December 2004
Our most recent conference was held in Boston, November 30 – December 2, (www.gilbane.com/CM_conference_Boston_04.html) and drew an enthusiastic collection of companies looking to implement their first, second, or third (or more) content management system. While most were looking at Web or enterprise content management, many were also involved with document management, knowledge management, electronic records management, and digital asset management. In fact, aside from the standing-room only keynote session, the conference sessions on Enterprise Information Integration (EII) were the most crowded. Multi-repository integration is neither fun nor easy, so it is notable that the interest in EII is finally showing signs of serious interest. In addition to integration, multi-channel publishing, compliance, multi-lingual publishing, “best practices”, rich media, and technology and vendor futures were all hot topics.
Dick Vacca, who has contributed to the Gilbane Report before (Volume 7, Number 7, “The IMS, Metadata, and Web-based Learning Resources”) and is just returning to the industry, attended the conference and spoke with many of the attendees and participating analysts. For this issue Dick has put together a report on what he found that is a combination of his own fresh perspective and what he heard from others who are deeply involved in the industry.
If you were not able to join us in Boston, our next conferences are in San Francisco in April and Amsterdam in May. Hope to see you there!
Frank Gilbane
Download a complete version of this issue that includes industry news and additional information (PDF)
Trend spotting is a sometimes thing. Sometimes you observe real movement, and sometimes you just catch a blip. To catch trends at the Gilbane Conference on Content Management Technologies in Boston (November 30–December 2, 2004), we collected the trend-worthy thoughts of the half-dozen industry analysts in the “Technologies and Trends” panel that opened the conference, as well as from a trio of Gilbane analysts (Mary Laplante, Bill Trippe, and Mark Walter) and Tony Byrne of CMS Watch.
Integrating Enterprise Content
Enterprise Information Integration (EII) (or Enterprise Content Integration (ECI) – we consider them the same) isn’t a trend so much as an ongoing battle, one that now extends to the edge of the enterprise.
Mark Walter sees interest in EII increasing as organizations realize that for the foreseeable future they will be living with multiple content systems, and not consolidating all of their content into a single warehouse. (One conference presenter reported that 78 percent of organizations with CM have more than one system installed, and about 34 percent have six or more.) Consequently, companies must build scalable bridges, or “media buses,” to connect different content repositories and allow wider access to their content. That many face this problem was evident by the packed EII sessions and the lively debates they provoked.
In the marketplace, in addition to EII vendors such Context Media and metatomix, the major CM suppliers offer large, multifaceted suites to compete for EII business, and some vendors, like Vignette, offer their own EII capability. IBM’s recent acquisition of Venetica and Documentum’s acquisition of askOnce earlier this year signal growing awareness that vendors must not only make their own products work well together, but also work well with those of their competitors. This segment of the content market is still emerging, but we are now starting to hear success stories, such as the Meredith and Wachovia cases recently profiled in the Gilbane Content Technology Works (CTW) program.
Of course, the cost of EII isn’t just in the software licenses, it’s also in professional services, and organizations are still having trouble estimating that expense. Tony White of the Yankee Group put a number on that weakness: 15 percent. A Yankee Group survey of 20 EII projects reported that on average the estimated labor cost was about 15 percent of the actual labor cost, and that the organizations estimated that they would spend 72 cents on labor for every dollar spent on integration software. That was about 15 percent of what they actually spent, which was $4.73 per software dollar.
Making More of Multi-Channel Delivery
There is both widespread interest in multi-channel publishing, and real results to report. With the maturity of XML and the vendor weight behind it, we can expect the adoption rate to keep increasing in 2005.
Regarding XML itself, the long process of developing and solidifying XML and its related standards is drawing to a close. The process will be complete when XQuery becomes a W3C technical recommendation in mid-2005. This stabilizes the environment for developers and sends a clear signal to fence-sitters—and there are many, as adoption rates have not kept pace with predictions—that it is time to implement. The arrival of Office ML can only bring more users into the fold. All this encourages the wider adoption of multi-channel publishing.
Bill Trippe points to a strong increase in multi-channel publishing based on XML single-source content and transformation technologies such as XSLT and XSL-FO. The XML publishing and repository vendors support this, noting that they’ve seen an uptick of interest over the past six months and sales up substantially for the year.
Mark Walter sees an increasing interest in the use of customization and personalization in digital printing to make print communications more relevant and cost-effective. (It must be working; a GMC Software spokesman said the only thing holding back some of their customers was the speed of the printers.) The challenge is to keep print in sync with other modes of delivery, especially the web. The reality is that source content is still too often geared to a single channel.
