Our lengthy report that shares a title with this blog post hit the wire yesterday (a high-level exec overview is available here for all).  I’ve blogged before about our efforts on this.  It has been quite a project, with several months of listening, reading and talking with lots IT managers, attorneys, integrators, consultants and vendors.  Oh and writing — the final doc weighs in at 57 pages…

I noted before that I wasn’t sure “information governance” was a specific or real enough sector to warrant this kind of market analysis.  Aren’t we really just talking about archiving?  Or e-discovery?  Or ECM?  In the end, I found we’re talking about all these things, but what is different is that we’re talking about them all together. How do we ensure consistent retention policy across different stores?  How do we safely pursue more aggressive disposition?  How do we include all that “in-the-wild” content in centrally managed policies?

Is “information governance” really the right tag for this?  I don’t know, but I never came across anything better (I did toy with “information retention management” for awhile).  We  might be calling it something else in a couple of years, but the underlying issues are very real.

From the report intro:

What is information governance? There’s no single answer to that question. At a high level, information governance encompasses the policies and technologies meant to dictate and manage what corporate information is retained, where and for how long, and also how it is retained (e.g., protected, replicated and secured). Information governance spans retention, security and lifecycle management issues. For the purposes of this report, we’re focusing specifically on unstructured (or semi-structured,
like email) information and governance as it relates primarily to litigation readiness.

In the report, we look at why organizations are investigating more holistic information governance practices:

• to be better prepared for litigation
• to ensure compliance
• to reduce risks and costs of unmanaged or inconsistently managed information

Then we go into the market with analysis of:

• the rise of email (and broader) archiving for litigation readiness
• the relationship of the ECM and records management market
• Autonomy and other vendors advocating “in-place” approaches to governance

There are also sections on adoption issues, market consolidation and areas for technology innovation.  And profiles of 15 vendors (each with a SWOT analysis) active in this market.

Expect lots more on this topic moving forward.

As something of a follow-up to the special report we did last fall on the market for eDiscovery tools and technologies, we’ve begun work on a similar report meant to look more deeply at that first process phase in the EDRM — Information Management.

Information management sounds like a nice manageable topic, doesn’t it?

We’re looking specifically at the market for technologies meant to help organizations manage unstructured info (often ad-hoc, like email and unmanaged docs) more effectively so that eDiscovery won’t be such a firedrill if and when it occurs.

eDiscovery isn’t the only reason to get a better handle on this ad-hoc, unstructured info — there are compliance-related reasons in some cases and the costs and risks associated with storing lots of stuff for long periods of time when it should have been culled or deleted.  Conversely, not retaining information or at least having a documented retention and disposition plan is also risky.

As we’ve noted before, some are calling this “information governance.”  So is this a report on the information governance market?  Is there such a thing?

Here are some of the things we’re learning so far with our research:

• There’s no question that governance is a hot issue with many organizations.  Getting a better handle on email is the biggest pain point.  Check out this recent AIIM survey for some interesting data on this.
• Better preparedness for eDiscovery is the biggest driver, followed by the complexity of compliance, the need to reduce costs, and security concerns (security-related governance is really a separate market and not one we’re looking at here).
• One of the fundamental questions seems to come down to whether organizations want to take an archive-based approach to governance or one that is tied to an ECM platform.
• Since email is the big problem, email archives are a big part of the solution for many companies.
• Email archives are expanding to handle more diverse content types with more sophisticated retention, classification, legal holds and eDisco tools.
• The disconnect with this approach seems to be when emails or other content actually are records and need to be managed as such.  How data moves from one system (e.g., archive to records management system) or is managed in-place in an archive by an RM system seems to be mostly an unexplored issue for most organizatins at this point.
• Because of this, ECM vendors paint archive-only vendors as “point tools.”  ECM vendors see governance as an ECM problem and come at with platforms that generally include both archiving and records management.  But the archives from ECM vendors are generally newer or not traditionally as competitive in pure archiving scenarios.

All of the above makes for quite an interesting, if difficult to label, market.  We’re not really writing a report on the ECM market, since the archives are so critical to handling email especially, the major problem area, and most of the leading email archiving vendors are not full ECM vendors.  But there is definitely an ECM and records management component to this so we’re not just profiling the email archiving market.  In fact, we’re trying to only profile those vendors that can manage multiple content types and, ideally, do so across repositories.

Which I think leaves us talking about the information governance market.  This concerns me a little bit, as I worry that “information governance” is a vague tag and not really an identifiable sector.  But I see no other easy way to describe the intersection of vendors and technologies we see coming at this problem from different areas of strength.

I’d love any comments on what others think about this – is information governance a market?

