Now, don’t get me wrong, ECM vendors are out there making plenty of compliance-centric sales and companies are definitely buying. They are doing some things right. But if you really think about it, are the sales that have been made more a function of the robustness of compliance-related solutions and the vendor’s sales skills? Or are they more a function of the fact that many organizations have guns to their heads and feel they must do or risk serious sanctions and likely job losses? Seriously now, every once in awhile there are certain “sexy” and/or timely technologies that prospects don’t really need much motivation to buy. They are practically sold before a salesperson even walks in the door. Government mandates and the risk of non-compliance makes for a lot of very eager buyers.

First, a little background on the Sarbanes-Oxley Act. SOX aims to solve some the problems inherent in corporate governance, financial disclosure and public accounting. A couple of things leapt out at me when I first began researching SOX’s implications with regards to technology. First, there is no mention of software or any technology to be found. Becoming compliant does not require it. Second, the sections that apply to the corporation as opposed to an outsourced RPA (Registered Public Accounting Firm) are fairly easily described. Compliance involves a set of procedures, reports, records management and retention, and committees. The sections that are most commonly sited as the ones requiring compliance include:

Section 301 – Procedure and policy for anonymous complaints
Section 302 – Corporate responsibility for financial reports (Certification process)
Section 404 – Management assessment of internal controls
Section 409 – Real time disclosure (Authoring and review)

Even though only the larger, publicly traded companies are actually required to comply with SOX, many organizations are taking the opportunity to take one step or another to develop best practices and improve their risk management capabilities and internal control processes. Whether out of a legal need for compliance or just to be safe, Sarbanes-Oxley is driving many initiatives across many organizations.

From a marketing perspective, ECM vendors are drooling. The synergies between SOX compliance and ECM solutions are obvious. In fact, even prior to SOX, most ECM marketing messages revolved around the ability to bring together “content, people, and processes.” Whoa. Sound familiar? As noted above, corporate SOX compliance involves procedures (processes), records management and retention (content), and committees (people). The parallels between a proven ECM message and SOX compliance requirements are striking. This is why ECM is a natural solution set from which SOX compliance can be achieved. That message is not lost on vendors, to be sure.

In the world of solution selling, finding “pain” is one of the key steps in discovery. Without finding a pain that your solution can help ease, getting a prospect to understand why they should buy it is infinitely more difficult. ECM vendors don’t normally have a problem with finding need. There are so many possible real and money-saving ways that ECM solutions can be deployed, not finding some need somewhere in an organization should really scare sales managers. Add SOX to the equation and enthusiastic buyers should not be hard to find.

So given all of the reasons why ECM and SOX make great bedfellows, why isn’t the market going through the roof as many anticipated it would?

Well, regardless of the synergies, there are still some difficult challenges that vendors face when taking their compliance solutions to market. One big one is in the fact that SOX isn’t the easiest thing in the world for organizations to understand. The gist of it is certainly understood, but the details can be somewhat confusing nor is it completely definitive in its definition of what constitutes compliance. This confusion can lead to lengthier sales cycles as organizations are learning as they go.

A second hurdle that vendors may see in the market is that, still, no matter how much vendors wish it were the contrary, SOX compliance does not mandate a software solution. Once the details are understood, however, it does become apparent that it would be difficult to do without. How exactly would you propose being able to produce email without some way of managing said email? Well, it would be hard. Nevertheless, organizations are still going to investigate all possible options to be compliant, technical and otherwise. In some cases, because SOX is confusing and the solutions that address it are new, some organizations are looking at simple compliance first, with more automated and sophisticated compliance later. That reticence poses a potential problem for ECM vendors.

Another barrier has been the sheer volume of solutions that have suddenly appeared on the market. ECM vendors are not alone in attempting to address the need. Business Process Managment (BPM), Business Intelligence (BI), Email Management (EM), Customer Relationship Management (CRM), and many other traditional tools have all launched products that address compliance in one way or another. Throw in brand spanking new solutions that don’t do anything else and you get a market that is struggling to define itself. To a buyer, it can be daunting to compare solutions that are light years apart in approach. To the vendor, selling against solutions and competitors you have never heard of makes it very difficult to differentiate in a coherent, knowledgeable way.

So, how should vendors be approaching prospects with these concerns?

First, I think they need to focus more on compliance education and less on the technology. Most organizations are going to feel overwhelmed by jumping straight to a solution when they can’t quite even comprehend the problem. Imparting some wisdom and demonstrating that you understand the problem will help gain trust and confidence.

Second, recognize that your solution solves only a part of your prospects problem. ECM solutions generally operate under a central-repository metaphor. Complete control and complete compliance would require an organization manage 100% of compliance-related records in one or more repositories. While ECM solutions do this well, in some organizations it could be an absolutely monumental undertaking. Visibility into compliance policies and risk is the key, not centralization. Put ECM where it makes sense and establish good partnerships to fill the gaps.

The last, and in my estimation, most important message to consider is size and scope. I think this is where vendors have generally missed the boat. Remember, SOX really only involves information as it relates to financial reporting and best practices. Becoming compliant does not require looking past those specific processes and information. And while there is plenty of opportunity to sell compliance specific solutions, the deployment of said solution is still going to be somewhat limited in scope. I believe you should be thinking big as you aim small.

