Forrester Fills the Gap in Search Market Size Estimates

January 25, 2013

I used to enjoy the search market size estimates of IDC (the time it takes to find info group), Gartner (the magic quad folks), Forrester (yep, the “wave” people), and Ovum (we do it all experts), among others.

I read “Growth of Big Data in Businesses Intensifies Global Demand for Enterprise Search Solutions, Finds Frost & Sullivan” and found several items of interest in the brief news story which arrived via Germany. Is Germany a leader in enterprise search? I heard that 99 percent of Germany’s search means Google. The numerous open source players are not setting the non-German world on fire, but I could be wrong. Check out GoPubMed, for example, of an interesting system which has a modest profile.

Now to the size of the search market.

The first thing I noticed was the nod to Big Data, which is certainly the hook on which many dreams for Big Money hang. With enterprise search vendors looking for a way to gain traction in a market which has been caught in awkward positions when licensing and deploying “search,” new words and new Velcro patches are needed. I won’t mention the Hewlett Packard Autonomy matter nor the Fast Search & Transfer matter nor the millions pumped into traditional search vendors with little chance of paying back the investments. No. No. No.

I want to quote this statement from :

The growth of Big Data across verticals presents the enterprise search solutions market with further opportunities. Since newer data types are not confined to a relational database within an organization, solutions that can search information outside the scope of these relational frameworks are widely accepted. Demand for personalized search tools that operate in a pool of unlimited data from internal servers, the Internet, or third-party sources is also growing.

Ah, but how does one crawfish away from exaggeration? Easy. I noted:

However, the disparity between customer expectations and actual search outcomes could dissuade future investments. Customers expect a single query to retrieve the right results immediately. Therefore, search providers must offer timely and relevant results, taking into account the continuous addition of new data to repositories.

But “How big is the market? my inner child yelps. The answer:

Global Enterprise Search Market, finds that the market earned revenues of over $1.47 billion in 2012 and estimates this to reach $4.68 billion in 2019.

Now I know. $1.5 billion. When I cranked out my last enterprise search market, I arrived at figure based on my mindless collection of information from about 125 vendors of enterprise search.

What I found when my team showed me the data from my files and the others sources to which we had access, we found in the period 2007 to 2008, the following:

  1. Autonomy, Endeca, and Fast Search (assuming the numbers we used were accurate, which is a matter for discussion), was that these three companies reported gross revenues of $880 million. Autonomy was the Big Dog of the three.
  2. The other 122 companies in the set accounted for about $350 million.
  3. When one counted the losses in that time period from Convera and Delphes, the total shrank even more.
  4. When we used our model to estimate search revenues at Google, IBM, Oracle, and SAP we could fiddle the assumptions to make search as much as 2X larger.

What’s this mean in 2012?

First, no one knows how much revenue is attributable to search? The money vendors report comes from services, acquisitions, and hybrid deals which bundle hardware, software, maintenance, license fees, and training into one big blog.

Second, search vendors have found themselves saddled with suspicion. Many systems do not meet users’ needs and produce considerable dissatisfaction. Our research suggests that discontent with enterprise search systems is stuck at about 60 percent. The enterpriser search sector is decades old and more than half of the users of enterprise systems are unhappy. No wonder Google offers a search box and calls it a day.

Third, the firms funding enterprise search companies have been pulling money or just turning off the lights. What happened to Entopia? What happened to Siderean? What happened to Convera? What happened to STAIRS III?  What happened to Inference? You get the idea. The investors put in the dough and the search vendors spend it. The problem is that making money from search is tough. Google has figured out the magic. Sell ads and give away search.

Fourth, the spin that enterprise search vendors have put on their companies in the last three years include these “next big things”:

  • Analytics and business intelligence
  • Customer support and customer relationship management
  • Collaboration
  • Content management access
  • eDiscovery
  • Federated search
  • Intelligence support
  • Search based applications

What do these buzz words mean? That’s what azure chip consultants are for? They answer that question. When their answers don’t sell consulting, another buzz word is slapped on search. Works like a champ in a good economy. In a lousy economy, some azure chip search experts along with some search vendors are thrashing.

Who slaps the labels first? The azure chip crowd or the vendors? I think this is a chicken or egg type question.

Most vendors have slapped new labels on themselves in an effort to generate meaningful revenue and stay in business long enough to sell the company. By golly, the last three years were the golden era of selling what can be downloaded for free from Apache. Autonomy sold to Hewlett Packard. Brainware sold to Lexmark. Endeca sold to Oracle. Exalead sold to Dassault. Fast Search sold to Microsoft. Inquira sold to Oracle. ISYS Search sold to Lexmark. That’s enough. If search is the next big thing, where are the companies filling these search gaps? What company is generating Autonomy, Endeca, and Fast Search scale 2007 revenues? Answer: There isn’t one. Instead we get lots of start ups. Check out Searchdaimon?

What the enterprise search market estimate of $1.47 billion does is misrepresent the financial situation in the search, content processing, and “findability” market sector. One can make the number as big or as small as one wants. If the investment dollars sunk into search are counted, the enterprise search market revenue might be a negative.

Do I have a current estimate of the size of the enterprise search market? Nope. Will I produce one? Sure, if someone pays me to dig out my models and plug in my current data. Should you use the azure chip consultant estimate to guide your decision about investing and licensing an enterprise search system? Well, that gentle reader, is up to you.

My position on the matter is that the enterprise search market will continue on the same dusty trail it has followed for decades. Procurement teams have to find a reason to meet. Resellers have to have something to pitch. Lawyers have to use software to do the work of the nearly extinct junior attorney. Big enterprise software vendors will buy promising search vendors in order to get customers or people, maybe both.

I will remain in Harrod’s Creek, Kentucky. I will amuse myself with the outputs of the azure chip consultants. Life is good and the azure chip crowd hires failed webmasters, former middle school teachers, unemployed journalists, and MBAs with no future in investment banking. This approach to enterprise search is a veritable information machine.

Stephen E Arnold, January 25, 2013


One Response to “Forrester Fills the Gap in Search Market Size Estimates”

  1. PR in the Digital Arenas : Stephen E. Arnold @ Beyond Search on January 27th, 2013 12:05 am

    […] slightly more than the revenues for the enterprise search market which I wrote about here. The top 10 firms generated $1,120,706,215 or 63 percent of the total revenue in the O’Dwyer […]

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