Walter also noted that the market is realizing that high-quality design and XML automation need not be mutually exclusive. While ECM vendors have been slow to respond to this trend, he sees more progress in 2005, from both the major software houses and the niche players.
Related to multi-channel delivery is the need to move content management downstream, closer to the consumer. We hear the phrase “content in context” to describe this. We have long talked about reusing the same XML content element in multiple document types, and about repurposing that document type on multiple delivery channels. Now publishers can use XML to add targeted delivery to the channel definition, for example to define an item’s expiration date or priority in a presentation hierarchy.
This shifts the emphasis in multi-channel delivery from being about formats to being about audiences. Percussion, for one, is talking more about tailoring messages for specific audiences on a channel than about format conversion.
Compliance: A Trend or a Cost of Doing Business?
The topic of compliance, whether driven by external or internal factors, drew significant interest, and definitely more from the vendors than the analysts. Externally driven compliance requirements, Sarbanes-Oxley in particular, are front and center now. Internally driven compliance requirements, the organizational policies encompassing enterprise rights management and corporate governance, is potentially an issue with a broader reach.
Compliance in the context of CM was first raised in the analyst keynote panel, where the prevailing opinion was that compliance requirements were no more than a sub-driver in the decision to invest in CM. But Steve Ashley, who works for the investment firm Robert W. Baird, countered that compliance has long been a driver of CM adoption in such markets, and will remain so. Whether SOX compliance requirements alone will drive incremental CM demand in 2005 and beyond is unknown.
Bill Trippe noted that companies are certainly motivated by the various compliance initiatives, but this motivation has not yet translated into writing checks. He also noted the confusion in the market today, with everything from storage hardware to firewall software attaching itself to compliance, and various content technologies in line for a piece of the action. But he’s seen enough to be convinced compliance is a CM trend to watch.
Many vendors on the Expo floor were talking up compliance solutions, including Documentum, IBM, Infodata, Interwoven, Open Text, Stellent, Vignette, and Workshare. Compliance is also creating opportunities for specialists in XML publishing, document security, and rights management.
Process automation will be key. The first year of SOX compliance was painful, with too many companies relying on costly manual processes that must be automated. But compliance can include document and record management, rights management, mail and messaging control, search, collaborative workflow—a veritable stew of enterprise content technologies.
Compliance applications are not new. CM has had a major role in litigation support and regulatory filings for years and companies have built up significant XML expertise through using it as a submission format. It was the promise of financial reward or fear of penalty that drove the acceptance of CM in the pharmaceutical and financial industries. And so it may well be with SOX. The threat of financial scandal will enable CEOs and CFOs to make the business case for CM in public companies outside the already regulated industries, and this should spur CM investment.
And did we mention the Freedom of Information Act and the Patriot Act?
The preponderance of external compliance drivers may actually serve as a prelude to compliance at the internal corporate level. Mary Laplante looks at compliance and sees an upside-down wedding cake, with the largest layer at the top representing enterprise document policies and procedures. Subordinate to it is the smaller layer of enterprise rights management, and subordinate to that in turn is corporate governance. Finally in the smallest layer at the bottom is the individual requirement—for instance, SOX. The implication is to put corporate policies in place first, and respond to individual requirements from there.
Developing corporate content policies and rules—what to save and what to delete, who has access and who does not, what can be contained in an email attachment and what cannot—will be a major endeavor. Laplante sees growing awareness of the need for it, however, and this will grow over the next 18 months.
The issues surrounding what to save and how to save it bring added depth to the compliance discussion. It may be necessary to prove to a regulator or a court of law, for example, that some combination of information came together as content on a web page at a certain point in time. What is the role of CM in providing such evidence?
Alan Pelz-Sharpe of Ovum said at one point that we can’t afford to manage everything. Hadley Reynolds of Delphi cautioned the audience to beware of compliance as an investment sink. One of the ECM vendors has a new category of prospect, the “stay out of jail” customer. It all has to come together. We will surely be visiting this topic again in the coming year.
Content Management Market Trends
Steve Ashley brought the good news about our business: “The market is coming to the technology.” Content management companies are growing faster than those in the software space in general. Ashley pointed to two factors contributing to that success: product architectures are better, and products continue to offer more functionality. Companies can continue to grow if they address compliance issues like SOX, tame web sprawl, and show they can deliver on cross-domain functionality.
In the past year FileNet has closed four CM deals worth more than $5M, and deals that big for technologies other than imaging are significant. They suggest that financial service companies are extending CM across the enterprise for the first time, a trend that could continue for years.
