Search Industry Spot Changing: Risks and Rewards
September 20, 2010
I want to pick up a theme that has not been discussed from our angle in Harrod’s Creek. Marketers can change the language in news releases, on company blogs, and in PowerPoint pitches with a few keystrokes. For many companies, this is the preferred way to shift from one-size-fits-all search solutions described as a platform or framework into a product vendor. I don’t want to identify any specific companies, but you will be able to recognize them as these firms load up on Google AdWords, do pay-to-play presentations at traditional conferences, and output information about the new products. To see how this works, just turn off Google Instant and run the query “enterprise search”, “customer support”, or “business intelligence.” You can get some interesting clues from this exercise.
Source: http://jason-thomas.tumblr.com/
Enterprise search, as a discipline, is now undergoing the type of transformation that hit suppliers to the US auto industry last year. There is consolidation, outright failure , and downsizing for survival. The auto industry needs suppliers to make cars. But when people don’t buy the US auto makers products, dominoes fall over.
What are the options available to a company with a brand based on the notion of “enterprise search” and wild generalizations such as “all your information at your fingertips”? As it turns out, the options are essentially those of the auto suppliers to the US auto industry:
- The company can close its doors. A good example is Convera.
- The search vendor can sell out, ideally at a very high price. A good example is Fast Search & Transfer SA.
- The search vendor can focus on a specific solution; for example, indexing FAQs and other information for customer support. A good example is Open Text.
- The vendor can dissolve back into an organization and emerge with a new spin on the technology. An example is Google and its Google Search Appliance.
- The search vendor can just go quiet and chase work as a certified integrator to a giant outfit like Microsoft. Good examples are the firms who make “snap ins” for Microsoft SharePoint.
- The search vendor can grab a market’s catchphrase like “business intelligence” and say me too. The search vendor can morph into open source and go for a giant infusion of venture funding. An example is Palantir.
Now there is nothing wrong with any of these approaches. I have worked on some projects and used many of the tactics identified above as rivets in an analysis.
What I learned is that saying enterprise search technology is now a solution has an upside and downside. I want to capture my thoughts about each before they slip away from me. My motivation is the acceleration in repositioning that I have noticed in the last two weeks. Search vendors are kicking into overdrive with some interesting moves, which we will document here. We are thinking about creating a separate news service to deal with some of the non-search aspects of what we think is a key point in the evolution of search, content processing and information retrieval.
The Upside of Repositioning One-Size-Fits-All-Search
Let me run down the facets of this view point.
First, repositioning—as I said above—is easy. No major changes have to be made except for the MBA-style and Madison Avenue type explanation of what the company is doing. I see more and more focused messages. A vendor explains that a solution can deliver an on point solution to a big problem. A good example are the search vendors who are processing blogs and other social content for “meaning” that illuminates how a product or service is perceived. This is existing technology trimmed and focused on a specific body of content, specific outputs from specific inputs, and reports that a non-specialist can understand. No big surprise that search vendors are in the repositioning game as they try to pick up the scent of revenues like my neighbor’s hunting dog.
Second, the new spin on search is usually a subset of features. For years, enterprise search vendors added functions and services. Not surprisingly, the performance of search systems implementing the sophisticated add ons became a problem. Those with deep pockets could address the performance challenge, but other licensees just lived with lousy response time, stale content, and users’ grousing. The new packaging of search to solve a specific business problem brings (in theory) a leaner, more agile system. Even better, performance becomes less problematic because a specific problem may need a specific body of content, not the “all information” albatross.
Third, development costs may be more easily controlled. When an enterprise search system does everything like the ShamWow absorbent cloth, the resources needed to make the components work as advertised are substantial. Narrowing the product allows development to be more tightly defined. For search vendors struggling to cope with the brutal costs of information retrieval engineering, the laser dot approach brings a sigh of relief from the chief financial officer. Some engineers may be annoyed that the good old days have gone, however.
Fourth, customer support (in theory) can be narrowed. With old fashioned, one-size-fits-all search systems, the problems ranged from lost indexes to weird behavior caused by dependencies no one knew existed. If a system is indexing email to look for people who talk about a particular topic, the task is not trivial, but it is manageable. As a result, the problems the licensee has with the system (in theory) may be easier to troubleshoot. There is one content type. There is a specific function the client desires. There is a particular outcome the licensee expects.
In short, the repositioning of one-size-fits-all search has solid arguments in its favor. The present economic climate makes the cost argument quite compelling, but the notion that a search vendor can talk about a specific problem and its solution makes sense to most people.