Compliance should be used as starting point for organizations to completely reevaluate their risk management policies and procedures on an enterprise scale. And don’t limit the discussion to Sarbanes-Oxley. There are plenty of additional compliance issues that affect various industries. The SEC, FDA, DOE etc. all regulate various industries in one way or another. Mix in different countries and their own versions of similar regulations and you should quickly see that the problem is much larger than any individual rule or piece of legislation. Each issue carries with it its own urgency and criticalness.

ECM solutions, by their very nature, are also flexible and open enough to position companies for future changes in regulations. The case could be made that they are nearly immune to obsolescence as many, more vertical, point solutions may be. ECM packages don’t need to be rebuilt to conform with new regulations, they just need to be repackaged. This has obvious benefits to the large organization looking to preserve what will likely be a significant investment.

While SOX in and of itself is finely focused, don’t miss the opportunity to do bigger and better things. There are plenty of nice, economical and very nimble solutions that address aspects of SOX compliance. ECM solutions differentiate with their scope. Don’t forget the ‘E’ in ECM. Organizations will quickly realize that as a platform, ECM solutions can help solve many compliance and records related problems, not the least of which is Sarbanes-Oxley.

There is a general willingness on the part of management to better understand how the organizations under their control are managing critical business information. You may never again have such focused attention of CXOs. They want your help. They will be good customers. Think big, but focus.

As you move forward with the ear of compliance minded organizations, try to make sure that Sarbanes-Oxley and other compliance related initiatives aren’t simply replacing traditional initiatives. Sure, it can be the proverbial “foot in the door” but a wider ranging analysis of risk management policies will yield additional opportunities. Economies of scale suggest larger deployments with broader reach will provide much more bang for the buck and provide better protection from additional regulation. CXO’s, now more than ever, are likely to be exceedingly willing to kill many birds with one stone.

Rick Taylor
rtaylor@ecmreport.com

Good for everyone [ 58% ]
Bad for everyone [ 16% ]
Good for Vignette, Bad for Tower [ 12% ]
Bad for Vignette, Good for Tower [ 14% ]

Totally everything together, the numbers could also be looked at like this.

Good for Vignette – 70%
Bad for Vignette – 30%
Good for Tower – 72%
Bad for Tower – 28%

Obviously, most agree this an equally good deal for both the Vignette and Tower communities.

I kept this poll open longer than normal for a couple of reasons. First, until Mobius acquired eManage, there hadn’t been another notable deal to track. But more importantly, I was a bit curious to see if opinions of the deal would skew over a period of time. There is frequently an initial optimism that disapates after a period of time. My poll did not reflect this nearly as much as Vignette’s share price.

There was a bit of an upswing near the announcement, but it has come crashing down since. On January 2, about a week prior to the announcement, the share price was at $2.29. Between then and January 21, about a week after the announcment, the price rose to $2.82. Since then, the price has steadily declined to where it is now in about the $1.50 range setting a new 52 week low in the process.

What does it mean? I certainly don’t have a clue, nevertheless, it doesn’t necessarily have to relate directly to the acquisition. Markets and tech in general are also seriously down over that same period. And while ECM is considered to be a hot technology, over this period of time, none of the primary players have done particularly well.

It is important to note that Mobius did not acquire eManage. Instead, they acquired certain assets including eManage’s records and email management technologies. As such, it remains to be seen how many (if any) deals this brings to Mobius. Regardless, eManage is a very small company and however the deal was done it is unlikely to add much to the Mobius bottom-line any time soon. 

While the deal may have little to no financial affect, it is nevertheless interesting to look at what the deal means in the broader scope of the ECM industry as a whole.

First, it is an obvious continuation of the convergence we have seen recently. Smaller, niche players, with tools that handle pieces of the ECM umbrella, have seen their technology become better suited as a portion of a broader offering.

Second, and in my opinion, more importantly, this deal reflects and helps further refine the actual definition of ECM. Few would dispute that records and email management are core components of a complete ECM offering. But when organizations like Mobius act on this definition it serves to clarify and remove doubt about where the industry is headed.

Simply defining ECM through practice and not press release is, nevertheless, a double-edged sword. On one hand, it helps consumers by making it easier to compare the merits of the various offerings. On the other hand, it can appear as if many of the vendors in the space are being reactive to market pressures instead of proactive. They are checking features off of lists instead of innovating bigger, better and broader levels of functionality.

What is happening in reality, however, is probably just a matter of how each player is executing their long term plans. The bar has been set and the big picture of ECM has been defined. A likely step one in a game plan would be to simply fulfill the designated requirements. Step two will likely take us to the next level of additional functionality and additional differentiation.

Records and email management, in particular, are two of the more timely and important areas of concern for many organizations. With Sarbanes/Oxley and other regulatory compliance issues being thrust to the forefront of corporate initiatives, these technologies have leapt out as a major catalyst for reviewing wider ranging ECM initiatives. To the ECM vendor with the right offering, email and records management is an excellent way to get a foot in the proverbial door. No doubt, Mobius and others see this and are executing accordingly.

