Entries Tagged 'Search' ↓

Document filters as a search proxy war

Document filters. There’s a phrase to conjure up excitement in any technologist eh? No? Didn’t think so. But look more carefully at what is going on and it does get more interesting, trust me.

I was moved to expand in this by Isys Search Software’s recent attempt at guerilla marketing at Oracle Open World which it tweeted about here:

isyssearch: ISYS goes guerrilla; kicked out of Oracle Open World party after projecting our branding on the Metreon http://tinyurl.com/272fync #oow10

Quite apart from what it says about Isys and how much it’s changed in the last two years – a bit like the nerdy guy in the playground trying to act tough – it shows how important some people – including me – think these filters have become.

There are two main companies selling products that enable the opening and viewing of myriad file formats (400 is a common number cited by both the vendors and their customers). So when a search engine comes across a Word 1997 or even something like  Wordstar 4 file, how does it open it? Usually using one of two products: Oracle’s OutsideIn or Autonomy’s IDOL KeyView.

Both products came to these companies via acquisitions: Autonomy buying Verity in November 2005 and Oracle buying Stellent in 2007, (and Stellent, as it wasn’t known then, buying Inso in 2000). It’s also interesting to note that Isys still refers to them as Inso in its marketing even though the product has been called something else for years.

Like all OEM technology, these filters aren’t easily ripped out and replaced. And that’s what these two vendors like about them. It gives them a a foot in the door at software companies that they can try to expand upon, and quite often they do. The temptation of course is to use the difficulty to remove them as a point of leverage to crank up prices.

And that’s what we’re hearing Autonomy is doing from a number of vendors. We haven’t heard anything similar regarding Oracle, it should be noted. Autonomy has a reasonably significant OEM technology stream and as we have mentioned previously Autonomy regularly brags about its OEM wins, without specifying whether its KeyView or the full IDOL engine being OEMd. Incidentally after that earlier post Autonomy contacted us to say that KeyView isn’t the result of the acquisition of Verity and all it bought was the name. That’s despite what was said at the time, including its own press release shortly after the acquisition bragging about its features. But then Autonomy’s marketing these days increasingly requires a willing suspension of disbelief.

Isys has had this technology for a while but never sold it separately. But now it is finding quite a bit of success among software vendors nervous about having a key piece of technology owned by Autonomy or Oracle because they’re often search and/or content management companies; two markets in which both companies play. dtSearch, another veteran OEM provider also provides similar filters.

So for the first time in a long time, ISVs have a choice beyond the main two in filters and in their close relatives, connectors, the software to connect search engines to databases, content management systems and other repositories. In the often incestuous world of information management software, where vendors both compete and sell to one another, these have become points of leverage that customers may not notice in terms of functionality, but they certainly do in terms of the price they have to pay for their software.

Why Autonomy won’t – or shouldn’t – buy Open Text

At the time of Autonomy’s Q2 results last week, a fair few commentators said an acquisition of Open Text was imminent. We know that a large deal is imminent and the enterprise value of Open Text (OTEX) is in Autonomy’s ball park. Plus OTEX – itself a roll-up machine somewhat akin to Autonomy –  isn’t exactly in the rudest of health right now.

On the earnings calls CEO Mike Lynch said Autonomy’s next major acquisition would not be done to buy growth (we have already expressed our thoughts on that), nor would it be done simply because the price is right. It would have to be a strategic move, a game-changer. Well, OTEX isn’t that, in our mind at least. So what would such a deal give Autonomy?

Sure, it would give it practically all the document management business in the legal sector. But so what? Autonomy already has a lot of that via its Interwoven acquisition. It would also bring with it yet more overlapping content management products and a collaboration business being eaten by SharePoint. On the plus side, it would roughly triple Autonomy’s customer base to about 65,000 organizations.

Of course, I could be completely wrong and August 18 could be the date on which that is proved, as it’s OTEX’s Q4 results announcement. That is, if SAP hasn’t got there first.

Still, Tibco or Informatica make far more sense to us as truly strategic acquisitions for Autonomy. But of course, in order to buy something you have to find a willing seller, and we’re not so certain those sorts of companies relish the prospect of ending up inside Autonomy as much as a company that has few other choices might do.

