When SDL finally came to terms with Alterian in December, we were inspired to take a look at this and other recent acquisitions that have been done as part of the broadening of WCM into Web-experience (or customer-experience) management.  Alterian brings SDL another WCM product, since Alterian acquired Mediasurface in 2008, but SDL is really after the real-time analytics and campaign management tools that are part of Alterian’s marketing automation portfolio.

It strikes us that these areas are fairly far afield from SDL’s origins in language technology and services.  The deal wasn’t surprising though given how far SDL has gone into WCM.  It’s not enough today though at least at the high-end of the market to be in WCM without a broader play for online marketing / marketing automation.

While there are some vendor attempts to grow web-experience management organically (Sitecore is probably most notable here), there has been a good deal of M&A inspired by bringing together WCM, web analytics, content targeting/recommendations, social and testing technologies, among others.

We’ve put together a report that reviews many of these past deals and provides some predictive analysis of M&A in this sector — available here for 451 Research subscribers.

Some forward-looking takeaways from this are:

• There are few WCM independents left to be acquired, particularly in the non-.NET camp, though there are several potential acquirers that might still want a stronger WCM component.
• CoreMedia may become a desirable target, as a rare independent with a Java codebase and high-end customers. Both SAP and IBM could pursue, though SAP seems more likely as CoreMedia is a German company and already plays the WCM part in SAP’s Web Channel Experience Management initiative.
• WCM isn’t the only field for potential targets in the name of customer-experience or even more strictly in web-experience management.  Content targeting, analytics, and testing/optimization will all likely hold interest in 2012.
• It’s not just the big IT players that have a role in this consolidating landscape, though Adobe, Oracle and IBM are key players to be sure.  We’ve also seen smaller players, like Norway’s eZ Systems, making small technology buys to round out their portfolios.  eZ bought two companies in 2011 — YOUCHOOSE for its recommendations engine and odoscope for web analytics.
• There are lots of small technology providers in this sector, most are SaaS, and we expect there will more acquisitions like these to come.

We recently published a spotlight report on cloud file sharing and sync, file backup and file-oriented collaboration in the cloud – and all the overlaps and intersections between these areas.  The full report is available here for 451 Research subscribers (link requires log-in).

The idea was to shed some light on this sector that often seems to be described by its two best known players – Dropbox and Box.  Despite the similar names, the services offered by these two providers have significant differences.  And each is after a different, though in some cases overlapping, target market.

Dropbox in particular seems to be gaining a lot of attention from enterprise IT departments — and it’s not all good.  As compliance, security, risk and IT folks in general try to get their arms around the fact that corporate data is moving to Dropbox (and other services), a number of providers have started to look at providing alternatives.  All of this largely driven of course by the widespread use of iPads and other mobile devices by business users and their need to access files from these devices and keep them in sync across mobile and desktop systems.  Box exploits this requirement as well, but offers more file-oriented collaboration capabilities, though not full-blown content management in the traditional sense.

Cloud file sharing, sync and mobile support for file collaboration will all be hot topics in 2012.  We feel we might quickly be inundated by the number of providers that want to offer some kind of alternative to Dropbox to appease IT departments and/or better mobile access to existing enterprise content systems, like SharePoint.  Below is our first-stab attempt to start to map some of this to the sub-sectors within this broader and rapidly shifting landscape.  And we know it’s not comprehensive, the players here are changing almost daily.

Cloud file backup, sharing, sync and collaboration providers

Source: 451 Research

Looking further into the growing ecosystem of vendors that extend and support Microsoft SharePoint, we get to the question of where ISVs fit when SharePoint is in the cloud.  The short answer, really, is that they don’t.  OK, that’s an oversimplification of course, but there is currently a far more limited role for third parties looking to extend SharePoint if it is run in a shared cloud environment.  And this points to some contradictions in Microsoft’s strategy.  On the one hand, we see a big push around SharePoint as a platform and this growing ecosystem of third parties.  On the other hand, Microsoft is touting SharePoint Online as part of the upcoming Office 365 cloud-based service (to replace the existing Business Productivty Online Suite, aka BPOS), which really has very little support for third parties.