Maybe, but not necessarily. I can see where the sentiment would come from. Optika never made many waves at an enterprise level. They were certainly entrenched in the very definition of mid-market. But much of Optika’s presence there was a consequence of their suite of products and where they had the most success.

The Optika products lend themselves to more transaction-oriented business processes such as Accounts Payable. A natural side effect of transaction-oriented solutions is that they tend to be directed at a very focused set of business problems. These problems, by definition of their scope, often lead to deployments within the core group of users affected and not necessarily to the entire enterprise.

Now, I’m not saying these solutions don’t have wide audiences within an organization, they do. But they tend to not expose a tremendous amount of functionality above and beyond the basic need of the use case. Users tend to be in and out and they don’t linger. Need to pay a bill? Boom, there it is, paid, gone. Move on to something else.

With other, less transaction-oriented ECM initiatives however, users tend to live there and do lots of different things. They collaborate on documents, they send some emails, they review work items, whatever it is they need to do. Those sorts of ad hoc functions lend themselves a bit better to larger-scale, all-encompassing, enterprise-scale use cases when you need to share information with a broad range of people inside or outside of your organization. This capability is what Stellent brings to the table.

If you just look at the technology for the technology, Stellent acquired a piece of the ECM pie. But it’s the entire spectrum of their ECM offering that will dictate their message and their target market, not any individual component. As a piece of a larger solution, I believe the Optika products could play quite nicely.

Stellent’s challenge, however, is not messaging. They have been talking ECM and integrated components for awhile. Their challenge is going to be maintaining this vision and extending it to include the Optika suite within the product offering. That challenge could be made more difficult by the fact that the products do not share common infrastructures (J2EE/WIN). They can’t play in large enterprise data centers with mix and match back ends. I believe if you watch their integration plans closely, you will get a clear cut indication of their direction. Moving forward, common, integrated infrastructures will be key to playing on the enterprise level. If their plans don’t include this in a relatively short period of time, you may be able to translate that to a commitment to the mid-market.

Even still, is a commitment to the mid-market a bad thing? I am of the opinion that one of the side effects of the consolidating ECM market is a more well defined mid-market. Traditional players there are leaving to focus on the enterprise but there are still many excellent and viable alternatives that will rush in to fill the void.

One thing about the ECM market that I have always noted is that there is a tremendous amount of low hanging fruit. ECM is a very easy to understand concept with demonstrable ROI and it solves problems that every organization has, big or small. Catering to the middle of the market where good products can be had at good prices is not necessarily a bad thing. In fact, there is a lot of business to be done there.

In reality, the move by Stellent could be viewed in a couple of ways. Yes, it does expand their presence in the mid-market and could solidify them there. On the other hand, the Optika products bring Stellent that much closer to realizing the full ECM product vision, thus enhancing their potential attractiveness to larger organizations and more enterprise-scale deals. Stellent could go a number of ways and, ultimately, that flexibility could be the biggest and best reason to have done the deal.

Rick Taylor

I wrote somewhere recently that: “I believe the industry finds itself at a critical juncture. I wouldn’t be surprised to see more deals, but I think the market, for the most part, has defined who the players are and what the game is. There have been a lot of strategic moves lately, but now start looking for more tactical moves. The press releases about “we bought somebody” need to be followed by “we won this deal with a combined offering” and “we released this new integrated product.”

Well, sure enough, OpenText recently has delivered a couple of crucial press releases that speak to this shift back to tactics from strategy. These are the releases:

Open Text Launches Enterprise Instant Messaging for Livelink
Open Text and IXOS Establish Integration Plans for Industry-Leading ECM
Open Text, Ixos To Introduce Combined Pdts Within 6 Mos

These releases are not coincidentally timed with a very noticeable shift in their branding of the products they recently acquired. Nearly everything has been consumed by the Livelink brand and as a result, their marketing message is now very neat, tidy and compelling. Though changing the name of something obviously does not make it better. But when combined with press releases about scheduled integrations as well as new product introductions one has to be impressed.

OpenText appears to be executing their message nicely and a bit quicker than their newfound industry competition. This execution is apparently being noticed by investors. The value of their stock has risen dramatically over the last 30-60 days.

Your Competitive Landscape

ECM tools in general can have a serious impact on your business. They can help increase employee productivity, reduce costs, improve customer relations, provide competitive advantage and, if applied in a mission-critical environment, can contribute to your bottom-line. The ROI on a carefully thought-out initiative can often be realized in a staggeringly short period of time. Look closely and you will see it. Through natural growth and maturity as well as through mandated regulations such as Sarbanes/Oxley, the industry is poised for significant growth. MetaGroup estimates the ECM market will reach $9.3B by 2007 and that by 2006, approximately 60% of G2000 organizations will standardize on a strategic ECM framework. I believe ECM has the potential to be the next ERP or CRM and may very well create the next behemoth. In fact, don’t be surprised if they and/or others enter the mix for this reason. In any case, you get the idea. This is BIG. The market is starting to see this and rightfully so. The benefits of ECM are real. If you are a consumer, take notice and act because your competitors most certainly are.

