vignette on the high and low ends respectively), we probably get to low double-digit growth in the 10-20% range, which is pretty much what the sector has been seeing for awhile now.

What about 2009?  Growth may well slow some, but I still don’t see the WCM sector getting hitting particularly hard, as there is still a lot of work to be done on a lot of sites in nearly all verticals and geos.  There may be more opportunities for open source and SaaS players to make some hay with potential cost savings, along with some projects getting delayed, downsized or chunked up, but I see organizations still buying WCM overall.

A related note:  Our recent report on M&A prospects in WCM is available via the New York Times DealBook today.

I commented in late January that there seem to be two schools of thought at the moment on spending in ECM — in that post, I was talking about downturns in ECM spending overall versus serious investment in information governance-related technologies, like archiving, records management and eDiscovery.

The same dichotomy seems to exist in specifically WCM at the moment as well, though for different reasons.

On one side of the WCM coin, we have Vignette, which turned in an ugly Q4, with revenue down 29.4% year over year and license revenue totalling just $7.3m or 19.5% of revenue.   And we have the Autonomy acquisition of Interwoven, which was not primarily driven by Autonomy’s desire to be in the WCM business (here’s Nick’s take on Autonomy’s drivers).  We’re not saying Autonomy won’t invest in WCM, it’s too early to make any kind of judgement on that.  But nobody is pretending Autonomy would have bought Interwoven if it didn’t have the WorkSite and Discovery Mining businesses and expertise in the legal industry.

On the other side of the coin, we have FatWire, which yesterday announced 40% year-over-year revenue growth in 2008 taking it to $44m.  This is the first time FatWire has publicly announced a revenue number, clearly it thought it had something worth bragging about (I was pegging FatWire’s 2008 revenue at about $40m, so it beat my not-entirely-informed estimate).

Obviously FatWire is a good deal smaller than Interwoven and Vignette and is growing from a smaller base.  Still, it reports an overall strength in the market domestically and internationally that is intriguing.  And it’s not alone in noting strength in the sector — Sitecore made a similar announcement back in November.

Is WCM a strategic investment you have to make when IT budgets are tight?   More and more business is certainly done on the Web, customers spend more time researching buying decisions on the web, a lot of Web sites are in need of update, it’s a less expensive marketing channel, and so many companies can’t afford not to invest.

The counter argument to this was articulated, ironically, by Open Text CEO John Shackleton on the quarterly earnings call when he was asked about the Interwoven transaction.  He said:

…one of the concern areas would be in the web content management where like most managers if someone came to me and said our website is looking a little old. We need to spend $1 million to clean it up. I wouldn’t see that as a must-have. So what we’re seeing is it’s not critical, people are putting off those decisions to upgrade their websites. I would see that Interwoven like our web content products is seeing some softness in the market.

That from a vendor with WCM in its portfolio, though it’s hardly the company’s focus.

So what do you think?  Is FatWire simply absorbing some of the business that would have gone to Vignette and that’s enough to support the growth it needs as a smaller company?  Or does WCM have some legs in a tough 2009?

There seem to be two schools of thoughts at the moment on how ECM vendors will fare the tightening of IT budgets.

On the one hand, few doubt there is increased legislation and regulation headed our way on a global basis, particularly in financial services and government, and this could be a boon for ECM vendors that sell document and records management systems for compliance purposes — IBM, Open Text, EMC, HP to name a few.  Litigation related to events of the past four or five months is also likely, making the need for eDiscovery tools that can help organizations more cost effectively deal with discovery requests for electronic information more dire.  The vendors listed above, along with a host of others, certainly see growth opportunities in eDiscovery (this was a big part of Autonomy’s rationale in picking up Interwoven last week).

But on the other hand, IT spending is taking some big cuts and ECM vendors aren’t going to be immune to this.  In October, we noted data from our survey partner ChangeWave that forecast declines in ECM spending in Q4 and we’re watching some of those results come in now.

EMC’s Q4 revenue for its content management and archiving (CMA) division declined 12% year-over-year, with license revenue down 30% in the quarter.  For 2008 as a whole, EMC’s CMA division did grow 2%.  Interwoven’s Q4 revenue held up ok, with 11% revenue growth and 6% license growth; about half of this is typically Web content management revenue though, a different market from the traditional ECM and compliance-related stuff discussed above.  (There’s no way to break out IBM and Oracle’s ECM-related revenue, unfortunately).

