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nGenera Bakes in Autonomy Search

Just when Microsoft makes search “free”, along comes Autonomy and proves that licensing deals are alive and well. According to CRM Buyer, nGenera inked an original equipment manufacturing deal with Autonomy. What’s interesting is that it’s not “search”. The deal is for Web 2.0 technology for search. The application is not finding. The application is knowledge management. I have to be up front and admit that I don’t know what knowledge is. Absent that understanding, I’m baffled at how to manage what I don’t grasp. Nevertheless, the deal is done.

Let’s sort out who is who in this deal. Talisma, according to CRM Buyer, “OEM’ed the Autonomy search engine.” An Autonomy reseller told me that Autonomy’s search engine no longer needs training, and it now shares many features with “appliance like” search systems from Google and Thunderstone, among others. You can get more information about Talisma here. The Talisma catchphrase is “Software that enables an exceptional online customer experience.”

nGenera bought Talisma in May 2008. nGenera’s Steve Papermaster is reported as having said at the time of the deal:

The future of innovation is customer co-creation: talking directly to customers, listening to them, learning from them. We’re taking content and processes from customer interaction software and mashing that with Web 2.0 collaboration tools to help companies discover brilliant new product ideas inspired by their own customers. Source: Paul Greenberg.

nGenera now has its own customer support product line to complement its other management consulting type software offerings. nGenera is a cloud computing – Web 2.0 services firm. The company has a remarkable “manifesto” here that sets forth its vision for organizational operations. One idea in the manifest is that organizations must move from knowledge management” to what the company calls “content collaboration and collective intelligence”. Since I don’t know what “knowledge management” means, I am in the dark about information operations that reach beyond.  The manifesto also advocates moving from “traditional information technology” to “a next generation enterprise platform.”  Again my experience is not much help to me in figuring out what nGenera’s services will deliver. The company has its fingers in many different pies. Each pie is stuffed with Web 2.0 goodness and goodies like “leveraging institutional memory,” “mass collaboration”, “business analytics”, and “transformational change”. These notions are too sophisticated for this addled goose.

The Talisma Knowledgebase which may now incorporate Autonomy technology.

The purchase of Talisma adds what nGenera describes here as:

The leading Customer Interaction Management (CIM) software solution provider enabling organizations globally to deliver an exceptional online customer experience while dramatically increasing their efficiency and effectiveness.  Talisma’s customers include Aetna, AOL, Canon, Citibank, Comcast, Dell, Ford, University of Notre Dame, Microsoft, Pitney Bowes, Siemens, Sony, and Sprint.  Talisma is headquartered in Bellevue, Washington, and has offices located across Asia-Pacific, Europe, and North America.

To sum up, nGenera bought Talisma in May 2008. Talisma inked a deal for Autonomy’s search and content processing technology. Autonomy, therefore, “snaps in” to the broader range of nGenera’s Web 2.0 services. Autonomy joins Atlassian Confluence as a technology provider to nGenera.  I must admit these names leave my head spinning.

nGenera

So far, I haven’t been able to peg specific dollar amounts on:

• nGenera’s annual turnover is unknown, but the company has to generate a return on the $70 million in venture funding. This means the company has to have its sights set on becoming a $1 billion operation.
• Talisma’s final purchase price. Unknown but Talisma had indicted it was on track to become a $40 million operation
• The size of the Autonomy licensing deal. Unknown but Autonomy tries to assemble fees and services to edge into the $1 million range in the first year of the deal.
• The aggregate combined revenue for nGenera. I can’t even guess because the acquisitions’ revenues are tough to nail down from the sketchy information in my files.
• nGenera had in mid 2008 about 250 employees.

The bits and pieces I could locate in my archives included these items, which you must verify. I didn’t reach beyond my crawler’s store of content related news:

• nGenera was founded in 2007 by Steve Papermaster, who has been a manager at Powershift Ventures and Vignette, one of the most interesting companies I analyzed for several clients.
• He worked with the Bush White House and snagged an Ernst & Young Entrepreneur of the Year award
• Don Tapscott is a how profile consultant, and he is the chairman of the nGenera Innovation Network
• The company started as something called BSG Alliance
• In March 2007, BSG Alliance bought Kalivo, a company involved in collaboration systems
• In May  2007, the company raised about $20 million from Foundation Capital and Hummer Winblad Partners
• In May 2007, the company bought The Concourse Group, based in Houston. This outfit was in the training business
• In October 2007, BSG Alliance purchased Industrial Science, a company engaged in simulation software
• In December 2007, BSG Alliance bout New Paradigm, a company in human resources services and software
• In March 2008, BSG Alliance raised another $50 million in capital from Foundation and Hummer Winblad and a new investor, Oak Investment Partners.
• In March 2008, BSG Alliance bought Iconixx Corp., an executive compensation firm
• In April 2008, BSG Alliance renamed itself nGenera and started beating the Web 2.0 for the enterprise drum.
• The company’s PR firm is JB Labs, Inc.
• nGenera advertises for new hires on MySpace.com
• nGenera signs a a deal with Open Symmetry to push executive compensation solutions
• nGenera described itself as “the absolute coolest company in the world” on a Monster job posting

Talisma

Here’s what I had in my files about Talisma:

• Talisma was founded by Indian entrepreneur Pradeep Singh
• Talisma has a partnership with Denondo an outfit specializing in enterprise mashups
• Talisma as founded in 1999 and was unable to pull off an initial public offering
• Talisma, at the time of the sale to nGenera, had about 300 employees. The combined companies would have an estimated 550 employees.
• At the time of the sale, Talisma estimated 2008 revenues at $40 million. According to Business Standard (India), the combined nGenera and Talisma operations would result in a $100 million company. Source is here.
• Talisma CEO at the time of the sale was Dan Vetras
• Talisma is certified for Salesforce.com’s AppExchange and has integrated Talisma Chat and Email for Salesforce.com
• Talisma has make its Talisma Knowledgebase available on Salesforce.com. This is a customer support function. The search function in the Talisma Knowledgebase will take advantage of Autonomy’s technology
• Talisma has a tie up with ClickFox for analytics

What’s This Mean for Autonomy?

For me, Autonomy has been adept at hooking up with a company that has a different positioning from the run of the mill business service plays. If nGenera can grow, Autonomy will be pulled along, collecting fees and royalties from the nGenera operation.

Competitors continue to miss opportunities like this one. Autonomy gets praise for its technology, but I think Autonomy may be better at identifying opportunities and closing deals. The software is important, but today, sales may be even more important.

I anticipate a scramble among Autonomy’s competitors to find their own nGenera’s, but my hunch is that Autonomy is ahead of the pack.

If the nGenera deal flops, I don’t think it will have an impact on Autonomy. The company is diversifying, and so far in a lousy financial climate, Autonomy has been more than holding its own.

What really interests me is the nGenera roll up play. The company may be putting more pressure on traditional consulting firms. If it’s successful, nGenera could get a slice of revenues traditionally routed to outfits with legions of MBAs without much tech savvy.

Stephen Arnold, August 25, 2008

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