BPOS, which bundles SharePoint Online along with Exchange and a few other services, is currently offered in both Standard and Dedicated versions.   In the Standard version, customers have multi-tenant infrastructure that is shared across customers.  With the Dedicated version (or BPOS D), they have (obviously) dedicated infrastructure, which pretty much traditional application hosting; with this BPOS D configuration, Microsoft is the hosting provider, though this scenario would really not be much different from having another hosting provider run your SharePoint deployment on dedicated servers.  Office 365 will also be made available on either shared or dedicated infrastructure.

There is currently no support for trusted third-party code in the Standard version of BPOS (aka BPOS S), nor will there be in the Office 365 Standard version.  Customers that want to extend their SharePoint deployment with, say, workflow tools from Nintex or imaging capabilities from KnowledgeLake (or any of their own custom code), will have to run their SharePoint deployments on prem or in a dedicated environment, hosted by either Microsoft or another hosting provider.

That isn’t to say that integration with BPOS / Office 365 is impossible — web services-based integration that requires no server-side installs on the SharePoint servers isn’t an issue.  So, for example, Metavis Technologies has migration tools that can move data to / from BPOS without installing anything on the SharePoint servers and so can work with SharePoint as part of BPOS S (and Office 365 presumably).  Similarly, on the Exchange side of BPOS, email archiving to a cloud provider like LiveOffice works via a data export function that doesn’t touch the cloud-based Exchange servers.

Maybe the argument is that orgs don’t want to run more sophisticated content management apps in pure cloud environments.  That may be an ok way to segment the market today but it will be limiting in the future.   One of the advantages Microsoft has today over an upstart cloud player, like Box.net for example, is the growing ecosystem of extensions that can help fit SharePoint into a broad array of use cases.  But these aren’t there in the cloud. If Box (or another player) could grow and support an ecosystem in the cloud (and support custom code and in-house developers), it might get some advantage; this is the strategy SpringCM has been attempting, with some, limited success, with its platform approach to ECM in the cloud.  Salesforce has also been more aggressively building its social software offering, Chatter (see recent acquisition of Dimdim as case in point).  This doesn’t meet a plethora of content management requirements yet but is potentially competitive to SharePoint as a social software service for internal use.

There are clear limitations to the approach Microsoft is currently taking with the SharePoint ecosystem and BPOS / Office 365 and it seems this will be something that Microsoft will have to ultimately address if it wants to be serious about offering SharePoint as cloud services.  This isn’t the only issue that might keep organizations away from the Standard version of Office 365 (i.e., how much SharePoint functionality will it include and how often will it rev?), but it could be a big one.

Over the past few quarters, I’ve fielded a number of inquiries from IT, investor and vendor clients about an emerging “SharePoint ecosystem.”  Questions range from “We want to extend our SharePoint deployment to support a transactional app.  What third-party tools should we look at?” to “What are the gaps in SharePoint where there are opportunities for investment?” In response to some of these queries, I’ve put together a new report for 451 Group clients that shares a title with this blog post.

It’s hardly a secret that SharePoint has had and will continue to have a tremendous impact on the content management market.  Organizations really started taking SharePoint seriously as a content management platform after the release of Microsoft Office SharePoint Server in 2007 (affectionately known as MOSS 2007).  We’ve seen a few trends since that time that affect this idea of a SharePoint ecosystem:

• With many organizations investing significant amounts of time, money and effort in their SharePoint deployments, there is a good deal of interest in expanding SharePoint’s use beyond some of the more basic content sharing uses and intranet apps where it mostly started.
• Along with that however is a better understanding by many in IT and in business units of where SharePoint works well and where it falls short.  This isn’t true across the board, as there is still a great deal of variation in terms of the sophistication of SharePoint deployments (i.e., the more an org uses SharePoint, the more they are likely to see its limitations).
• Microsoft’s own attitude towards SharePoint seems to have shifted to some degree since the 2007 MOSS launch.  At that point, Microsoft positioned SharePoint more as the end-all, be-all of content management.  That positioning seemed to fade pretty quickly in the face of the realities of content management realized by Microsoft’s field organizations and partners.  Today there is more subtlety in how Microsoft defines its own content management capabilities (foundational) vs. the areas it leaves to partners (supplemental).  I’m not claiming this new, Microsoft has been positioning SharePoint as a dev’t platform for ISVs for some time, but it is worth highlighting as an ongoing trend as it relates to the ISV ecosystem.

