Enterprise Search Silliness
October 23, 2011
I am back in Kentucky and working through quite a stack of articles which have been sent to me to review. I don’t want to get phone calls from Gen X and Gen Y CEOs, chipper attorneys, and annoyed vulture capitalists, so I won’t do the gory details thing.
I do want to present my view of the enterprise search market. I finished the manuscript for “The New Landscape of Search”, published in June 2011, before the notable acquisitions which have taken place in the discombobulated enterprise search market. Readers of this blog know that I am not too fond of the words “information,” “search”, “enterprise”, “governance”, and a dozen or so buzzwords that Art History majors from Smith have invented in the sales job.
In this write up I want to comment on three topics:
- What’s the reason for the buy outs?
- The chase for the silver bullet which will allow a vendor to close a deal, shooting the competitors dead
- The vapidity of the analyses of the search market.
Same rules apply. Put your comments in the comments section of the blog. Please, do not call and want to “convince” me that a particular firm has the “one, true way”. Also, do not send me email with a friendly salutation like “Hi, Steve.” I am not in a “hi, Steve” mood due to my lousy vision and 67 year old stamina. What little I have is not going to be applied to emails from people who want to give me a demo, a briefing, or some other Talmudic type of input. Not much magic in search.
What’s the Reason for the Buy Outs?
The reasons will vary by acquirer, but here’s my take on the deals we have been tracking and commenting upon to our paying clients. I had a former client want to talk with me about one of these deals. Surprise. I talk for money. Chalk that up to my age and the experience of the “something for nothing” mentality of search marketers.
The HP Autonomy deal was designed to snag a company with an alleged 20,000 licensees and close to $1.0 billion in revenue, and not PriceWaterhouseCooper or Deloitte type of consulting revenue stream. HP wants to become more of a services company, and Autonomy’s packagers presented a picture that whipped HP’s Board and management into a frenzy. With the deal, HP gets a shot at services revenue, but there will be a learning curve. I think Meg Whitman of eBay Skype fame will have her hands full with Autonomy’s senior management. My hunch is that Mike Lynch and Andrew Kantor could run HP better than Ms. Whitman, but that’s my opinion.
HP gets a shot at selling higher margin engineering and consulting services. A bonus is the upsell opportunity to Autonomy’s customer base. Is their overlap? Will HP muff the bunny? Will HP’s broader challenges kill this reasonably good opportunity? Those answers appear in my HP Autonomy briefing which, gentle reader, costs money. And Oracle bought Endeca as a “me too” play.
A good example of the buy out that slays the competitor is Thomson Reuters’ purchase in October 2011 of some of the intellectual property, people, and software from Infonics Lexalytics. Ah, unfamiliar with these outfits? No help from me in this post. The key point is that Lexalytics has some sentiment analysis technology which is strongly Microsoft centric. With the deal, Lexalytics can sell its “good, bad, hmmm” reports to marketing types. Thomson gets the technology for one of its high end financial information services.
Bottom line: This is a defensive deal. Thomson Reuters is in the kitchen, and the wood burning stove is raging. With Woodside keeping the door locked, Thomson Reuters has to find a way to protect revenue. This is the “taking technology off the table” which is designed to slow down or hobble competitors. Guess Thomson Reuters does not know that there are quite a few outfits with sentiment analysis systems which are arguably better with more modern methods?
The Hope for a Silver Bullet
Procurement teams and system professionals charged with licensing a new search system often go with what’s known, what’s cheap, and what will allegedly solve the major problems with search; for example, search, a complaining senior officer in the legal department, or marketing’s craving for snazzy reports and flashy charts.
Enter the silver bullet. The idea is that a search or content processing vendor slaps some new lingo on the same old key word and semantic tagging technology. Calling the system “semantic”, “predictive”, or “natural language” makes the old seem new again. When the silver bullet misfires, you can poke around and find five or more enterprise search systems in many large organizations. Heads roll. New initiatives are formed. New directions are tried. If there is innovation, it is often delegated to a recent college graduate who will try to make Lucene work.
Bottom line: Change comes slowly to the enterprise even when the economic seas are raging. There is talk of change, but not much real change except reducing costs and amassing cash.
Vapid Analyses
Librarians, failed Web masters, students of 19th century American “guy” poetry, and RIFfed journalists cranking out opinions about enterprise search—there are many views of what has happened to the enterprise search market.
