BA-Insight Lands $6 Million

September 22, 2010

According to CMS Wire, a Microsoft partner—no, fix that—“a key Microsoft partner”—has received a cash injection of $6.0 million. You will get the content management write up in the story “BA-Insight Secures US$6M Funding for Enterprise Search”. The PR Newswire story “BA-Insight’s Strong Growth in Enterprise Search Space Secures $6 Million in Series A Funding” provides a bit more detail. Note: links to PR stories often go dead, so you may have to resort to some poking around via which usually indexes Microsoft centric stories reasonably well.

The news release said:

BA-Insight, Inc., an enterprise search software company specializing in Microsoft-based information access technology, announced today that it has secured $6 million in private equity funding led by New York-based Milestone Venture Partners. Paladin Capital Group and Osage Venture Partners also invested in the round. The New York State Common Retirement Fund participated in the financing through funds managed by Milestone Venture Partners and Paladin Capital Group.

What’s the money for? The release said:

BA-Insight will deploy the capital raised to further develop and extend its suite of enterprise search products for SharePoint Search, expand its marketing efforts and grow its sales and support services organizations. “The market for BA-Insight technologies is expanding rapidly,” explained Guy Mounier, CEO and co-founder of BA-Insight. “We have huge growth potential in U.S. government, professional services, energy and other sectors. This investment will allow us to build the organization needed to support our growth in those markets.”

BA-Insight is a vendor committed to the enterprise search market. This “sector” has been under significant pressure from lower cost Microsoft solutions such as dtSearch (Bethesda, Maryland) and open source solutions like Lucene/Solr. In fact, enterprise search is becoming commoditized.

What’s the BA-Insight difference? According to the news release:

BA-Insight’s flagship product Longitude optimizes Microsoft’s SharePoint Search, and FAST Search for SharePoint platforms. Users can find, analyze, and act on relevant information regardless of the format or where the data resides. Longitude offers out-of-the-box SharePoint Connectors to more than 20 business applications including ERP, CRM, Messaging, and ECM. Longitude also provides a state-of-the-art user experience via a rich Silverlight SharePoint document viewer.

My observations are:

  • The BA-Insight play is that Microsoft will continue to encourage its top paying certified partners an opportunity to sell into the SharePoint ecosystem. With more than 100 million SharePoint licenses in the wild, that’s a big ecosystem. The risk is that Microsoft could poach the juicy accounts. If BA-Insight gets traction, Microsoft might buy BA-Insight in order to fatten up its offerings. IBM has followed this strategy for several years. The key difference, in my opinion, is that IBM is using Lucene/Solr and buying value-adding technologies to boost the IBM services business. The Microsoft approach will have a unique fingerprint.
  • I think that BA-Insight is “glue play”. What I mean by “glue” is that Microsoft leaves it to licensees to hook together various components to solve a problem. BA-Insight and a handful of other Microsoft centric players provide a “snap in” solution to reduce the time, cost, and hassles of getting basic functions to work as required. Fast Search is a complex beastie, and BA-Insight’s approach is to deliver a solution without the Fast cartwheels that can lead to staff turnover.
  • The challenge in the market will be one of time. The recession is allegedly “over.” For organizations strapped for cash, economies will be of significant interest. In the “search and SharePoint” niche, there are quite a few competitors. These range from other Microsoft partners such as SurfRay and Fabasoft to integrators who can hook together existing pieces and parts. Companies in this consulting approach to the search business include New Idea Engineering, with whom I have worked in the past, and my son’s company, Adhere Solutions. Note: my son did not pay me to reference him. I think I bought lunch yesterday which is how the family thing works, right?
  • The shift in the enterprise market that I will talk about at the ISS conference in October 2010 is that “search” is not what most users require. The need is for low latency processing of mission critical data delivered in what I call a data fusion system. Few companies offer a “platform” that ingests and makes actionable a range of data. The key players in this space include 20 year veterans like i2 in Cambridge, England, Kroll (now a unit of Altegrity), the Palantir organization (now allegedly involved in a confusing legal matter), and the lesser known but up and coming Digital Reasoning, among others. The name “BA Insight” suggests a capability in the data fusion space, but the new release’s emphasis on “enterprise search” suggests that BA-Insight is anchored in the traditional search market. Perhaps this is just a positioning issue specifically for the news release?

The big challenge is use of the money. Increasing “marketing” sometimes works and sometimes does not. In the “search space”, there is a great deal of noise, smoke, and confusion. The strong interest in open source search so far has not spilled over into the SharePoint sector. I think that will happen. When it does, there will be some interest in Microsoft-centric shops. That interest will probably come from new hires and the chief financial officer’s staff. The traditional Microsoft certified professionals like their counterpart Oracle certified database professionals want to preserve the status quo.

The status quo is not such a comfortable place. Big outfits like Oracle are resorting to legal eagles to cope with open source. Microsoft has a mixed record with regard to open source. My hunch is that BA Insight will have to find a way to go viral within the SharePoint community. That will take keen mastery of social media, the sales ability of Autonomy, and the technical savvy of some serious wizards like Exalead, the repositioning touch of Vivisimo, and the market focus of Coveo. BA Insight has the opportunity to be the break out enterprise search vendor in 2010.

Will $6.0 million be enough? I don’t know the answer. The investors’ smart money thinks BA Insight has what it takes to succeed. From the grandstand in Harrod’s Creek, this race will be fun and entertaining to watch.

Stephen E Arnold, September 22, 2010



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