Analyst Underestimates Impact of Microsoft and Google in Enterprise Search
October 2, 2009
I have written a report for the Gilbane Group and think highly of the firm’s analysis. However, a recent news item forwarded to me by a reader of this Web log triggered some conversation in Harrod’s Creek today. The article was “Competition among Search Vendors,” and it was dated in early August 2009. The article included this assertion:
This additional news item indicates that Microsoft is still trying to get their search strategy straightened out with another new acquisition, Applied Discovery Selects Microsoft FAST for Advanced E-Discovery Document Search. E-discovery is a hot market in legal, life sciences and financial verticals but firms like ISYS, Recommind, Temis, and ZyLab are already doing well in that arena. It will take a lot of effort to displace those leaders, even if Microsoft is the contender. Enterprises are looking for point solutions to business problems, not just large vendors with a boatload of poorly differentiated products.
In the last three months, I have noticed an increase in the marketing activity from quite a few enterprise search and content processing vendors. One one hand, there are SharePoint surfers. These are vendors who don’t want to be an enterprise solution. The vendors are content to license their technology to some of the 100 million SharePoint licensees. Forget search. SharePoint is a market that can be harvested.
On the other hand, there are vendors in the process of changing their stripes, and not just once. Some companies have moved from intelligence applications to marketing to sentiment to call center applications. I have to tell you. I don’t know if some of these companies are even in the search business any more.
Looming over the entire sector are the shadows of Google and Microsoft. Each has a different strategy for sucking revenue blood from the other. Smaller vendors are going to need agility to avoid getting hurt when these two semi-clueless giants rampage across the enterprise to do battle to one another.
The notion that niches will support the more than 300 companies in the search and content processing market may be optimistic. I wanted to use a screen shot from the TV show Fantasy Island but I won’t. A number of search vendors are gasping for oxygen now. I am keen to keep a sunny outlook on life. But when it comes to search and content processing realism is useful. Just ask some of the musical chair executives making the rounds among the search and content processing companies.
What will Google and Microsoft do to get shelf space in the enterprise? What do big companies with deep pockets typically do? Smaller companies can’t stay in this winner take all game.
Stephen Arnold, October 2, 2009
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