Let me point out that with the failure of Convera and the buy outs of Autonomy, Endeca, Exalead, and Fast Search & Transfer, the 1995-1998 search technology vendors are now part of companies which will resell and probably marginalize some of the acquired technology. There is not enough money or interest in reworking systems and methods which are more than 10 or 15 years old. As a result, the big name enterprise search vendors are gone because it was time for founders to cash in. Train ride: over.
The other factor is that enterprise search has never worked particularly well for users, software vendors themselves, or the licensees’ chief financial officers. Who wants to write checks every couple of days to add hardware, buy engineering support, more storage, more servers, and additional functionality? The reason enterprise search systems from the recently acquired never worked particularly well has more to do with the nature of information and its daunting proliferation than the technology. Laundry lists are just not that useful, so users are unhappy. Gen Y professionals are into video and most search systems don’t do video very well. Exalead is the exception, I want to add. Most users of big name systems cannot locate specific documents without an Easter egg hunt. Latency, bad software, and indifferent document creators make this a persistent problem. In short, enterprise search gets at best an average grade. Who wants to keep putting lots of remedial work into a student who is a permanent “C student.”
Bottom line: Most analysts are describing search systems and have never coded or installed one. This is like asking a sports reporter at a big newspaper what it is like to wake up Monday morning after an NFL game. Better to ask a player, right? End of era. Done.
What’s Next?
The interesting question is, “Which five or six companies from the more than 100 which assert that their software can search, process, make accessible, and understand content” will be the winners and form the 2013 Top Five in search.
One big consulting firm veered into recipe book thinking. The company plucked a dozen companies from the pool of 100. My experience is that the “plucking” has more to do with selling consulting than elucidating a quite complex market.
We have completed a review of about 100 vendors of search and content processing technology. We have organized these firms into long shots, hanging in there, and making sales.
Based on our annual review of search and content processing companies, we believe that about 15 percent of the firms will go out of business before December 31, 2012. About half of the other firms will experience the type of strategic and management upheaval which we have documented in this blog. Examples range from Coveo to Lucid Imagination to Sinequa and beyond. The remainder will move up or down the league tables based not on technology but on cracking the code for making sales to financially sensitive, confused licensees in the government, commercial, and not for profit sectors. A few niche players will emerge; for example, a winner in the “will my email send me jail” niche of pre-discovery content analysis and “where the heck is that drawing of the battery connector” niche in manufacturing.
After 2012, we will update our “hot sector” chart. This is a diagram based on my method for determining which search positioning is most likely to catch an organization’s interest. We are watching several sectors closely, and, frankly, we think the outfits chasing crazy mathematical content methods for companies which sell sneakers is probably going to give the investors a head ache.
Wrap Up
Here are four observations:
First, search is not dead even though I wrote an essay saying, Search is dead maybe eight years ago. What’s happened is that search has done one of those amœba things and divided into different entities. Each entity becomes a different line of amoebae. Is predictive analytics search? Sure. Is sentiment analysis search? Sure. Will a hot marketing angle sell search? Sure. Will users be universally thrilled? Nope. Another set of “C” averages are coming.
Second, cost controls. Forget. Search and anything related to digital content has what I call “open ended costs.” Move search to the cloud. Same costs. Use open source software. Same costs. As content volume goes up, costs for any search, findability, or hot packaging of information retrieval goes up.
Third, consumerization and social methods. the reason these methods are popular is easy to express. It is easier to ask someone for information than search, browse, discover, or interpret jazzy charts to get it. The challenge of consumerization and social methods is that they reinforce the “C” average. Don’t believe me. Check out Democracy in America.
Fourth, innovation will continue because search, content processing, and the hot sectors like semantics run into the mercurial characteristics of language. Monitoring behaviors is a better solution, but researchers will keep chipping away at the problems of lots of text and big data. Maybe in 10 years, there will be something new in basic information access. Right now, the big new thing is a kindergartenesque approach on an iPad. What about the data beneath the cartoon interface? Data. What are they?
Stephen E Arnold, October 23, 2011
Sponsored by Pandia.com. If you want to know more about ArnoldIT.com “Search 2012 Briefing”, write seaky2000 at yahoo dot come.
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