June 22nd, 2009 — 2.0, Content management
I want to revisit a few of the relevant questions that came via the webinar I did last week with Bryan House from Acquia on open source social publishing. We got to some of these on the call, but not all, and some of the more market-level questions seem worthy of sharing.
The webinar focused on both the coming together of social software and WCM, and on open source content management; these questions do too.
Q: Why is open source a disruptive force in the social web CMS space?
I started out my part of the preso talking a little bit about The 451 Group and our focus on disruption and innovation in IT. I mentioned this includes disruptive technologies, business models or larger market changes. Open source certainly fits into the disruptive business model category (though, I know, open source is not a business model). Open source can impact how technology in a particular sector is developed, distributed, procured, priced and supported. This isn’t new in content management; open source projects like Drupal have been around for quite some time.
But as more vendors are making a go of businesses tied to open source code in content management, the dynamic is changing. Open source is becoming more of a viable option in content management for even the largest of organizations and that is something that is only going to get more pronounced. And some of the open source projects (like Drupal and WordPress) seem to do a particularly noteworthy job of tying CMS and social software capabilities (of varying types) together. An interesting fact, I think, as it shows that when a community drives software development in this area, it combines these two areas together, an indication of what the larger market may want.
Q: Tools like Interwoven or Vignette are often described as more “enterprise-ready” than open source alternatives? How big is the delta? How should I evaluate whether particular differences are important?
In general, Interwoven, Vignette et al. have had more of a focus on online marketing capabilities the last couple of years and so have more in the way of content targeting, analytics, multivariate testing and so forth to offer. But I don’t think this is what people usually mean when they say a CMS is “enterprise ready” — I think that’s more to do with things like LDAP/AD support, migration and upgrade tools, platform/commercial database support and so on. The reality is that a lot of commercial open source content management vendors do offer these capabilities but often only in an “enterprise” edition of the code that may only be available under a commercial license. The key is just to ensure that a particular distribution meets your requirements under a license that works for your project.
Q: What questions should I ask a vendor to understand how tightly integrated their social software and web content management capabilities are?
There are several models here. Some vendors have built some social capabilities directly into their WCM products, basically with the idea that most of this as it relates to content sites isn’t too much more than defining a content type (e.g., blog, comment, profile) and its attributes. Some mostly support plugging in third-party blogs, forums etc. Others have separate social software modules. In some cases these have come via acquisitions and others have been built from scratch and so integration levels vary. Some share a content repository and some don’t. So there’s quite a bit of variety and, as usual, it’s mostly just important to make sure however a vendor has done it works for your project. If you just want to add support for comments to an existing content-heavy site, using the integrated features from a WCM vendor probably works fine. If it’s a full-blown, forum-heavy customer support site, more of a stand-alone product (whether from a WCM or social software vendor) might work best.
Q: How will the recent transactions (Vignette & Interwoven) impact this market?
The consolidation at the high end of the market has a number of vendors scrambling to get some advantage. Competitor FatWire Software has a formal “rescue” program and others are certainly having similar discussions with customers. Customers looking to migrate or to evaluate a wider field of WCM options may well look at open source, as the broader availability of products from commercial vendors makes this a more viable option.
March 19th, 2009 — Content management, Search
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.
March 18th, 2009 — M&A, Search
So Autonomy has closed the acquisition of Interwoven and released a few details of its product plans. We’ll be hearing more in detail from senior management in the next couple of weeks, but a couple of things jump out at you when you peruse that document.
Firstly the usual, magical IDOL integration has happened again. What Autonomy is calling iManage Universal Search, is of course very similar in name to Interwoven’s Universal Search, which was powered by Interwoven’s agreement with Vivisimo. Now, just like that! – Vivisimo has been swapped out for IDOL. That’s not surprising of course, as everything Autonomy does is based on IDOL.
But the speed of integration seems unlike anything else we see in the industry and leaves us scratching our heads as to how this can actually happen so quickly, especially as we don’t believe IDOL to be a very lightweight, REST-like interface or anything like that.
Secondly, it looks as if the various product names within Interwoven – iManage, Discovery Mining, TeamSite and so on will be retained, while the company name disappears.