So those three trends taken together and separately can point to significant opportunities for ISVs that are extending SharePoint.  There is also really not much in the new SharePoint 2010 release to derail many of these players; there is still lots of room for extension and complementary capabilities.

Some of these are smaller players really dedicating their businesses to SharePoint (e.g., Nintex, KnowledgeLake) and some are much larger businesses that have either invested heavily in SharePoint tools (e.g., Quest Software).  Existing large ECM vendors fit into this ecosystem as well, as they have adjusted strategies to both coexist and compete with SharePoint (e.g., Open Text, EMC).  We cover most of these vendors in some depth in our regular Market Insight Service and look at them together and at some of the competitive dynamics in the segment in this Spotlight report.

We have a new report entitled, “Open to Disruption: The Impact of Open Source in Content Management.”  Our purpose with this report is to look at the commercial implications of open source in content management. That is to say, our focus is on the vendors that have tied their business models to the availability of open source code and the customers that are willing to engage financially with these vendors.   The community-run projects (e.g., Drupal, Joomla et al) have a big impact on this market, but they are not the focus here.

I’ve been slogging away on this report for weeks and it has been really interesting to write. I have been covering the vendors making a go with business models tied to open source for several years now, but I never sat down before and tried to look at the market as a whole, to look across the vendors, across the different sectors in content management and across target markets.

Some of the things that struck me and are covered in much more detail in this report are:

• There is growing acceptance of open source in content management and there are more commercial options for organizations that want (or need) to have a commercial license and/or entity behind the code. More than a dozen vendors are profiled in the report.
• That said, we’re still in the early days of commercializing open source in content management.  While many of the open source projects in content management are well established, many of the vendors in this report have had fairly significant changes to business models and / or geographic expansion in the last two years.  Most are still fairly small (e.g., no more than $10m in revenue and less than 100 employees), though several are growing quite rapidly.
• There is a good deal of variety in terms of platforms, market focus (e.g., SMB vs. enterprise) and sector (WCM vs. ECM), though open source has a much stronger showing (and much more accepted) in WCM than in other areas of ECM.
• Many of the vendors in this sector are moving to or have moved to sales of commercial licenses (even if they don’t call it that) generally of “enterprise” products that extend an open source core.  This is the model that Alfresco follows, with some success, and it is being taken up by a number of other vendors here as well.
• This isn’t true across the board though and there is certainly no shortage of controversy about this approach.   This report also profiles that are primarily selling support subscriptions for open source code, implementation services or add-on products / extensions.

The report goes into a good deal of depth on what is driving adoption of open source in content management, challenges to adoption that are specific to this sector, the overall vendor landscape and business models the various vendors are applying.  The report also profiles Acquia, Alfresco, Concrete CMS, Day Software, dotCMS, DotNetNuke, eZ Systems, Hippo, Jahia, KnowledgeTree, Liferay, Magnolia, Nuxeo, SilverStripe, Squiz and Umbraco.

There is news that EMC has a new partnership with FatWire Software for WCM.  There are a few components to this deal, as we understand it:

• EMC will resell FatWire Content Server in a new package called EMC Web Experience Management by FatWire.
• EMC will have rights to resell the whole FatWire portfolio.
• EMC has made an undisclosed equity investment in FatWire.
• FatWire will resell the EMC DAM product.
• FatWire will develop apps on Documentum xCP.