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.

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.

We wouldn’t want to be left out of the new year preview craze and we do publish fairly lengthy end-of-year reviews and year-ahead previews, along with an M&A Outlook, for 451 clients — the full text of the information management reports are here and here and the M&A Outlook for Software starts here (451 Group client log in required for these).

One of my thoughts in our 2009 preview on information management is the title of this post.

I don’t think ECM (enterprise content management) has ever been a particularly well defined market.  It started out earlier in this decade as an idea, a way to talk about the need to rationalize repositories and content apps.  Then it became a market category, a way to talk about content management vendors (mostly those focused on document management really) whether there was really an “enterprise” component to deployments or not.

I think the “ECM” moniker may be nearing the end of its usefulness now (if it was ever apt or useful in the first place).  WCM (web content management) has already splintered off as it became clear that web content is really not just another type of content to be managed by a central repository.  Today WCM is more about online marketing and often ties at least as much to marketing automation and CRM products as it does to other document management apps in an enterprise.

Other “ECM” vendors are focused on TCM (transactional content management), the business process apps (claims processing, loan origination and so forth) that have been the bread and butter for ECM vendors like EMC Documentum and IBM FileNet for years.  We’re seeing more sophistication here, more ties to enterprise business apps (e.g., HR, financial) and more attempts at end-to-end offerings that include capture and document output/presentment.

The other, perhaps bigger, trend for the year ahead is the focus on ‘information governance’ (the IG in the title above) the term many vendors are applying to efforts and product lines aimed at proactive information  management for compliance and eDiscovery purposes.  Information governance from a product perspective generally includes archiving (mostly email), records/retention management and eDiscovery tools.  Here we find ECM vendors like EMC, IBM and Open Text, as well as CA, Symantec, Autonomy and others that have no stake in “ECM” of the TCM variety at all.

What do we mean when we say “ECM” these days?  Vendors like Autonomy and Symantec don’t generally claim to be in the ECM business, but yet they will be increasingly competing with the likes of IBM FileNet, EMC and Open Text for ‘information governance’ business.  It will be interesting to watch how the competitive dynamics (and nomenclature) shakes out in the year ahead.

…for back-to-back events that have thrown my blogging right out the window.  I know I’m supposed to blog before going to an event to facilitate meetings and then directly after to share useful info from the event, but it just didn’t happen.

Where I’ve been:

IBM Information-on-demand (IOD) in Vegas in late October.  This was my first trip to IOD and it was bigger and flashier than I expected.  I found it a bit hard for someone focused on content management to get too much out of the high-level presentations that aim to cover IBM’s overall information portfolio, including Cognos, DB2, FileNet and Content Manager, at the least.  I felt a bit as James Kobielus over at Forrester did, a bit surprised that compliance and risk management weren’t higher level themes at the event, given what’s going on in the financial world.  But the business optimization message IBM was hitting on is also increasingly relevant for those organizations (all?) being asked to figure out how to work smarter, more efficiently, and get by with reduced budgets at the moment.  I did also have a few useful sessions specifically on eDiscovery that were helpful in finishing up our special report on eDiscovery, due to hit the shelves any day now.

Next I went to Defrag in Denver, a bit of a culture shock from one week to the next to say the least.  Here I sat on a panel with Jonathan Yarmis from AMR Research and we discussed the future of industry analysts in the age of social media.  I think we were geared for a discussion of whether or not analysts are as outdated as newspapers, but we never really seemed to get there.  No one had the heart for it in the end.

As Nick detailed in his last post, our own 451 Group Client Conference took place here in Boston November 11-12.  This was surprisingly lively and well attended, considering the macro environment.  I met with quite a few investors interested in discussing ECM and collab opportunities at various stages of development.  All wasn’t as doom-and-gloom as I’d expected, except in Brenon Daly’s M&A panel…

At the event, I gave a preso with my views on where short-term opportunities lie in the broadly-defined content management market, especially when we’re hearing reports of declining IT spending in ECM specifically.  I tried to cover the landscape from the nascent social software market, which is splitting into markets for internal collaboration software and external, customer communities, all the way through the information governance strategies we’re starting to see from large ECM and info management vendors.

Now finally, the way I’m supposed to do this, next week, I’ll be at the Gilbane Conference again here in Boston.  I’ll be on the keynote analyst panel, which is always a pretty lively session covering a range of trends and topics in content management.  Gilbane has a big emphasis this year on social software and how it is changing the world of content management, so it should be a particularly timely and useful event.  Schedule is getting pretty tight already but let me know if you’ll be there and would like to meet.

Apologies for the travelogue, will be back up to semi-regular blogging after this week’s holiday.