State of the Industry

Despite the major question marks regarding where the products themselves will end up, at least one thing is perfectly clear – the industry appears to have finally agreed on what it takes be considered an ECM vendor. Look no further than recent acquisitions for proof. It is obvious that everyone is taking a “me too” sort of attitude. Formerly disparate technologies are being acquired and/or built and brought under the umbrella that is ECM. The fact that there is some agreement is a very good thing for the consumer. It will, finally, bring a certain level of predictability to what was traditionally a mish mash of solutions being provided by an uncountable number of providers. We know where the industry is headed and that is a very good thing.

ECM’s Competitive Landscape

The market has gotten so competitive in the last year or so that market and mind share is at the forefront of most vendor’s initiatives. They are going to be trying very hard to validate their message to their stockholders. Signing up a new customer is a way for them to say “See, we did a good thing by acquiring so and so. Our messages and philosophies are working.” This is a critical juncture for most vendors. They have a serious need to be able show proof that their dealings were better and will have a longer term impact than their competition. To the consumer, the vendor’s fervent desire to see their efforts endorsed by the market means that there are good deals to be had. Right now, they want validation and doing deals is how they will get it. Down the road, when the dust has settled and they know their place, the same deals may not be around. We all know what happens to prices when the word “Enterprise” is added to a solution. They accelerate at warp speed. If you act now, the confusion and the uncertainty can actually be used to your advantage.

Mature Technology

Forget the hype and the future potential and look closely at what exists today. The reality is that the components that make up ECM, whether integrated or not, are a set of valuable and proven tools that have been around for a long time. There are happy customers all over the world. What we are seeing is an evolutionary process not a revolutionary one. If you remember to keep focused on the business problem, the technology will take care of itself. Now more than ever, buy based on the return on investment and gains in productivity. Decouple the state of the market from the solution itself and lots of headaches go away. This is not new, this is how you should be buying technology under any circumstance. Buying technology for the sake of the technology does not make much sense. It will either solve an issue or not. If it does, ask yourself if futures really matter. What’s the worst case scenario? If it doesn’t solve a problem, why are you even looking at it? Keep it simple, solve a problem, buy it.

Feeling Better About Uncertainty

In a contracting market like we are in, buyers tend to focus on “Why we shouldn’t” instead of  “Why we should.” Consumers feel a bit like a deer in the headlights – frozen, confused, and not sure which way to go. Prospects that were previously working with one of the vendors that acquired another company, are probably not affected significantly. They may now just have a few more things on the menu to choose from. On the other hand, prospects of a vendor that just got acquired face a far more difficult dilemma. The due diligence already performed on the vendor must start over again. And rightfully so. You are going to want to know who you might be buying from. But, generally speaking, you will likely be satisfied. The new players are established companies with lengthy histories and track records. Determining whether a vendor is a strategic fit for your organization should not be difficult.

Middle Market

For consumers that fit the “middle market” demographic, determining the vendors with which to create strategic partnerships can be of critical importance. Many in this group feel the need to receive a little extra TLC than the typical big, corporate software vendor generally provides. At least, for the price. One offshoot of the recent industry convergence is the widening of the middle market. In other words, vendors that traditionally played in the mid-market are now gone. They’ve been swallowed by the bigger fish. Some of those smaller, newly acquired companies had long standing and successful traditions of filling the needs of the middle market. This dilemma is real and one that mid-market consumers are struggling with. But there really is no need to fret. There are plenty of capable solutions still in the mid-market and plenty more ready to fill the void. In addition, the bigger, enterprise-focused solution providers would be silly to abandon the mid-market completely. There’s just too much history and too many happy customers for them to do that. Besides, as I mentioned before, as the market sits right now, successful new case studies and happy new customers are highly sought after.

Product Integration

Another major issue that buyers are hesitant about is product integration. The natural instinct following a major acquisition or product set overhaul is to want to wait and see how things shake out before making a decision. Every vendor in the industry has been through an acquisition of one sort or another so they are all in the same boat. Regardless, I wouldn’t worry too much about it. My reasoning is rather simple.

You need look no further than the actual definition of ECM – “Extremely Cannibalistic Market” – errrrr – “Enterprise Content Management”. Underscore the Enterprise. The reason there has been so much cannibalism is because the product functionality that define ECM are, in fact, very synergetic with one another. The real value that the service provider adds is through exposure and enhancement of these synergies, not ignorance of them. ECM, by definition, mandates that these areas of functionality be brought together. Two separate products that happen to come from the same company does not an ECM vendor make. So whatever the vendor might be saying to you, forget about it. It’s going to happen. It has to. They know this.

Besides, actual, true, seamless integration is many moons away. It is a very complicated proposition and one that will likely take years to fully materialize. Frankly, I would be more worried if I heard a salesperson actually attempt to explain an integration plan in great detail. It’s too early to really know for sure, it’s going to take a long time and will likely change anyway. They may have a conceptual plan, that’s fine. But I would never base a decision on futures. Focus on the individual pieces and how they will solve an immediate problem and leave the issue of integration alone. Consider integration to be gravy and it will make your evaluation much simpler.