It’s a substantial partnership and an admission that EMC’s own efforts in WCM weren’t cutting it with customers.  Still, it falls short of the rumored acquisition.  Why?  The two vendors claim a partnership gives EMC access to high-end WCM technology while letting FatWire remain nimble enough to develop products quickly and be more responsive to market needs — the equity investment is meant to help FatWire along these lines.  This makes some sense as acquired WCM often gets lost in a larger ECM vendor.  But with the market consolidation that has already occurred in this sector, EMC is taking on some risk relying on a third-party for its WCM rather than owning it outright.

Apparently it’s a risk EMC is willing to take, which we take to mean that WCM isn’t seen as strategic enough to EMC to do the acquisition.  That’s not all that surprising really.  WCM is as much (if not more) a part of marketing automation these days as it is part of the sorts of ECM apps EMC is invested in.  Buying WCM at this point would mean making some commitment to continued innovation in areas of online marketing (e.g., multivariate testing, web analytics etc.) that don’t relate much to other areas of EMC’s business.  EMC is focusing on its core transactional document management apps and information governance opportunities that tie records management to archiving and e-discovery.  WCM doesn’t really have much to do with any of that.

FatWire’s products will essentially replace EMC’s WCM assets (though EMC hasn’t yet announced specific products or timelines for end-of-life, but that will come) and so this is potentially a boon to FatWire’s sales, insomuch as EMC can sell FatWire’s software.  If this partnership does have a material impact on FatWire’s sales, it could impact its ability to be acquired by another vendor, at least at a valuation it might want.  So this could be a big deal for FatWire, one way or another.

Such a busy three days at Gilbane Boston this year, I hardly had time to even follow the tweet stream from the event.  I was involved in four sessions and best I can do at this point is to recap a few of the key highlights from each.

The open source session I presented with Seth Gottlieb got some good response and was apt I think given the much larger presence of open source at the show overall this year.  Someone told me (but I didn’t confirm) that last year there were two open source booths on the show floor and this year there were six (dotCMS, Hippo, Nuxeo, Magnolia and Plone were the ones I counted – who am I missing?).  Alfresco and Acquia were notably absent I thought, though were both were represented on a couple of panels.

Open source also came up in the panel I moderated on portals, as we had Chris Stavros from LEVEL Studios there and Chris has done a lot of work with the Liferay portal.  We also had Glenn Mannke, Director of Intranet Development at Starwood Hotels and Resorts, talking with us about how they use Oracle Portal and how embedded this is in their overall infrastructure.  Russ Edelman lent his SharePoint perspective as did John Petersen from Sutro Software who has worked with the Vignette (now Open Text) portal for a number of years.  I’ll sum up the key takeaways from this panel as:

• Portals never went away, even though the marketing died down.  They were victims of the hype earlier in the decade.  Glenn in particular emphasized how portals are only becoming more important in his organization as the number of tools and apps they manage proliferate.
• John and Chris likened portals to a new Web OS that delivers application and infrastructure services.
• We spent some time talking about what those services are exactly and the panelists agreed that identity management and SSO are crucial.
• There was also some interesting discussion about client-side vs. server-side portals.  Is an app that can aggregate little windows on a screen a portal?  The panelists gave a resounding “no” to this question, given the lack of infrastructure services noted above.
• And portal standards (e.g., JSR 286) weren’t noted as being particularly important.

I thought portals might also come up on the panel I hosted on social publishing.  This brought WCM vendors together with pure social software plays for a discussion about where these two market sectors are headed.  It was perhaps not quite as heated as I’d hoped, but there was a bit of controversy.  David Carter, CTO from Awareness and Adam Mertz, Product Marketer at Jive, admitted that their systems don’t do WCM and that many customers still need that function (I think particularly for external sites), but that social is important enough to warrant its own layer in the stack.  They argued that WCM systems aren’t architected to support the dynamic nature of social media.  Lars Trieloff from Day Software and Dmitri Tcherevik of FatWire definitely didn’t agree.  Bryan House of Acquia (Drupal) argued that open source does the best job blending the two.

