Will Unbundling Work for Enterprise Search

September 23, 2013

I read “Unbundling: AOL, Facebook and LinkedIn” and reviewed the nifty diagram about Craigslist. I ignored the comments about Mr. Newmark, who stood next to me at a Google event, a while back. I am not sure he knows me as anyone other than a person as eager to leave as a couple of other “guests” at the function in Washington, DC. Young people make me nervous, and I wanted to take my Geritol and watch reruns of “I Love Lucy.”

Based on my understanding of Craigslist, I am not sure if the fancy diagram represents unbundling of Mr. Newmark’s idea or just a natural evolution of online opportunities crated by the consumerization of surfing. Craigslist went live in 1995, two years after the Point service, which Chris Kitze and I started with a couple of other clueless but intrepid Internet chance takers.

That makes Craigslist more than a decade old. The service has not changed too much in my opinion. The disruption of various sectors and the growth of the various topics or categories has been a consequence of user behavior, not part of a predestined grand plan. At Point we had zero idea that a large firm would want to buy our service. We were just trying to cope with traffic growth, technical issues, and advertisers who were contacting us.

Nevertheless, the Unbundling article suggests that innovation occurs because big outfits do not seize the many opportunities which their successful services offer up. Here’s the passage I noted:

There are a swarm of services, often mobile first or mobile only, trying to peel off parts of the Craigslist offer, or do things Craigslist should have been doing. AirBnB is only the most obvious. Chris Dixon has a good note about this here, and Andrew Parker produced this great graphic back in 2010.

I understand the viewpoint. However, I think there are a number of factors operating to make it possible to show, as the graphic in the article does, that Craigslist has been a gold mine of ideas.

First, many of the services which take a component of a successful service and elaborate it require bandwidth. A big outfit like AOL, Facebook, or Google for that matter has bandwidth which may be cluttered with noise. The problem becomes “Which opportunity?” which can produce some wild and crazy decisions.

A second factor is personal motivation and capability. The economy motivates some people to look around for ways to make money. Examples which come to mind is the shared ride service disrupting traditional taxi services in some cities. When people need to make money and have a car, an opportunity is perceived. Using an online existing service to build a ride share service is indeed possible. Some innovators may have time and resources to create a purpose-built system free of big company baggage.

Third, customers may be skeptical of new services from big outfits. I have been reading allegations about misbehavior at LinkedIn. I posted a test write up to see what would happen. Do I use LinkedIn for “real” work? Nope. Will I in the near future? Nope. I want to determine for myself if I can “trust” a big outfit. So, a new company offering a specialized service like those on the Unbundling graphic will get a more positive reception than another service from a giant online outfit. I may be in the minority with this approach, but it works for me.

My broad interest in online information access. One of my particular interests in enterprise search. Will the big enterprise search systems be dis-aggregated or “atomized” as the Unbundling article suggests?

This is an interesting question. Enterprise search is not a consumer service. The giant “one size fits all” solutions have been acquired by even larger enterprise solutions providers. Other large scale enterprise search solutions have just gone out of business like Convera, Delphes, Entopia, Siderean Software, and others. Enterprise search has spawned a free and open source solution set as well.

The present enterprise search market is characterized by a frenzy of consolidation, repositioning, and buzzwords. I track the sector on a daily basis, and I am not sure from point to point what strategies and tactics are actually working.

In terms of dis-aggregation, enterprise search has been supporting big solutions like those offered by Dassault (aerospace services!) and Hewlett Packard (yep the PC maker) to specialized solutions offered by Lexmark (printers!) and Xerox (yep, the copier folks).

There are dozens of specialists offering very specific search-related subcomponents which are like a clutch plate on a Lamborghini Urraco. The cost and availability are likely to wreck havoc for the novice’s budget. Some of the vendors of these highly specialized components (Marklogic’s XML technology or Sail Labs’ natural language processing technology) struggle to connect a problem with a solution that makes sense to potential customers. XML fuzzes into databases and databases mean Oracle or Hadoop. NLP blurs into search and search becomes Google. In short, life can be difficult for a provider of an atomized component.

I would assert the following:

  1. Enterprise search is neither a giant aggregated solution with a couple of big providers nor a sector characterized by on-going disaggregation. Enterprise search is more like one of those weird compounds like ketchup. Sometimes ketchup works like a homogeneous semi-solid. Other times, ketchup is a runny mess. In short, enterprise search is a polystate market. (Technically ketchup is a non-Newtonian fluid.)
  2. Vendors are never certain what problem their software solves. Take the examples of XML or NLP. What specific value can be delivered to a company looking to cope with Big Data? I am confident that each of the vendors in these two niches can provide me with a webinar that explains the value of their product. But the problem is, “Can an organization get enough value to buy the company’s solution?” And, a more important question, “Are their enough customers to make one or two of these companies generate $200 million or more in profitable revenue today?”
  3. Customers often do not know what problem they have to solve. Unlike a person who wants a cheap ride to Palo Alto, an organization’s problems are difficult to pin down. More sales means what? Enterprise search vendors talk about customer support and extracting value from information assets. The decision makers at different levels of an organization cannot explain “more sales” one way. Not surprisingly, enterprise search vendors marketing seem to fix a remarkably wide range of problems. Do these systems deliver “more sales”? Usually not in a direct way. Search engine optimization, on the other hand, does deliver measurable results. Maybe SEO will just “take over” enterpriser search at some point.

Let’s assume my assertions are partially correct. Enterprise search is a market space which may be more difficult to crack than seeking inspiration from Craigslist. Perhaps this is one reason why enterprise search has in fifty years produced only one firm which generated more than $800 million in revenues from search technology. Google, please, keep in mind, is in the advertising business. Search is plumbing which helps the company make money.

Conflating findability with the ketchup of enterprise search and its subcomponents delivers one big disconnect in my opinion. Vendors are finding it more and more difficult to demonstrate value delivered by search solutions. Making money with enterprise search is not impossible. I just think it is difficult and getting harder.

Getting inspiration from AOL, Facebook, or whatever big online service one picks may be an easier way to make a buck.

Stephen E Arnold, September 23, 2013

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