But, as I say, we’ll hear more soon and will report back in the form of a research update on Autonomy.
February 19th, 2009 — Content management
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?
January 29th, 2009 — Content management, eDiscovery
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.
January 22nd, 2009 — Archiving, Content management, eDiscovery, M&A, Search, Text analysis
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.
October 21st, 2008 — Content management
I just saw the official announcement that Kevin Cochrane has joined Day Software as CMO. Kevin was an early Interwoven employee, then left Interwoven for Alfresco where he ran product management. John Newton blogged back in June that Kevin was leaving Alfresco as he wanted to move back to the Bay Area.
Bringing Kevin on board is a coup for Day, but not all that surprising given that Day’s new CEO (since May) Erik Hansen is also ex-Interwoven. And there are some similarities between Day and Alfresco, as Day does have open source efforts and credibility via the Apache Jackrabbit project and associated Day CRX product.
Still, Day is first and foremost a commercial software vendor with a traditional licensing model, though we have expected for some time that the company might start to more aggressively pursue open source from a business perspective. Will Kevin lead Day in that direction?
July 9th, 2008 — Content management
We covered two small acquisitions in the ECM realm this week (for 451 Group clients, our TechDealmaker service has (or will have shortly) the full deal analysis reports), Open Text’s purchase of the file format viewing division of Spicer Corp. for $12m and Hyland Software’s Liberty IMS buy for an undisclosed sum.
Neither of these deals, which are both small, is all that interesting in and of itself. Open Text is getting a bit of technology to view CAD files, large schematics and other large and complex files without having the software used to create those files installed locally. This is a good addition to Open Text’s line, particularly as it looks to sell more vertically-customized apps in markets like energy and construction. Hyland has purchased a small competitor in the SMB market, mostly to expand its customer base in a few key verticals.
What is interesting about these deals, aside from the fact that they closed on the same day at a time when acquisitions aren’t exactly booming, is that they both come from independent ECM vendors looking to carve niches for themselves in a market increasingly dominated by the likes of IBM, Microsoft, Oracle and EMC (though Hyland is majority-owned by PE firm Thoma Cressey Bravo). Both have indicated that there will be more acquisitions ahead as they look to secure their positions and future acquisitions by both vendors are likely to be more of the same.
Open Text and Hyland operate on different scales — Open Text’s revenues in calendar year 2007 were $677.8m while Hyland’s were $104m. Open Text is also securely in the enterprise market while Hyland plays more at the mid-tier and in the SMB market, though the two do compete sometimes in government accounts and for accounts payable apps.
Hyland appears to be more aggressively on the acquisition trail at the moment, noting as part of the Liberty IMS announcement that plans are to “more than double our size in the next three years” via both inorganic and organic means. But Open Text has also indicated repeatedly that it will do ‘tuck-in’ technology buys, like the Spicer acquisition.
Open Text and Hyland aren’t the only independent ECM vendors remaining nor the only ones likely to make acquisitions in the near future. Interwoven and Vignette are also here. Both made technology buys in the past year, Interwoven bought multivariate testing vendor Optimost for $51m last October and Vignette parted with just $7m for the assets of video delivery service Vidavee in April. These buys indicate that these two are more interested in Web content management (WCM) at the moment, even though both have broader product lines, and future buys will most likely continue to fill out WCM portfolios. This is in contrast to Hyland and Open Text, who are both likely to stay more to document management, records management and BPM-related acquisitions. But none of these vendors is likely to make a major buy.
That said, these vendors themselves are perennial potential acquisition targets. Thoma Cressey Bravo may be fattening Hyland up for an eventual sale, but it will likely look to consolidate more of the mid-tier ECM market first. But the others – Open Text, Interwoven and Vignette – could themselves be up for grabs by giants like SAP or HP. In either case, we’re far from done with ECM acquisitions.
April 24th, 2008 — Content management
Interwoven and Vignette both released Q1 numbers in the last two days and their numbers highlight the different paths these long-time competitors are now on.