In general though, I think the panelists agreed that social is becoming part of so many other things (there was some discussion of CRM + social as well).  That still leaves me scratching my head as to the future of the pure social software vendors (I asked if Jive might also get into WCM, but, not surprisingly, didn’t get a direct answer).

SharePoint came up in all of these sessions, as it also did on the analyst panel, not surprisingly as SharePoint has an impact in social, portals, WCM and just about every other aspect of ECM.  Microsoft had a big presence at Gilbane this year, a little surprising to me since Gilbane is generally a pretty WCM-focused show. I had the chance to sit down for about an hour with Ryan Duguid, a Microsoft product manager for ECM in the SharePoint group.  He insisted SharePoint plays in .com-type WCM scenarios and pointed me to this list, which I have seen before.  It’s just doesn’t seem to come up much though in talking with clients and vendors about WCM.  And I don’t see too much in the 2010 release that looks to change that.  Am I missing something?

Overall, a good lively show.  I heard attendance was up and the exhibit hall was full of vendors – there never seems to be a lull in the influx of new vendors to this space.  Lots of interesting conversations about social, open source and online marketing, which all bodes well for a continued vibrant market in 2010.

The annual Gilbane content management event is two weeks away, slated for December 1-3 here in Boston.   I’ve got a full dance card this year and am busily prepping for several sessions:

The Rise of Open Source in Content Management

Open source guru Seth Gottleib and I will present this session on what’s happening with open source content management.  I’m going to take a very market-focused look, updating some of the work I did in a report (sorry, 451 login required) earlier this year on the group of European (or otherwise international) open source players entering the US market.  I’ll also incorporate some preliminary data being gathered and analyzed now by 451′s CAOS (Commercial Adoption of Open Source) team on open source adoption drivers and benefits generally.  Seth will look at how open source affects both software procurement and selling processes and offer lots of good advice for those contemplating or already working with open source content management software.

Are Enterprise Portals Back?

This panel will no doubt take me back to the days (I hate to say 10 years ago) when I was an analyst dedicated wholly to the enterprise portal market.  Is there even any such thing anymore?  The users and consultants on this panel will discuss that, along with the role of portal (and other) standards, SharePoint and open source.  I’m keen to discuss whether or not portal adoption has ever really waned, even though all the marketing buzz around portals surely died down.  Are the drivers today any different than they were ten years ago?  Or does the rise of social software in fact make portals more useful than ever, as an aggregation technology for social content and functions?  Even if present-day social software vendors steer far clear of the portal lingo…

Social Publishing and WCM

On this panel, some senior folks from Acquia, Awareness, Day Software, FatWire Software and Jive Software will debate the intersection, overlap and potential convergence of social software and WCM.  As it features WCM vendors with a social software play, pure social software vendors and Acquia (Drupal probably comes closest to sitting somewhere in between), it is likely to be a lively discussion.  I hope to get the panelists talking about the difference between community sites and community features and how this distinction can affect product selection, particularly for different use cases.  Is there an ongoing play for social software products that can’t address content management needs?  Or is WCM likely to be overtaken by social alternatives (likely a hard sell to this content management audience)?  Is it really about integration?  Will the markets consolidate?  And where does SharePoint fit in all of this?

And finally, I’ll sit in on the annual analyst panel as well.  It will be a busy couple of days but please do drop me a note if you’ll be there.

Our webinar last week on information governance went well and generated some interesting questions.  I didn’t get to answer all the questions on the call so I’ll take the opportunity to briefly answer some of them here, including some of the more interesting ones I did answer live.   Most of these topics were covered in much more detail in our recently published report on information governance, which also spawned the webinar. The full recorded webinar is also available online as well.

Q: Can you talk to any trends you see in terms of who in an organization is purchasing governance/e-discovery tools?

This is something covered in some detail in the report itself.  In general, there’s some difference in terms of purchasing between “governance” and “e-discovery.”  If the use case being addressed in a particular procurement process is specifically for reactive e-discovery – meaning, the ability to respond to a specific legal discovery request – then the process is likely to have heavy involvement from the legal department if not full ownership by that team with IT involvement.