Open Text announced its fiscal ’09 Q2 earnings yesterday, with revenue up 14% year over year to $207.7m and license revenue up 18%.  Open Text has been beating the compliance drum for awhile now (it was perhaps pushed here earlier as its initial strength was more in the realm of collaborative document management, SharePoint’s target market), and may be benefiting from that most now.  (With ongoing success in this range and high interest in compliance-related markets, we continue to ask if/when Open Text will be open to a deal itself).

Compliance/records management/eDiscovery hasn’t necessarily been the number one sales driver for most ECM vendors (except for Open Text which has tied 70% of license to “compliance” in recent quarters).  Growth in these areas will have to make up for potential shortfalls in other tried-and-trued areas of ECM — the transactional content apps for things like loan originations, account enrollment, claims processing, drug approvals and myriad other types of business-specific apps for which organizations use ECM.

These vendors are also still figuring out how to deal with SharePoint in the market.  While most have a more realistic view of what SharePoint is and isn’t in the market at this point (it is increasingly a standard layer for basic content services but it’s not full ECM for compliance or transactional apps, at least not yet) and have developed some nuanced strategies for co-opetition with Microsoft, there’s still little doubt Microsoft has taken some ECM business that previously went to bigger, more sophisticated document management products simply because there weren’t other alternatives.  A new version of SharePoint expected as part of Office 14 late this year / early next could also see a lot of customers pushing off decisions in this difficult 2009 to “wait and see” what SharePoint.next has to offer.

If you missed it, there was an article from CNNMoney earlier this week on Open Text and spending in this sector.

Release is here. Autonomy is paying $775m cash, including a new loan.

Main drivers as we see it right now having just listened to the call:

• eDiscovery and increasingly regulated environment.
• Access to Interwoven’s rich customer base in the legal sector.
• Adding automation to the content management process – think auto-tagging rather than manual tagging.
• FRCP changes in 2006 forced companies to consider all their data and you can’ manage all your data manually.
• Autonomy has changed its mind about content management for the reasons above.
• Reward for Interwoven’s turnaround and refocusing efforts including in eDiscovery via the Discovery Mining acquisition.
• Leaves other standalone content management players in an even worse position (e.g. Vignette).
• Autonomy acquisition engine gets some more fuel; it’s looking more & more like a mini-Oracle every day, in all senses of that phrase.

More considered and deep analysis coming to 451 customers later today.

After my post earlier this week on whether or not “ECM” will continue as a useful and valid market category, it was interesting to attend an analyst day held yesterday by Open Text here in Boston.  Open Text is a poster child for ECM with nearly all of its business coming from content-related products — document management, records management, archiving, WCM, capture/delivery & collab.

As the largest independent in ECM, it’s certainly in Open Text’s best interest to pursue and preserve ECM as a market category and it is doing so.  “ECM” is featured prominently in the company’s basic About text, it tags itself “The Content Experts” and last year renamed its long-standing user conference from LiveLinkUp (a reference to its flagship Livelink product) to ContentWorld.  Execs also claimed at the event that they see more customers coming around to the idea of enterprise content management — not in a way that is driven by a single repository or even suite, but as a set of practices and processes that must be in place for compliance and to mitigate risk and cost.

I think what remains to be seen is whether these compliance and risk-related content management practices eventually fall under an ECM bucket from a market perspective.  Certainly not all vendors that sell pieces of technology in support of these practices (like archiving or records management) sell themselves as ECM, since ECM carries with it the connotation of transactional document management apps.

As a clear-cut ECM vendor, Open Text wants to compete in a clear-cut ECM market, even if competition is becoming broader and more varied.  Is it big enough to define the category if other, larger vendors meld archiving, records management, eDiscovery and so forth into ‘information governance’ or some other, governance-related, non-transactional sector?  Other independents like Interwoven and Hyland Software are a good deal smaller than Open Text and don’t talk as much about ECM as they used to.  They’re choosing instead in most case to focus on their areas of strength (e.g., WCM or document management) and staying out of the line of fire of larger ECM competitors like IBM, EMC, Oracle and Microsoft.  And I think these larger vendors are somewhat conflicted as to whether or not they want to hang an ECM banner on a broader collection of products.

One other note about Open Text’s analyst day.  In contrast to events like this one held by other vendors, where, as we’ve noted before, it’s often difficult to miss the executive turnover from the prior year’s event, Open Text is refreshingly consistent.  It’s the same folks year after year, the titles shift around sometimes but the exec team appears to see little change.  One exception to that this year was the appearance of Lubor Ptacek, long of EMC Documentum, who turned up as a VP of product marketing.