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Autonomy: Marketing Chess

The Microsoft – Fast deal may not have the impact of the Oracle – BEA Systems deal, but dollar for dollar, search marketers will be working overtime. The specter of what Microsoft might do begs for prompt, immediate action. The “good offense is the best defense” seems to be at work at Autonomy plc, arguably one of the world’s leading vendors of behind-the-firewall search and various applications that leverage Autonomy’s IDOL (integrated data operating layer) and its rocket-science mathematics.

The Microsoft – Fast Search & Transfer has flipped Autonomy’s ignition switch. On January 14, 2008, CBROnline reported that Autonomy’s Integrated Data Operating Layer gets a Power Pack for Microsoft Vista. IDOL can now natively process more than 1000 file formats. Autonomy also added support for additional third-party content feeds.

The goal of the enhancements is to make it easier for a Microsoft-centric organization to make use of the entity extraction, classification, categorization and conceptual search capabilities. Autonomy’s tailoring of IDOL to Microsoft Windows began more than a 18 months ago, possibly earlier. Microsoft SharePoint installations now have more than 65 million users. Despite some grousing about security and sluggish performance, Microsoft’s enterprise initiatives are generating revenue. The Dot Net framework keeps getting better. Companies that offer a “platform alternative” face a hard fact — Microsoft is a platform powered by a company with serious marketing and sales nitromenthane. No senior manger worth his salary and bonus can ignore a market of such magnitude. Now, with the acquisition of Fast Search & Transfer, Autonomy is faced with the potential threat of direct and indirect activity by Microsoft to prevent third-party vendors like Autonomy from capturing customers. Microsoft wants the revenue, and it wants to keep other vendors’ noses out of its customers’ tents.

Autonomy has never shown reluctance for innovative, aggressive, and opportunistic marketing (Remember the catchy “Portal in a Box” campaign?) It makes a great deal of business sense for Autonomy to inject steroids into its its Vista product. I expect Autonomy to continue to enhance its support for Microsoft environments on a continuous basis. To do less would boost Microsoft’s confidence in its ability to alter a market with an acquisition. I call this “money rattling.” The noise of the action scares off the opposition. 

Other search vendors will also keep a sharp eye on Microsoft and its SharePoint customers. Among the companies offering a snap-in search or content processing solution are Coveo, dtSearch, Exalead, and ISYS Search Software, among others. It’s difficult for me to predict with accuracy how these companies might respond to Autonomy’s sharp functional escalation of IDOL in articular and the Microsoft – Fast tie up in general. I think that Microsoft will want to keep third-party vendors out of the SharePoint search business. Microsoft wants a homogeneous software environment, and, of course, more revenue from its customers. Let my think out load, describing several hypothetical scenarios that Microsoft might explore:

1. Microsoft reduces the license fee for Fast Search & Transfer’s SharePoint adaptor and Fast Search’s ESP (enterprise search platform). With Fast Search’s pre-sell out license fees in the $200,000 range, a price shift would have significant impact upon Autonomy and other high-end search solutions. This is the price war option, and it could wreck havoc on the fragile finances of some behind-the-firewall search system vendors.
2. Microsoft leaves the list price of Fast Search unchanged but begins bundling ESP with other Microsoft applications. The cost for an enterprise search solution is rolled into a larger sale for Microsoft’s customer relationship management system or a shift from either IBM DB2 or Oracle’s database to enterprise SQL Server. Microsoft makes high-end search a functional component of a larger, enterprise-wide, higher value solution. This is the bundled feature option, and it makes a great deal of sense to a chief financial officer because one fee delivers the functionality without additive administrative and operational costs of another enterprise system.
3. Microsoft makes changes to its framework(s), requiring Microsoft Certified Partners to modify their systems to keep their certification. Increasing the speed of incremental changes could place a greater technical and support burden on some Certified Partners developing and marketing replacements for Microsoft search solutions for SharePoint.  I call this Microsoft’s fast-cycle technical whip saw option. Some vendors won’t be able to tolerate the work needed to keep their search application certified, stable, and in step with the framework.
4. Microsoft does nothing different, allowing Fast Search and its competitors to raise their stress levels and (maybe) make a misstep implementing an aggressive response to … maybe no substantive action by Microsoft. I think of this as the Zen of uncertainty option. Competitors don’t know what Microsoft will or will not do. Some competitors feel compelled to prepare for some Microsoft action. These companies burn resources in to get some type of insurance against an unknown future Microsoft action.

Microsoft’s actions with regard to Fast Search will, over time, have an impact on the vendors serving the SharePoint market. I don’t think that the Microsoft – Fast deal will make a substantive change in search and content processing. The reason is that most vendors are competing with substantially similar technologies. Most solutions are similar to one another. And, in my opinion, some of Fast Search’s technology is starting to become weighted down with its heterogeneous mix of original, open source, and acquired technology.

I believe that when a leap-frogging, game-changing technology becomes available, most vendors — including Autonomy, IBM, Microsoft, Oracle, and SAP, among others — will be blindsided. In today’s market, it’s received wisdom to make modest incremental changes and toot the marketing tuba. For the last five or six years, minor innovations have been positioned as revolutionary in behind-the-firewall search. I think that much of the innovation in search has been to  handles sales and marketing in a more professional way. The technology has been adequate in most cases. My work suggests that most users of today’s behind the firewall search systems are not happy with their information access tools — regardless of vendor. Furthermore, in terms of precision and recall, there’s not been much improvement in the last few years. Most systems deliver 75 to 80 percent precision and recall upon installation. After tuning, 85 percent scores are possible. Good but not a home run I assert.

I applaud Autonomy for enhancing IDOL for Vista. I will watch Microsoft to see if the company adopts one or more of my hypothetical options. I am also on the look out for a search break through. When that comes along, I  will be among the first to jettison the tools I now use for the next big thing. I wonder how many organizations will take a similar approach?  I want to be on the crest of the wave, not swamped by quotidian tweaks, unable to embrace the “search” future when it arrives.

Stephen Arnold, January 18, 2008

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