Governance is generally broader and is likely to involve more underlying pieces of technology (e.g., archiving, records management, indexing tools for distributed data and e-discovery / early case assessment).  There’s certainly no single approach to governance and most organizations are in the earliest of stages in terms of putting in place some kind of broader governance strategy.  Procurement is still likely to be tied to more tactical requirements and the specifics of those requirements will dictate who’s involved (e.g., e-discovery is more likely to be run by legal, as noted above, while an email archiving decision is more likely to be led by IT with legal involvement).  Generally speaking, hashing out broader governance strategies may well involve IT (email management, storage, ECM and search folks), legal, compliance officers, records managers and security personnel, among others.

Q: What are your thoughts about how far right along EDRM the big ECM vendors will move?

So far, ECM vendors are focusing on the far left of the electronic discovery reference model (EDRM).  This has expanded in the last twelve months or so from a far more limited focus solely on the “information management” process step to greater capabilities for data identification, collection, preservation, and some review and analysis.  This is likely to continue, though I’d be surprised to see ECM vendors move beyond this.  Identification, collection and preservation will be key areas in the short term (EMC’s recent Kazeon buy is a good example of how ECM vendors will look to better handle distributed data).  Review and analysis capabilities are likely to remain in the area of early-case assessment, with the expectation that a winnowed-down set of data is still likely to be turned over to external counsel for further review and analysis. That’s likely to be where most ECM vendors stop, though not all; Autonomy, for example, plays specifically in the legal market as well with iManage and Discovery Mining.

Q: Can you explain a bit more what you mean by “litigation readiness”?   What processes does this cover?

I guess this is a phrase I use a lot when talking about information governance and perhaps I didn’t explain it well enough on the webinar.  Litigation readiness is really just one reason organizations are interested in information governance.  Poor information governance makes it difficult to respond efficiently and cost effectively to e-discovery.  There are a number of processes involved in better preparing for litigation, but ideally, organizations need to have some high-level understanding of what data exists, where it is and who has access to it.  That’s a whole lot easier said than done of course, particularly when you need to include data on desktops, laptops, shared file drives and so forth.  The processes generally need to encompass maintaining some kind of index of what resides on all those devices and how that data will be captured and secured if needed.  That needs to be combined of course with more formalized management of data in archives and records management systems, with some consistency in terms of retention and disposition policies (that are standardized and enforced) across sources.  Few organizations have a very good handle on this sort of thing across repositories and unmanaged devices today, but those that are more often involved in litigation are likely to be more litigation-ready.

Q: Is Information Governance of primary interest in the US or are companies in Europe also concerned? I.e. is there an opportunity for vendors beyond the US?

Information governance as it relates primarily to litigation readiness is of primary interest to those in the US and in parts of Europe that have similar discovery or disclosure requirements for electronic information.  In geographies that don’t yet have as strict requirements for electronic discovery, governance may still be an interest but may be for different reasons.  Compliance with specific regulations (e.g., privacy-related legislation) can be a concern, for example, as can IP protection or other types of security.   So there is certainly opportunity for vendors in specific markets, such as archiving, but the drivers might be different.

That’s probably enough for one blog post.  Again, those interested in the full webinar can find it here.

This Thursday I’ll host a short webinar to discuss some of the findings from our recently-published report on the emerging Information Governance market.  This report looks at how archiving, records management and e-discovery technologies are coming together to help organizations get a better handle on internal data for litigation readiness and compliance purposes.

The webinar is free and open to anyone, so please feel free to join if you’re interested in this topic.

During the webinar, I’ll outline some of the trends we uncovered while doing our research for this report, look at the vendor landscape and M&A activity in this area, and briefly discuss some of the technologies that we think will be important in this sector moving forward.

Here’s the info and registration link:

The Rise of Information Governance webinar

Thursday, September 24, 2009

12:00 – 1:00 PM EDT

Register here

Recorded versions of our webcasts are available on our site a short while after the events are over.