Autonomy’s Q2 – magical stuff happens

Clients of 451 will have seen our report yesterday on Autonomy’s Q2 and 1H10 results. I won’t repeat it all here but in it we looked at the some of the more puzzling aspects of the company’s numbers. These include:

  • Organic growth:  “IDOL product” revenue of $62m this time was in contrast to $47m in Q1. It said at the time of the Q1 results on April 21 that it had $10m of hardware inventory, which most understood to be its Arcpliance archiving and ECA appliance. It said it had already sold most of that in Q2. That is a new product, so if that $10m is removed from the $62m (since it’s recognized as up-front license revenue), and a little bit more is taken off for sales to federal government via the recently-acquired MicroLink (Autonomy trumpeted a multimillion dollar federal deal in Q2), then you get very close to the $47m figure from Q1, and thus, next to no organic growth. That compares to the company’s claim of 19% organic growth for IDOL in the quarter and 13% across all products and services.
  • Cloud & SaaS & hosting: Autonomy gives out some seemingly helpful but often confusing metrics in terms of its product breakdowns. It said  SaaS-based revenue accounted for more than one-quarter of the company’s revenue in the first half. fair enough, and pretty interesting. But it also attributed revenues of $47m (out of $211.6M in total) to what it calls “IDOL cloud.” That’s 22%. However that isn’t one of the terms used in the way Autonomy packages its products so it’s hard to tell what it is. For instance, how much of ‘IDOL cloud’ is Zantaz’s hosted archiving product isn’t clear.
  • Services: It puzzles me how a company selling a product that is powerful, but complex to implement, as Autonomy is, can make do with next to no professional services, instead relying almost solely on partners. This tends to leave customers – especially those spending less than $1m with the company – with a lot of integration work on their hands. It also puzzles us when it goes and picks up a service firm like MicroLink, paying $55m for assets it says are worth $1m with the rest being goodwill (as it disclosed in Q2’s results).
  • OEM: The company said that OEM is its fastest growing revenue stream. It should also be noted that Autonomy sells two main products via its OEM channel. One is IDOL, the core search and categorization engine. The other is KeyView, the set of file filters it got with its acquisition of Verity almost five years ago. The former costs a lot more than the latter, and once the customer has implemented it, the former is a lot harder to replace than the latter. Nevertheless, when Autonomy announces a new OEM customer or a renewal, it usually doesn’t differentiate between these two. Incidentally it made a bold claim on the call yesterday, namely that almost all the major archiving vendors are OEM customers of Autonomy, which means all its main competitors in that space as it’s very much an archiving vendor too. In cases like that it’s quite important to distinguish between OEMing IDOL and OEMing KeyView as the former is much more of a differentiator than the latter.

There’s more in the report but mainly in the form of other things that puzzle me about these numbers, rather than a list of answers. Still, another acquisition is sure to come along soon  and change the picture again.

Information management team at this year’s 451 client event

Most of the information management team are attending the 4th annual 451 client event, which takes place in Boston next week, November 2-3, so I thought I’d let you know what we’re up to.

Four of us are presenting, here’s the dates/times (all ET) and themes:

  • Nov 3, 3.30-4.15: Matt Aslett – Open source to the rescue?

Can open source really help enterprises cut costs and ride out the economic storm? What has been the impact of current conditions on open source adoption? How is this being reflected in the business strategies of vendors – both open source specialists and traditional proprietary vendors?

  • Nov 4, 11.00-11.45: Nick Patience & Kathleen Reidy – E-Discovery to Information Governance: From Reactive, Unavoidable Cost to Proactive Cost-Avoidance.

E-discovery is a market without a lot of discretionary spending – legal events and investigations occur, and require that organizations produce relevant electronic information, no matter the difficulties or costs. This fact has driven lots of vendors from various sectors to the e-discovery (also known as e-disclosure) market: it is driving business in the archiving, enterprise content management and enterprise search markets, as organizations want to figure out how to better prepare for litigation before it occurs.

  • Nov 4, 11.45-12.30: Simon Robinson –  Storage Technology Is Thriving in the Economic Downturn

The economy is shrinking, but data is growing. Almost universally, storage vendors claim they can help IT ‘do more with less’ by squeezing more value out of storage assets to meet rampant data growth and stiffer retention criteria. This presentation will examine how three key trends in storage innovation – optimization, unification and the cloud – are helping some storage vendors thrive in this uncertain climate. The session will conclude with a vendor panel discussion.

Henry Baltazar is also attending and we’re all avaiable for 1:1s, though some of our days are getting pretty near to full. Contact your account rep about booking a slot.

If you are a client and you’re not attending then you’re missing out on one of the key beneifts of being a client!

If you’re not a client and you wish to attend, you can do that too, only you’ll have to pay to get in. Either way, you can register here.

Beyond information management all our other themes will be address including cloud (a lot!), security, virtualization, eco-efficient IT and our popular M&A panel, which always comes right before cocktails on day 1.

See you there!

Enterprise search & text analysis market sizing report

I’m pleased to announced that the first market sizing report from our Information Management practice here at 451 has been published. It covers the enterprise search and text analysis markets, providing revenues figures from 2009-2013 and our growth expectations for those years.