Vignette announced disappointing results. Vignette’s total revenue for the quarter was $44.8 million, a 6% decrease from Q1 2007, with a net loss of $0.8 million, compared with a $4.8m profit a year ago. Particularly disappointing for Vignette was license revenue which declined 36% to $9.7m. Vignette warned three weeks its results would be weaker than expected so the news wasn’t a surprise but the mood of the call was still somber.
Interwoven, on the other hand, announced a 17% increase in revenue to $61.5m with a 12% increase in license revenue and net income of $6.1m. Interwoven has always been a fairly conservative company but even so, one of the execs on the call said something along the lines of “we’re not claiming our earnings are recession proof but…” They were downright cheerful — and with good reason.
April 17th, 2008 — Content management, Text analysis
We have long wondered why more content management vendors don’t fully embrace text analysis (or even enterprise search for that matter).
These guardians of most organizations unstructured data were beaten to the punch in terms of exploiting text by business intelligence companies, which are more accustomed to manipulating structured data. It’s great that the BI companies are starting (slowly) to embrace the idea of unlocking the value locked within unstructured text, it’s somewhat bizarre why content management vendors didn’t get there first.
We said this many years ago, in the most coherent form in mid 2005 with our report called Text-aware applications: the endgame for unstructured data (the clue’s in the title).
In report that we said:
“…while the penetration of content management systems is relatively high when compared with other ways of managing unstructured data, these systems do little at present to help analyze that unstructured data.”
and somewhat optimistically:
“Indeed, despite the CMS’s [content management systems] ability to organize, most implementations rarely attempt to push into anything that could be considered a semantic understanding of the content. This may be set to change, however, with some vendors, such as EMC, making headway in automatically parsing documents at a deeper level than just file-level metadata.”
That was a tad premature on our part.
Think about the main players and what they do to understand what resides in the documents they ‘manage.’
EMC Documentum – it has its content intelligence services classification engine sure, and it bought a federated search product many moons ago, but neither are exactly front and central to its product strategy. And ILM (try searching on that now at EMC and see what you get) only dealt with file-level metadata, not semantic metadata. However the X-Hive acquisition was an interesting one from this standpoint (see below for more on XML databases).
Vignette – bar an OEM relationship with Autonomy (which most vendors have) nothing much doing here despite the need for Web content management to increase its understanding of the text its managing to make websites more attractive to advertisers (think of using text analysis to build links to other content automatically to keep visitors on the site longer).
Interwoven – Metatagger isn’t exactly at the bleeding edge any more, although the idea is sound.
IBM Filenet – here there is hope. IBM has taken a classifier it got from its iPhrase acquisition and used it to do initial classification to help determine what should or should not be deemed a record. IBM has all sorts of text analysis toys to play with and we expect more from it in the future.
Open Text – it once had five search engines, and was a pioneer in that space. But I’m not aware of anything it does to extract meaning from the content it manages.
Autonomy – Its tagline is ‘Meaning-based computing.’ It owns a powerful classification engine but now also owns records management and a bunch of other stuff. It’s the one company that checks most of the boxes here (but isn’t a document or Web content management vendor). But as the company currently refuses to talk to us, we’re in the dark as to which bit fits where and are unable to tell our clients what benefits Autonomy could bring them as a result. If the company cares to get in touch with me, I’m here.
This post was prompted partly by a recent conversation I had with Nstein . It is morphing from being a struggling text analysis vendor laden with debt (it’s publicly traded in Canada, so the numbers don’t lie) to a fast-growing combination of Web content management, digital asset management (via acquisitions in 2006 and 2007) and text analysis, built atop an XML database licensed from IxiaSoft. Its focusing exclusively on the largest publishing companies, using the text analysis to automatically create links between new and archived content (thus pushing it up Google rankings). It competes with Mark Logic and Interwoven, mainly.
Any Gmail user that looks in their spam folder and see ads for “Spam Swiss Pie – Bake 45-55 minutes or until eggs are set,” can appreciate how crude keyword matching against content is next to useless.
There’s so much more that can be done here and so much insight being left on the table, whether it be in better website management to attract readers, voice of the customer analysis tied to BI, or government intelligence.
Tools that manage content need to understand that content – its language, its meaning, its sentiment. Otherwise, they are missing a trick.