The Downside of Repositioning
When a vendor changes its spots or repositions to a solution, there are some hurdles that must be cleared. Let’s look at my short list of issues related to the downside.
First, delivering a solution that works to solve a specific problem is no slam dunk. Look at the iPhone/iTouch/iPad App Store. There are a couple of hundred thousand applications and only a few of them make it to the list of Top Apps. As solutions proliferate, it is important to deliver a solution that makes a client happy and triggers an interest among other companies for that solution. The combination of the product’s working and its generating magnetism is not something that follows a recipe. In fact, a product that works and is not exciting may not generate sufficient revenue for the vendor to stay in business. A product that does not work and triggers posts on Facebook or Twitter may undermine the vendor’s sales efforts and its good will.
Second, a narrow product means that the customer can measure or at least figure out if the solution is delivering value. In one-size-fits-all search solutions in the past, the licensee often had no way of knowing if the solution did what users needed. When a solution focuses on eDiscovery or customer satisfaction expressed in blog posts, the licensee can get a grip on what a system delivers. Even the costs can be captured and applied to a department or a specific situation. As a result, narrowing the focus brings search and content processing accountability.
Third, the search vendor has to deliver customer support that solves the licensee’s specific problem. When the one-size-fits-all solution crashes, the complexity of the system blunts the need for getting the system up and running quickly. When the system does the email processing and it crashes, the search vendor has to have a way to deliver a fix. The benefits of focus and narrowed content creates the expectation on the part of the licensee that the system can be fixed. It is a product or a productized service. A car breaks down. The car goes to the dealer and gets fixed. If the repair takes more than a day, the car owner is an unhappy camper. Search vendors have to create a customer support culture that delivers fixes in a timely manner.
Fourth, a search vendor who announces “We are a business intelligence solution” now faces some different competitors. In search and content processing, the competitors are a handful of giants and lots and lots of small companies that most people in big companies have never heard of. When a vendor wraps itself in business intelligence, for example, suddenly the competition is IBM, Oracle, Microstrategy, SAP Business Objects, and the blue chip consulting firms such as Cap Gemini. The problem is one that the search vendor has to know how to resolve. Showing up at a major bank and pitching business intelligence to the business development department is not likely to generate a sale. Why spend money on an unknown vendor or a newcomer when the incumbents provide similar functionality as part of the existing deal?
Fifth, the search vendor changing its spots has to adapt to long lead times. In the US government, for example, the new fiscal year begins in October. Making a sale, therefore, is not going to be speedy because budgets are committed. In large organizatio0ns, the uncertainty within those organizations is at a high level, based on my work since January 2010. No one wants to make a big decision without getting consensus. When a decision is made, the big companies don’t want to spend any more than necessary. As a result, vendors changing spots have to have sufficient cash reserves to work the sales process and then deal with the time drains of negotiations and contracting.
Observations
The next six to nine months will be interesting for vendors in the search and content processing market. I think that by the end of 2011, the familiar landscape will have been reshaped. The spot changing will be just one bulldozer shoving away at the landscape. Other factors are:
- Open source search and open source business intelligence options. Yep, open source may be killed by Oracle and its kin, but in the meantime, the notion of getting a free search system seems to be part of the flora and fauna in organizations in my opinion
- Lack of resources. Most organizations are struggling to cope with the demands of their technology. Problems with knowing how to fix something or enhance a product can be discerned in giants like Apple, Microsoft, and Oracle. The reality is that in many vendors and their clients, the expertise needed to make something work is simply not there. I have no idea how those in need of specific technical expertise can fill knowledge gaps quickly and economically.
- Start ups. For whatever reason, vendors who were nurtured by intelligence and military entities are now entering the commercial market. These companies are largely unknown by most of the vendors in the traditional search and content processing space. What’s interesting is that some of these vendors have systems that do solve specific problems. Suddenly new players are popping into view who can cherry pick from spot changers and giants like IBM.
- Cloud solutions. Search has been on on premises solutions for many organizations. In the next year, I think that viable cloud based search and content processing solutions will be available as a punch item on a checklist. You can see this model at work in the Blossom.com approach to search.
I predicted that enterprise search was dead years ago. Barbara Quint, editor of searcher, reminded me of that essay when we spoke a week or so ago. Looks like the end has arrived. Spot changing is part of the new beginning. The azurini will document the change. Gives them something to do I suppose.
Stephen E Arnold, September 20, 2010
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