We look at the reasons for that projected growth, identifying 10 drivers overall, one of which is the rise of search-based applications. At some point in the future we’d like to try and size that market, although it’s too nascent to put a number on it just yet.

You can download an executive summary or find out more about the report here.

Suffice to say I’m very excited about this new addition to our coverage, adding the quantitative element to our many years of analyzing the market on a qualitative basis.

This report will be updated every six months with new figures and every 12 months with new analysis an figures. We provide analysis of the industry throughout the year through our Market Insight Service in shorter, more regular form.

This is not only the fist in a series of reports on the enterprise search business, but also the first in a series of market sizing reports within information management. The next will be on the data warehousing business, due in early 2010, written by Matt Aslett.

Autonomy pops up to pronounce an RDBMS revolution is afoot

In one of those Autonomy announcements that seemingly appear out of nowhere, the company has declared its intention to “transform” the relational database market by applying its text analysis technology to content stored within database. The tool is called IDOL Structured Probabilistic Engine (SPE), as it uses the same Bayesian-based probabilistic inferencing technology that IDOL uses on unstructured information.

The quote from CEO Mike Lynch grandly proclaims this to be Autonomy’s “second fundamental technology” – IDOL itself being the first. That’s quite a claim and we’re endeavoring to find out more and will report back as to exactly how it works and what it can do.

Overall though this is part of a push by companies like Autonomy, but also Attivio, Endeca, Exalead and some others into the search-based application market. The underlying premise of that market is database offloading; the idea of using a search engine rather than a relational database to sort and query information. It holds great promise, partly because it is the bridge between enterprise search and business intelligence but also because of the prospect of cost savings for customers as they can either freeze their investments in relational database licenses, reduce them, or even eliminate them.

Of course if the enterprise search licenses then get so expensive as to nullify the cost benefit, then customers will reject the idea, which is something of which search vendors need to be wary.

Users can apply to joint the beta program at a very non-Autonomy looking website.

Innovation vs. M&A at Yahoo

Now that the deal between Microsoft and Yahoo is done, it got me thinking more about Yahoo and it’s position as a pioneer of the web. That it was one is not in doubt; its directory was indeed a first and useful. But how much else did it actually pioneer? Have a look at a list of Yahoo’s acquisitions.

  • Search – surely the cornerstone of the business, yet its very first search engine was licensed from Open Text in 1995. Sure, it went on to build its own and do some great work, but now with the deal done with Microsoft, Yahoo has exited the search business.
  • Webmail – I recall getting a great Yahoo email address when that came out in 1997; it was a pioneer, but it got there by purchasing Four11.com and its RocketMail service . Now my account is overrun with spam and unusable (yet the company has the temerity to regularly threaten to cut me off for having too much mail and not using it enough, all of which is spam that its own spam filters can’t control. Hmmm.)
  • Personal publishing – it was an early major player in personal publishing now called blogging, but again it got there largely by purchasing GeoCities for an enormous amount of Yahoo stock.
  • Advertising – it pioneered banner ads on the web but as we all know but caught out by keyword search innovation from Google (which it built, rather than bought). And it had to buy Overture from Idealab.
  • Rich media – the Broadcast.com deal unleashed Mark Cuban on an unsuspecting world.
  • Photos – to its credit and bought Flickr and then largely left it alone
  • Social bookmarking – same goes for De.licio.us

But if the rest that can be said for it is that Yahoo knew when to leave its acquired companies alone, to give them space to grow and continue innovating then all that’s left is a dwindling brand and company with some choice assets left intact for others to pick up over time. As this article pointed out recently, many of these acquired assets have been closed down, some only after a few years.

There is still innovation happening within Yahoo, plenty of it and I wish the folks at Yahoo working in the labs on some great semantic technology, among other things the best of luck. But touting a new home page just last week doesn’t give me much hope that Yahoo really gets the distributed, read/write Web. Who cares about home pages?

And of course Yahoo isn’t going anywhere soon, it has plenty of cash in the bank and a new revenue stream courtesy of Microsoft. But I doubt it will last out the 10 years of this deal.

One of things all this demonstrates is that M&A is different in different parts of the tech industry. In enterprise software quite often a company is buying a customer base and its ongoing maintenance stream – this is how Oracle has grown. But on the web with people not paying you directly and with very low (to nil) switching costs to another search engine, serving up a different set of ads, things are very different and you have to focus on core competences, not run after each new fad just as it’s peaking and buy your way into it.

Vivisimo appoints new CEO & president

Enterprise search company Vivisimo has appointed a new CEO and president as the company aims to scale up. Co-founder and previous CEO Raul Valdez-Perez becomes chairman. John Kealey, the new CEO has been on the company’s advisory board for the past 18 months and so knows the company well.

