The spirit of competition is at the heart of human nature. In fact, it's next to impossible to imagine an area of society untouched by competitiveness. In 2001, Integrated Solutions featured a few good competitions in technologies such as ERP (enterprise resource planning) ("Tame The Giant With Brains Not Brawn," March 2001) and WMS (warehouse management system) ("WMS Market Merge And Purge," June 2001). Right now a new technology competition is heating up. It's a battle for market share within the ECM (enterprise content management) space. ECM solutions are used to manage all traditional unstructured files like documents, reports, and rich media, in a single system. And, with gladiators in the arena such as IBM, Oracle, and Microsoft you know it's going to be a competition worth watching.
In This Corner - Weighing In At 800 Lbs.
META Group (Stamford, CT) Senior VP - EBS Andrew Warzecha predicts, "traditional document management vendors will disappear after 2002, being undercut at the low end by industry giants like Oracle, Microsoft, and IBM. Other document management vendors will be subsumed at the high end by catalog, portal, collaboration, and process automation vendors. For document management vendors to survive the crunch, they will have to evolve into ECM providers or find some other niche." Additionally, the META Group predicts that the ECM market will grow from around $3 billion in 2001 to around $10 billion in 2004. With that kind of money at stake, you can bet ECM vendors are not going to give up their piece of the pie without a fight.
Meet The Contenders
Rather than taking the analysts at their word, let's see how the competition plans to defend its turf. Whitney Tidmarsh, VP of product marketing for Documentum (Pleasanton, CA), says, "We take a different approach than many other vendors in the market. We take a platform approach as opposed to an application approach, which enables our product to be readily integrated with other enterprise solutions such as CRM (customer relationship management) and ERP solutions and other content-rich applications such as portals." Documentum's strategy is to be able to manage all the content that enterprises create and capture such as text, XML, video engineering specs, audio, and images, rather than just Web content. This type of solution is able to manage how enterprises deliver information, i.e. portal, fax, wireless, or e-mail. Rather than focusing on one specific need within an enterprise, like some WCM (Web content management) and portal vendors do, ECM vendors attempt to address multiple needs such as document management, WCM, digital asset management, and content management.
While some vendors argue that focusing on one niche is better than trying to be all things to all people, like Documentum may be accused of being, recent history suggests that broader may be better. WCM systems have been associated with commerce services such as B2C (business to consumer), whereas ECM systems have aligned themselves to enterprise-wide applications such as ERP and CRM. The challenge of the future will be for ECM vendors to integrate content management and portal technology. One way for vendors to become a one-stop solution is by merging with or acquiring vendors with niche competencies. An example of this strategy is seen in CEYONIQ, a global company with world headquarters in Bielefeld, Germany, and U.S. headquarters in Herndon, Virginia. CEYONIQ is a new company created out of the January 2001 merger between TREEV, Inc. and CE Computer Equipment AG.
The main goal of the merger was for the newly formed company to offer enterprise-wide CLM (content lifecycle management) solutions that could be used in a variety of vertical markets and business applications for industries such as banking/financial, telecommunications, insurance, and government. CEYONIQ is very much aware of Microsoft's threat on the lower end and IBM's and Oracle's threat in the high end of the ECM arena. "We see our niche in the middle of the spectrum," says Steve Wood, CTO of CEYONIQ, Inc. "We want to be in areas that are not just looking for a low end utility nor are they looking for a high end solution to tie into their IBM MQSeries." CEYONIQ has found its niche with growing companies like Sterling Bank and even within new divisions of large, established companies like BellSouth. It takes a two-part strategy to sell to this niche market. "Rather than trying to sell a technology we focus on selling a business solution - complete with a predefined 6-to-12-month payback period," says David E. MacWhorter, president of CEYONIQ, Inc.
The difference with this approach compared to the traditional technology provider is that it involves a good deal of up-front consulting and time spent getting to know the customer's pain points. "Our CLM solutions strategy has been to embrace both sides of the .Net versus Java debate," says MacWhorter. "The reality is that Microsoft's .Net platform and its SharePoint Portal Server are not real solutions today. And while IBM has the platform they do not have the connectivity to run their business."
Another Option: Work With The Competition
One other option that some vendors may take to avoid going head to head with the big boys is to examine the larger vendors' solutions, find areas of weakness, and offer a niche solution that complements rather than competes with ECM solutions. One vendor taking this approach is Quest Software (Irvine, CA). "Quest finds its niche by keeping applications up and running 24/7," says Dan Krpata, product marketing manager, high availability solutions at Quest. "We offer specific tools that enterprises use to meet specific needs such as keeping databases up and running. Additionally, we offer tools that perform data replication and report management functions that enterprises use to bring data from disparate platforms into one central repository." Quest offers enterprises the advantage of being able to transfer data without the use of triggers. Triggers are pieces of code such as SQL statements that execute an action when a database is modified. "Our tools can offer companies up to a five-fold increase in data throughput over trigger-based data migration solutions," says Krpata. "Additionally, Quest's technology enables companies to replicate long columns (i.e. memo fields) of data that trigger-based replication tools are unable to accommodate."
Analyst groups such as META Group do acknowledge that some niche vendors will survive the ECM brawl with such special offerings as document automation, output management, high-volume document imaging, and regulatory compliance solutions. The key to this group will be to align themselves with specific suite vendors as a specific integration solution. If this happens then potentially, unlike most competitions, there can be many winners. Until that utopian day arrives, however, vendors will be feverishly dodging punches and firing back a few hooks of their own. No matter which vendors end up as the surviving few in the next few years, there will ultimately be many winners, namely ECM users, who will be able to purchase ECM solutions at a lower cost and with more functionality than before the battle raged.