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Day: March 2, 2010

Forecasting Software Product Abandonment

Given the announcement from Microsoft that it would make 2010 releases of Fast on Linux and UNIX the last for these operating systems, a lot of related comments have appeared over the past few weeks. For those of us who listened intently to early commentary on the Fast acquisition by Microsoft about its high level of commitment to dual development tracks, it only confirms what many analysts suspected would happen. Buyers rarely embrace their technology acquisitions solely (or even primarily) for the technology.

While these 2010 releases of Fast ESP on UNIX and Linux will continue to be supported for ten years, and repositories are projected to be indexable on these two platforms by future Fast releases, some customers will opt out of continuing with Fast. As newer and more advanced search technologies support preferred operating systems, they will choose to move. Microsoft probably expects to retain most current customers for the time being – inertia and long evaluation and selection processes by enterprises are on their side.

This recent announcement did include a small aside questioning whether Microsoft would continue to offer a standalone search engine outside of its SharePoint environment where the Fast product has been embedded and leveraged first. It sounds like the short term plan is to continue with standalone ESP, but certainly no long term commitment is made.

So, whatever stasis/constancy pre-Microsoft Fast customers were feeling sanguine about, it is surely being shaken around. Let’s take a look at some reasons that vendors abandon their acquisitions. First we need to consider why companies add products through acquisition in the first place. A simple list looks like this:

  1. Flat sales
  2. Need to penetrate a growth market or industry
  3. Desire to demonstrate strength to its existing customer base by acquiring a high-end brand name
  4. Need for technology, IP, and expertise
  5. Desire to expand the customer base, quickly

While item 1 probably was not a contributor to the Microsoft Fast acquisition, 2 and 3 certainly factored into their plan. Fast was “the” brand and had become synonymous in the marketplace with “enterprise search leader.” Surely Microsoft considered the technology IP and key employees that they would be acquiring, and having a ready-made customer-base and maintenance revenue stream would be considerations, too.
Customers do have reasons to be nervous in any of these big acquisitions, however. Here is what often get exposed and revealed once the onion is peeled:

  • Game changing technology is playing havoc in the marketplace; in search there are numerous smaller players with terrific technologies, more nimble and innovative development teams with rigorous code control mentalities, and the experience of having looked at gaps in older search technologies.
  • Cost of supporting multiple code bases is enormous, so the effort of developing native support on multiple platforms becomes onerous.
  • For any technology, loss of technical gurus (particularly when there has been a culture of loose IP control, poor capture of know-how, and limited documentation) will quickly drive a serious reality check as the acquirer strives to understand what it has bought.
  • Brand name customers may not stick around to find out what is going to happen, particularly if the product was on the path to being replaced anyway. Legacy software may be in place because it is irreplaceable or simply due to the neglect of enterprises using it. It may be very hard for the acquiring buyer to determine which situation is the case. A change of product ownership may be just the excuse that some customers need to seek something better. Customers understand the small probability of having a quick and smooth integration of a just-acquired product into the product mix of a large, mature organization.
  • A highly diverse customer base, in many vertical markets, with numerous license configuration requirements for hardware and operating system infrastructures will be a nightmare to support for a company that has always standardized on one platform. Providing customer support for a variety of installation, tuning and on-going administration differences is just not sustainable without a lot of advance planning and staffing.

The Microsoft/Fast circumstance is just an illustration. You might take a look at what is also going on with SAP after its acquisition of Business Objects (BO) in this lengthy analysis at Information Week. In this unfortunate upheaval, BO’s prior acquisition of Inxight has been a particular loss to those who had embraced that fine analytics and visualization engine.

The bottom line is that customers who depend on technology of any kind, for keeping their own businesses running effectively and efficiently, must be aware of what is transpiring with their most valued vendor/suppliers. When there is any changing of the guardians of best-of-breed software tools, be prepared by becoming knowledgeable about what is really under the skin of the newly harvested onion. Then, make your own plans accordingly.

Alfresco and VDEL GmbH Partner

Alfresco Software and VDEL GmbH, an IT services distribution company, announced a partnership under which VDEL has become a Master Distributor of Alfresco solutions in the territories of Eastern Europe, Russia, and CIS. Under the terms of the agreement, VDEL will offer Alfresco products, associated support, and training to its customers. The open source model allows Alfresco to use open source technologies and contributions from the open source community. In 2009, Alfresco obtained U.S. Department of Defence 5015.02 records management certification. VDEL is known in Eastern Europe, Russia, and CIS for; marketing, distributing and supporting network and security solutions. Because of their network of local partners VDEL is able to provide native language translation, localization and education. http://www.alfresco.com/  http://www.vdel.com/

Firespring Introduces WCM Solution for Nonprofits

Firespring, a marketing agency focusing on small and mid-sized organizations, introduced a new website solution for nonprofits. The new Firespring nonprofit website solution offers designs and online tools that are built with nonprofit organizations in mind, as well as segment-specific designs and content packages created for arts, advocacy and human service organizations. Website tools available include online donations, calendars, event registration, e-mail marketing, shopping carts, private member-only areas and automatic weekly updates on supporting nonprofits are built into the Firespring nonprofit website solution to help organizations engage their volunteers and their community. The websites all come with a content management system (CMS) allowing the nonprofit to update their own content, events and photos without a programmer. This solution will allow the nonprofit to add, remove or rename pages giving them the ability to customize their website without a technical specialist. http://www.firespring.com/

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