Summary

The market is certainly interesting and a bit confusing right now but don’t let that detour you. ECM is an established technology that can deliver real and tangible money savings to your organization, today! The primary vendors are established and successful companies and, especially right now, care very much about your success and are willing to go out of their way to help you. Take advantage of this unique opportunity. It may not last forever.

OK. Maybe that’s just a wee bit overstated… but let’s take a close look at who this really affects… it affects me. That’s right. Lil’ ol’ me. I’ve had to cave in to the what the so-called “industry” wants to call itself, and, yet again, against every ounce of my moral fortitude, I’ve had to begrudgingly… change the name of this web site! Don’t they have feelings at all? Don’t they realize the mass hysteria that is caused by the tidal forces of attempted acronym redefinition? I mean, what happens when all of the letters and combinations are gone? Will we create a 27th letter? Will all innovation completely cease? Or will we simply rip the very fabric of the space-time continuum and destroy the entire universe? Hmmmm? Eh, probably not. But in the very least, don’t they know when they come up with this stuff that there is an entire community of people that gasp, sink lower in their chairs, and are forced to begin a massive search and replace process? Ahhh, what one must feel like to have that kind of power? I can only dream.

I have spent the last dozen or so years attempting to educate organizations about the benefits of ECM by reducing and simplifying its complexities to a set of practical and commonsense value propositions. Boy have I had it all wrong. Just the other day, over a carbohydrate-laden meal consisting of a Red Bull, Ben and Jerry’s, and a stack of Peeps, I had an epiphany. OK, maybe it was a sugar-induced coma – nevertheless, it occurred to me that I had been on the wrong side of the movement. I had been resisting when I should have been acquiescing. Well, I pledged then and there that I would resist no longer! I completely and firmly entrenched myself in the “ECM” camp. I decided I needed to do less to educate and more to “enhance the brand.” So, once I came to that conclusion, I decided it was time to figure out what it actually was.

I set about my task by reading some books, talking to some philosophers, and sitting under an apple tree with my focus completely turned inward for intense reflection. OK, fine, I did some Googling, you happy? In any event, I was very disappointed with what I found. I determined that Everything’s Completely Misunderstood. There was no shortage of Exponentially Complex Meanings in the mass of Extensively Confusing Mumbo-jumbo. Most of the information could be classified as an Endlessly Complicated Mess of Extremely, Completely, Meaningless phrases that people use to define ECM. I can only conclude that whoever came up with it was an Exceptionally Competent Mismarketer.

I also found that in the past, various sub segments of the industry have been known by strikingly similar things. Content Management, Web Content Management, Document Management, Integrated Document Management, Collaborative Document Management, Collaborative Content Management, on and on. Though noticeably similar, most of these titles describe different product sets in different stages of their respective evolutions. It’s no wonder that people are bit confused as to what “ECM” actually means.

If you are a consumer trying to make some sense of the ECM market, relax a little and just focus on the task at hand. Make the process less about the acronym and more about the business problem you are trying to solve. Think less about the competitive landscape of the market because now more than ever, you are likely to be comparing apples to oranges. Remain diligent and focused on how a particular solution is going to help you and your organization in a very specific, tightly defined use case. If you keep it simple, the state of the market and what the vendors are doing is somewhat irrelevant. Their solutions will either work for you or they won’t. Don’t look too much to the future, keep your decision making here in the present. Let the stockholders do the speculation.

If you are a vendor, remember that your prospects care about how you are going to solve their problem, now. Not a year from now or further down the road when the results of an acquisition are finally playing out. You can add value to your solution through futures but be careful not to try to define your value propositions on things that are not yet material. It’s a fine line to walk to be sure, but one that leads to a slippery slope if crossed. It’s an art form that is not possible to perfect, but one worthy of pursuit.

Oh, by the way, ECM in this context actually means “Enterprise Content Management”. What the….? Huh? I know. I’m with you.

The single source model certainly has benefits to the consumer. In theory, the integration of the technologies should lead to quicker deployment times, better integration with legacy systems, and a lower total cost of ownership. Those things are all great, but at the end of the day, where are we? It is way too early to tell for certain, but that won’t stop me from making some predictions about the future of ECM.

Once the dust settles and offerings are in less flux, one has to recognize the potential for a lack of differentiation amongst the new industry players. We are going to end up with a handful of companies doing pretty much the same thing. Do you have document management? Check. Workflow? Check. Web content management? Check. This all looks nice as a press release but when it gets down to deployment and use cases, customers will ultimately want and need more. As certain technologies become commoditized, vendors need to find new ways to differentiate themselves.

Unfortunately, in the technology sector, sometimes the lack of something makes you more conspicuous than the strengths that set you apart. If you can’t italicize a word, you have no business calling yourself a word processor. That mentality has helped fuel the recent convergence in the ECM space. “You mean you don’t have records management? Bye-bye.” But one or two years from now, what is going to differentiate one mega vendor from the next? Looking ahead, what are some of the new things that need to happen for a vendor to separate themselves from the pack? Where should ECM go next? Ever hear of Expertise Management or Place-based Presence? Read on…

The Players

The convergence that has defined the ECM space has seen a blending of web content management, document management, imaging, workflow, records management and collaboration tools.