In terms of executive positions he was most recently CEO of iDirect Technologies, which was acquired by Singapore Technologies in 2005. He’d held previous positions at SBC Communications. Calderwoodm who has worked alongside Kealey for many years was a founder and managing partner of Amp Capital Partners, a VC firm in Virginia and also worked at iDirect. He has many years of software management experience while at Baan.

The CEO search apparently started last year and Kealey was an early choice but wasn’t available until now.

We’ve noted before that Vivisimo that was being bad-mouthed by its competitors over and above the usual level of FUD you see in this or any other tech market though we couldn’t figure out why. However we said then that it seemed misplaced to us and this move would seem to indicate that the company is certainly going in the right direction. We look forward to getting an update from John in the near future.

Enterprise Search Summit 09 perspectives

I started off this year’s Enterprise Search Summit in New York last week with a dinner sponsored by New Idea Engineering and Attivio on Monday night, which was highly enjoyable, despite my jetlag – having to try and stay up the first night in from London. Thanks to those folks for the invite and the conversation.

Katey and I were not allowed to sit in any of the session this year from some strange reason. So I can’t tell you first hand about what was interesting or not or the attendance in the sessions. Go figure. It also wasn’t that conducive to meeting end users, which is a main objective of attending these things.

Katey reckoned attendance overall was slightly down on last year, but not spectacularly so (I was at different conference and so had to miss last year’s).

So away from those two disappointments, we did have a fairly full docket of meetings with vendors, which were generally lively, with good give and take. Where we say ‘451 research to follow,’ it means our clients can expect a research report on the company in the near future.

Some of the highlights:

Attivio – CTO Sid Probstein is always chock-full of ideas and so always good to have a sitdown with him. CEO Ali Riaz is entertaining on a whole different level. The company appears to be going great guns and is at the forefront of the drive to combine structured and unstructured data as we have said before.

BA-Insight – not really a search company or a text analysis company; more of a piece of information management middleware that aims to increase ‘findability’ within SharePoint. As any SharePoint users, especially those in an environment with multiple SharePoint sites – that can only be a good thing. Connectors to other search engines coming. 451 research to follow.

Coveo – the company was out in force at this conference having just launched version 6.0 of its search platform featuring better scalability, connectors and mobile functionality. We covered that product update a short while back.

Endeca – met chief scientist Daniel Tunkelang for the first time. Clearly the owner of an active mind, Daniel presents a different face to the search company. His thoughts on the conference are here.

Google – the typically on-message briefing from Google. It owns the low end and is increasingly taking chunks out of the mid-tier, but still no sign of the management layer enterprises needed to get their arms around the myriad Google search appliances lying around most large organizations. It will probably appear out of the blue at some point though, this year, I’d imagine.

MicrosoftNate Treolar was a great evangelist for Fast Search & Transfer while a product manager, and so it seems appropriate that he has the term ‘evangelist’ in his title at Microsoft where he’s working not only on the SharePoint search ecosystem but other programs such as ‘conversational’ and ‘actionable’ search; talking and doing, hey, what else is there? 😉

PerfectSearch – we don’t usually see too many companies at this conference that we haven’t spoken to before, but PerfectSearch is one of them. It sells a search appliance and some of the founders have a Novell background, hence its Orem, IT HQ. 451 research to follow.

Vivisimo – from what we’ve heard the company is going well, both in the indirect (OEM) ad direct markets. We’ve noticed how often this company is being bad-mouthed by its competitors (over and above the usual FUD in any tech market) though we’re not sure why. Perhaps because Pittsburgh isn’t as fashionable as Boston or the Valley? Don’t really know, but it seems misplaced based on our experience. It’s making good headway with Lexis-Nexis, which will be important in the eDiscovery market as well with other customers that have demanded confidentiality (pretty common in the eDiscovery market). 451 research to follow.

Upcoming Enterprise Search & Text Analytics summits

We have two ‘summit’s coming up in the next few weeks on the east coast that we’ll be attending.

We’ll be at the Enterprise Search Summit in New York May 12-13 at the Hilton on 6th Avenue. We have a bunch of meetings already but still have room for more, so if you’re attending and would like to meet (end users in particular, but vendors too), please get in touch with myself or Katey.

And just a few weeks later we’ll be in Boston where I’ll be at the 5th annual Text Analytics Summit. I’m doing the Sunday night graveyard slot once again on May 31, laying out my assessment of vendors fo but last year (it’s called “Top Tips on Vendor Choices” in the agenda). I recall it was enjoyable and we ended up taking the conversation to the bar afterward; a tradition I intend to continue this year. I’m also on a panel at the end of Day 1 (June1), right before cocktails (I’m seeing a trend here). Likewise, please get in touch if you want to meet up. I’m staying in Boston June 3 to meet clients, then back to London.