Josh Duhl of IDC pointed to the bigger deals as evidence of vendors having trusted status in particular vertical markets by virtue of their superior domain expertise (FileNet in financials, Documentum in pharmaceuticals). They’re entrenched and won’t be replaced easily.
Here Come the Big Guys
What to make of Oracle and Microsoft entering the CM market? (Oracle in fact announced the release of Oracle Files 10g in early December.) Perhaps it is a sign of confidence in the CM market. Reynolds noted it will be some time before today’s CM vendors need to worry about Microsoft or Oracle, because the platform vendors can’t address the advanced needs of the verticals, as can FileNet and Documentum. Pelz-Sharpe wasn’t so sure; if Oracle offers the basics at $100/seat and sells library services as a commodity, it will be hard for a CM vendor to argue against them on the basis of extra functionality.
Oracle’s Rich Buchheim did provide some insight on Oracle’s strategy. They see a large market ahead, as companies who say they want CM today are only a small segment of the potential market. Upwards of 90 percent of all content resides unmanaged on file servers and desktops, and there is a huge gap between that unmanaged store and today’s CM systems. Oracle’s place is in that gap, and they expect to grow when those file servers are upgraded or replaced by content servers.
Application Suites, Best of Breed, and Depth of Pockets
When asked to comment on whether to base an implementation strategy on best of breed or suites, the analysts acknowledged the importance of suites, but opinions varied on implementation.
Hadley Reynolds claimed that there is no best of breed anymore; the idea’s been done in by the pace of mergers and acquisitions, and the suites are what remain. Mike Maziarka countered by noting that IT and executive respondents in CAPV surveys prefer best of breed solutions to the suites, but he did admit finding the best of breed is harder now. Alan Pelz-Sharpe suggested that for large organizations, suites make sense, but smaller organizations might be better off elsewhere, perhaps on hosted applications.
A large enterprise needing a full range of ECM services will probably select an application suite. But the mid-market customers – those with market capitalizations of up to $5B – have been doing well with best of breed.
Until recently, mid-market companies viewed CM software as too costly, too complex, and too hard to learn. Its scale was wrong for the CM problem being solved. They could not find a right-sized product to fit their needs and budgets, so they built their own. Today that is reversed. Best of breed vendors are offering products that are less expensive and less complex, with interfaces that enable non-technical users to participate in content development and management. In the words of one vendor, “underserved markets are where the innovation is.”
There were numerous companies at the Gilbane show competing in this space, including Ektron, Fatwire, HotBanana, Percussion, RedDot, Serena, SilkRoad Technology, and others. They focus on one or two specific technologies and work with partners. All are built on principles of ease of use. And many are replacing home-grown content managers. There is no predicting what merger and acquisition activity will do to their ranks, but in the meantime, if innovation is a trend, it was on display in Boston.
Hosted Web Content Management Services
Hosted applications are not new, and they have been tried with varying degrees of success for CM. However, market interest in Atomz and CrownPeak indicate that at least some of the vendors in this market are getting it right. Four members of the analyst panel suggested that especially for small and mid-sized companies, it was worth looking at the hosted approach for a variety of reasons. One is favorable economics: rather than buying an application for hundreds of thousands of dollars, a company can lease much of the same functionality for a few thousand dollars a month. Second, site implementation time is measured in weeks rather than months. They also excel in the ease of use department.
The hosted applications only provide WCM, which limits their use to this single but sizable market, where there’s a lot of room to grow.
Search Steps Up
Mary Laplante sees a growing importance for search technologies, not just to answer queries but also to mine search results, build subsets of them and target them for specific audiences with specific interests. The search landscape is moving away from its knowledge management focus, with advances in categorization, taxonomies and their applications, and metadata tagging. Given the continued growth of unstructured content, it opens up some new market opportunities.
It is an indication of the sophistication of the search marketplace that you can now talk about taxonomies without having peoples’ eyes glaze over.
Caveat Emptor
Our last word in trends comes from Tony Byrne of CMS Watch, and it’s about you, dear readers: Byrne sees buyers who are both more sophisticated and more jaded than they were a few years ago. They have been through a CMS implementation and want to “do it right” this time. They have practical requirements and a sharp focus on user needs in general and usability in particular—having been burned previously by hard-to-use systems that weren’t adopted.
Byrne also sees buyers who are looking for point solutions to specific business problems or scenarios, rather than bending a one-size-fits-all product to their particular use case. And they view content management as a process rather than a series of discrete projects.
If the buyers are getting smarter, it’s a sure sign of a maturing market.
Dick Vacca, richard.vacca@comcast.net