The consolidation has come from a variety of different directions… some WCM providers have swallowed smaller ECM players (i.e. Interwoven/iManage, Stellent/Optika, Vignette/Tower, IBM/Green Pasture). And some ECM vendors have swallowed smaller WCM providers (i.e. OpenText/Gauss/ IXOS). And, of course, there has been the lone “mega” deal (EMC/Documentum/Legato) that brought an outsider completely into the crosshairs of the other industry players. Add FileNet and Hummingbird to this list and you have a pretty good starting point for who the players are until the next set of acquisitions take place.

Notably absent are some of the other heavy industry hitters that either have incomplete offerings or have nothing at all. I would include Oracle, Microsoft, SAP and Peoplesoft in this list. Don’t be surprised to see one or more of these vendors step up to the plate by making the next “mega” deal. I wouldn’t even be surprised to see someone like IBM try to buy more market share. In any event, here is my updated watch list of the ECM market up to and including the announced Vignette acquisition of Tower Technology.

The Product Stack

The definition of ECM from a product perspective is in flux every day. Not everyone offers exactly the same things. That would be really boring. Nevertheless, the convergence taking place is making the definition of ECM much more clear. In my estimation, the product stack, as it currently sits, looks something like this:

The Future

The consolidation taking place has begun to highlight and validate the symbiotic relationship between these product types. However, the current trend simply has various industry players checking off a menu of functionality through acquisitions or development. Again, I believe the gap between functionality offered by the various vendors is shrinking the further we go along. Thus far, there has been a lot of reaction to industry forces, but very little innovation, creativity or pro-activity. What follows is what I believe needs to happen in the ECM space for the solutions to grow and, ultimately, for the solutions to differentiate themselves with added value to the consumer.
 

Better Integration with Line of Business Applications

One realizes early on that in the complete life cycle of a piece of information, seldom does it exist within a vacuum. There are always other pieces of information that are relevant and useful. Frequently, those other pieces of information are additional documents, pieces of paper, emails, etc. This issue pretty much describes what traditional ECM addresses. But more often than not, that content is also relevant within the context of data that exists in other locations such as an accounting application, supply chain management application, or other relevant line of business database. Portals exist to address this need of information aggregation. For the content to be truly maximized, it must be able to be viewed in this context.

Look for three things to happen that will address this need. First, there will be more and better integration with portal technology. Generic portal vendors and ECM vendors need to talk about how to address the presentation needs of the general public. Second, some ECM vendors either already have their own portal products or have their hand in content delivery and presentation. Making the ECM platform the backbone of other content aggregation efforts is certainly one interesting story to be told. And finally, look for some of the big line of business application vendors like Oracle, SAP, Peoplesoft, Siebel, etc. to be the next set of acquirers. Forget generic portals, they’ll just offer native ECM capabilities tightly integrated with their core application offerings.
 

Business Process Management

I, like many others, frequently confuse “workflow” with business process management. According to BPM vendors, workflow is a subset of BPM, and, at least at a functional level, I would agree. Workflow tools, as they exist in the current ECM stack, tend to concentrate on how and when to route around a set of documents, images or other content. BPM does this as well, but it does workflow one better. In addition to the routing around of content, BPM tools also act as an integration point to external, line of business, legacy applications. For example, a loan officer may be delivered a packet of documents in which to take action. The action required may be to collect a bunch of information off of the forms and get it into their loan software. A BPM tool would not only deliver the content, but it would also provide the necessary integrated access to the loan database.

In many instances, BPM tools act as the glue to disparate systems. And, regardless of the number of things it integrates, it is still able to manage the complete process and gather performance metrics along the way. Very useful stuff indeed. BPM is certainly many evolutions ahead of workflow. However, I believe it still belongs in the ECM stack acting as the glue between unstructured content and structured data. Look for ECM vendors to embrace the more comprehensive BPM model and significantly enhance their existing workflow engines through upgrades or acquisitions.
 

Records Management and Email Management

We are already starting to see a lot of activity regarding “Records Management.” RM describes functionality that allows organizations to manage physical and electronic files, their archive and retention schedules and audit their activity. Email management, which is a bit earlier in its life than RM, has many of the same requirements. Given the recent accounting related scandals and the subsequent Sarbanes-Oxley Act, Records and Email Management solutions are hotter than ever. Those two technologies need to blend together with the rest of the ECM offering to provide seamless records retention and management schedules across all content types.
 

Knowledge Management

There are a few ECM providers that do Knowledge Management (KM) today, but they all should. KM is an invaluable technology that really belongs in the ECM stack. KM tools allow you to do a couple of important things. First, they allow you to create very structured and all-encompassing taxonomies for organizing otherwise unstructured corporate information. Think of the Yahoo! directory structure with your corporate information at the end of the hierarchy.

The second major function of KM is the aggregation of the information presented in that structure. Again, think of Yahoo! and how it crawls external websites to create its directory. It builds its own massive database of information from places it either knows about or can figure out. Whereas a portal lets you view data from multiple places, KM tools actually grab the information and bring it to a central location. Think of it as a central repository where all corporate information ends up at some point in its life cycle. Once there, it is categorized and subject to all other ECM rules and capabilities. It is retained, archived, routed, actioned, audited, searched on and utilized. Oh, and it’s all automatic. OK, this isn’t meant to be an advertisement for KM, but I feel very strongly that KM tools are extremely complementary of the rest of the traditional ECM offering.
 

Expertise Management

There is a very interesting class of tools out there that have flourished under the radar screen of many organizations. These tools go by several names, including Expertise Location and Management (ELM), Expertise Management, and sometimes even Knowledge Management. It is a natural evolution to KM so sometimes the two terms are used interchangeably. For purposes of this article we will simply refer to it as Expertise Management or EM.

The goal of EM is to classify and quantify the expertise of knowledge workers. That’s right, actual people. Knowing who the experts are can be extremely useful when trying to access information of a very specific, sometimes complicated subject matter. Say for example, you need to create some sort of contract. You may start this process by looking for similar documents or other content within the ECM system. You may do a search for keywords or navigate the corporate taxonomy looking for something similar to what you need. But whether you find it or not, knowing who within the organization can best assist you is premium information.

In large organizations, knowing who knows is sometimes a skill in and of itself. Using EM tools, however, this is not an unknown. We know who the subject matter experts are and this information is readily available. How does it know who the experts are? Your previous contributions are calculated and quantified leading to judgments about what it believes you are an expert in. In addition, coworkers are able to submit rankings and metrics that assist in quantifying your individual skill with certain core subject matters. Based on all of this data, you may be ranked a four-star expert in one subject and five in another. In any case, this information helps peers locate those most able and available to assist with their task.

I believe we will see a major productivity increase when a knowledge worker has the ability to move in one motion from locating explicitly captured data and documentation directly to the tacit knowledge contained within the collective brainpower of the organization.
 

Collaboration

Prior to the recent wholesale convergence, there was a significant trend with respect to collaboration tools and their effects on ECM. It is a message that Open Text had pioneered many moons ago and remains the primary force in its marketing efforts. Others later followed their lead in the belief that collaboration is the backbone to successful ECM initiatives. The concept is compelling and so simple that it seems like it should be blatantly obvious. And yet, it’s a fundamental message that is lost on many organizations. The idea is that content and collaboration are symbiotic in nature. Content is generated as an offshoot of some collaborative process. Once the content is captured it can be easily re-purposed, leading to additional collaborative efforts.

The cycle’s basic premise is that more content leads to better collaboration, which leads to more content and corporate knowledge. A simple concept to be sure, and one that was not lost on the ECM vendors of a year or so ago. To fulfill this vision, Documentum snapped up eRoom, iManage was in the process of transforming their product set to one based entirely around collaboration when they were swallowed by Interwoven, Vignette grabbed Intraspect, Microsoft made a significant investment in Groove Networks, and of course, the Grandpappy of “collaborative content” Open Text continued to deliver.

Collaboration-related acquisitions actually were the talk of the ECM industry until six months or so ago. And, as pointed out, it made sense. The symbiotic relationship between collaborative efforts and the corporate knowledge that they foster is a bona fide, quantifiable money saver. I for one believe that if collaboration again becomes a key focus it will likely be the foundation from which all other ECM functionality gains value. It is a compelling message, it is easily understood as an efficiency enhancer, and it has real and proven benefits to an organization
.

Real Time Collaboration

Web Meetings

Traditionally, collaboration is thought of in a shared team room concept where documents, tasks, and other salient items can be aggregated and utilized at any time by the members of a team. As an obvious extension, online meetings a la WebEx and Microsoft LiveMeeting (formerly Placeware), provide additional avenues of collaboration and content sharing. Being able to extricate project content from the team room, mark it up during a real-time meeting then commit the changes and the entire meeting itself back to the official record further enhances the effort and fosters additional collaboration and content contributions. This appears to me to be a natural and obvious extension of traditional collaborative tools.

I suspect most vendors will opt to partner with the established service providers rather than write or acquire their own technology. Real-time meeting technology is much better as an outsourced, ASP-based solution than in an in-house solution offering. In addition, the subscription nature of the established pricing models could help ECM vendors generate an additional source of recurring revenue.
 

Instant Messaging

Instant Messaging (IM) is another shift in paradigm that many organizations are struggling with. IM in the corporate world has not really caught on in a huge way, which, by the way, completely baffles me. In any case, IMing really is just a much easier to perform and more dynamic email thread. However, IM presents an interesting paradox to many organizations. It is a quick and direct way of communicating with someone that doesn’t require any sort of storage and has no long-term archival needs. On the other hand, because IM is real time, it isn’t saved, tracked, audited, or stored for future posterity.

IM is very much like a digital version of a telephone conversation. Once it is over, it is subject to interpretation. But this isn’t entirely correct. After all, an instant message is a piece of data and can and some would say should be stored. Given Sarbanes-Oxley and other records and email management requirements, this is a logical next step for corporate instant messaging tools. An instant message conversation should be considered a type of content and should be subject to all the capabilities and requirements of any other piece of stored content.

I foresee two different ways ECM vendors might tackle this. First, you may see some attempt to integrate with standard tools like Yahoo, AIM, MSN, etc. However, these tools are mostly the domain of casual, dorm-room level, instant communications. They might not be ideally suited for building an inclusive corporate IM solution as described. A second approach might be one where a complete solution is built from the ground up using a forthcoming IM standard protocol. If technical issues are resolved and standards are developed, a whole new generation of tools could appear that corporations will rush to adopt.
 

Place-based Presence

An emerging capability that could be the “killer” application of IM for corporate users is the concept of “place-based presence”. Presence in this context refers to knowing who is online and available for discussion at any given point in time. Presence, as it is implemented today, however, is completely user-centric. That is, each person has their own, personal list of “buddies” from which presence is determined. In the corporate world, however, more often than not, you may not know who you want to talk to. You may want to speak to a team member, but you may not know all of the team. In addition, you may lead or participate in many teams. In the current, user-centric world, you would have to add EVERY buddy to your list before being able to determine presence and instantiate a conversation. This lack of context has obvious flaws in scenarios where you have large groups and/or there are unknown people you may wish to speak to. Place-based presence is the solution.

Place-based presence gives you the ability to view content in context while simultaneously viewing the presence of all of the contributors, team-members, or other appropriate knowledge workers. In this scenario, the context of the content dictates the buddy list and relevant subject matter experts are instantly available. Not coincidentally, this also ties in quite nicely with “Expertise Management,” which I described earlier.

It is my belief that the ECM space is the perfect early adopter and long term home for corporate Instant Messaging and other real-time collaboration tools.
 

And Finally…

Report Management (aka ERM and COLD) is a mature and important piece of today’s ECM picture. However, I believe it will undergo a subtle redefinition as crawlers mature, portals expand, and the capacity of storage devices increase. Don’t be surprised to see report management converge with crawlers and/or other integrated input technologies. Forms Management (FM), in my opinion, is a highly utilized stand-alone application that is likely to be consumed by the ECM stack. FM is a logical subset of traditional document management combined with BPM and it’s routing, tracking, and integration capabilities.
 

Who Can Get Us There?

All of this culminates in the million dollar question. My vision is obviously heavy on new collaboration and KM features. A few organizations with Open Text leading the way, have been articulating a similar message for a long time. However, vision and message don’t necessarily imply an ability to execute, superior technology, or happy customers. Those are the challenges that all of the ECM players face. I like Open Text’s vision; let’s see where it takes them. I like the outlook of Vignette, Stellent and Interwoven’s recent acquisitions and market positioning. FileNet is a steady performer and never count out the big guns like IBM and Microsoft. Mix in a couple of dark horses and a few we haven’t even heard of yet and you’ve set the stage for an extremely competitive market moving forward.

There is no limb walking here for obvious reasons. What I have discussed represents what I believe should be the strategy for a fifteen round heavyweight title fight. The recent convergence represents the weigh-in and the first round is just getting started. No doubt, much will happen over the course of the fight. Some will get knocked down and get back up again. Some will go down for the count. Some will do the kicking around, but may lose in a split decision. Anything can happen and that is what is so intriguing. Who will win, you ask? Well, obviously, it will be whoever actually does all of this stuff.

Note : This document is a high level overview of an extremely broad range of topics that I find interesting. I have spent a good deal of time and effort organizing my thoughts in a way that might interest others. The intellectual capital represented here is not trivial, but neither is it a wholistic and complete vision. I do have to keep some things close to the vest. Nevertheless, I do believe it is a great deal more information than you might typically get without entering into an official engagement with an analyst or consultant. As such, I would be very appeciative if you would respond with your thoughts on the subject matter. You can leave comments attached to the article itself, send me an email, or drop me a line. Anything will suffice so as long as I know that I have made you think. Even if what I made you think about is throwing something at me.

Rick Taylor

Good for everyone [ 45% ]
Good for Stellent, Bad for Optika [ 32.5% ]
Good for Optika, Bad for Stellent [ 5% ]
Bad for everyone [ 17.5% ]

Totally everything together, the numbers could also be looked at like this.

Good for Stellent – 77.5%
Bad for Stellent – 22.5%
Good for Optika – 50%
Bad for Optika – 50%

Obviously, most agree this a good deal for the Stellent community while it is evenly split for Optika. This is not atypical for this sort of deal. Stellent is getting a profitable organization with a product offering that will enhance their own. Optika, on the other hand, in their niche, was doing just fine on their own, thank you very much. At least, that is generally the consensus. I would argue, however, that moving forward, the niche players like Optika are ultimately going to be better as a piece of a larger solution than the entire solution in and of itself. Their ability to compete going forward would likely have been affected by the trend in the industry of single source solution providers.

Financially, investors obviously don’t much care for the deal. At least, not yet. Since the announcement, STEL is down 22% and OPTK is down 25%.

I will update this list as events dictate. Check back frequently.Note : Updated 1-22-2004