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Another Categorical Affirmative: Nobody Wants to Invest in Search

Gentle readers, I read “Autonomy Poisoned the Well for Businesses Seeking VC Cash.” Keep in mind that I am capturing information which appeared in a UK publication. I find this type of essay interesting and entertaining. Will you? Beats me. One thing is certain. This topic will not be fodder for the LinkedIn discussion groups, the marketers hawking search and retrieval at conferences to several dozen fellow travelers, or in consultant reports promoting the almost unknown laborers in the information access vineyards.

Why not?

The problem with search reaches back a few years, but I will add a bit of historical commentary after I highlight what strikes me as the main point of the write up:

Nobody wants to invest in enterprise search, says startup head. Patrick White, Synata

Many enterprise search systems are a bit like the USS United States, once the slickest ocean liner in the world. The ship looks like a ship, but the effort involved in making it seaworthy is going to be project with a hefty price tag. Implementing enterprise search solutions are similar to this type of ocean-going effort.

There you go. “Nobody.” A categorical in the “category” of logic like “All men are mortal.” Remarkable because outfits like Attivio, Coveo, and Digital Reasoning, among others have received hefty injections of venture capital in recent memory.

The write up makes this interesting point:

“I think Autonomy really messed up [the space]”, and when investors hear ‘enterprise search for the cloud’ it “scares the crap out of them”, he added. “Autonomy has poisoned the well for search companies.” However, White added that Autonomy was just the most high profile example of cases that have scared off investors. “It is unfair just to blame Autonomy. Most VCs have at least one enterprise search in their portfolio. So VCs tend to be skittish about it,” he [added.

I am not sure I agree. Before there was Autonomy, there was Fulcrum Technologies. The company’s marketing literature is a fresh today as it was in the 1990s. The company was up, down, bought, and merged. The story of Fulcrum, at least up to 2009 or so is available at this link.

The hot and cold nature of search and content processing may be traced through the adventures of Convera (formerly Excalibur Technologies) and its relationships with Intel and the NBA, Delphes (a Canadian flame out), Entopia (a we can do it all), and, of course, Fast Search & Transfer.

Now Fast Search, like most old school search technology, is very much with us. For a dose of excitement one can have Search Technologies (founded by some Convera wizards) implement Fast Search (now owned by Microsoft).

Where Are the Former Big Six in Enterprise Search Vendors: 2004 and 2015

Autonomy, now owned by HP and mired in litigation over allegations of financial fraud

Convera, after struggles with Intel and NBA engagements, portions of the company were sold off. Essentially out of business. Alums are consultants.

Endeca, owned by Oracle and sold as an eCommerce and business intelligence service. Oracle gives away its own enterprise search system.

Exalead, owned by Dassault Systèmes and now marketed as a product component system. No visibility in the US.

Fast Search, owned by Microsoft and still available as a utility for SharePoint. The technology dates from the late 1990s. Brand is essentially low profiled at this time.

Verity, Autonomy purchased Verity and used its customer list for upsales and used the K2 technology as part of the sprawling IDOL suite.

Fast Search reported revenues which after an investigation and court procedure were found to be a bit enthusiastic. The founder of Fast Search was the subject of the Norwegian authorities’ attention. You can check out the news reports about the prohibition on work and the sentence handed down for the issues the authorities concluded warranted a slap on the wrist and a tap on the head.

The story of enterprise search has been efforts—sometimes Herculean—to sell information access companies. When a company sells like Vivisimo for about one year’s revenues or an estimated $20 million, there is a sense of getting that mythic task accomplished. IBM, like most of the other acquirers of search technology, try valiantly to convert a utility into something with revenue lift. As I watch the evolution of the lucky exits, my overall impression is that the purchasers realize that search is a utility function. Search can generate consulting and engineering fees, but the customers want more.

That realization leads to the wild and crazy hyper marketing for products like Hewlett Packard’s cloud version of Autonomy’s IDOL and DRE technology or IBM’s embrace of open source search and the wisdom of wrapping that core with functions.

Enterprise search, therefore, is alive and well within applications or solutions that are more directly related to something that speaks to senior managers; namely, making sales and reducing costs.

What’s the cost of making sure the controls for an enterprise search system are working and doing the job the licensee wants done?

The problem is the credit card debt load which Googlers explained quite clearly. Technology outfits, particularly information access players, need more money than it is possible for most firms to generate. This contributes to the crazy flips from search to police analysis, from looking up an entry in a data base to an assertion that customer support is enabled, hunting for an article in this blog is now real time, active business intelligence, or indexing by proper noun like White House morphs into natural language understanding of unstructured text.

Investments are flowing to firms which could be easily positioned as old school search and retrieval operations. Consider Lexmark, a former unit of IBM, and an employer of note not far from my pond filled with mine run off in Kentucky. The company, like Hewlett Packard, wants to find a way to replace its traditional business which was not working as planned as a unit of IBM. Lexmark bought Brainware, a company with patents on trigram methods and a good business for processing content related to legal matters. Lexmark is doing its best to make that into a Trump scale back office content processing business. Lexmark then bought a technology dating from the 1980s (ISYS Search Software once officed in Crow’s Nest I believe) and has made search a cornerstone of the Lexmark next generation health care money spinning machine. Oracle has a number of search properties. Most of these are unknown to Oracle DBAs; for example, Artificial Linguistics, TripleHop, InQuira’s shotgun NLP technology, etc. The point is that the “brands” have not had enough magnetism to pull revenues on a stand alone basis.

Successes measured in investment dollars is not revenue. Palantir is, in effect, a search and retrieval outfit packaged as a super stealthy smart intelligence system. Recorded Future, funded by Google and In-Q-Tel, is doing a bang up job with specialized content processing. There are, remember, search and retrieval companies.

The money in search appears to be made in these plays:

• The Fast Search model. Short cuts until an investigator puts a stop to the activities.
• Creating a company and then selling it to a larger firm with a firm conviction that it can turn search into a big time money machine
• Buying a search vendor to get its customers and opportunities to sell other enterprise software to those customers
• Creating a super technology play and going after venture funding until a convenient time arrives to cash out
• Pursue a dream for intelligent software and survive on research grants.

This list does not exhaust what is possible. There are me-too plays. There are mobile niche plays. There are apps which are thinly disguised selective dissemination of information services.

The point is that Autonomy is a member of the search and retrieval club. The company’s revenues came from two principal sources:

1. Autonomy bought companies like Verity and video indexing and management vendor Virage and then sold other products to these firm’s clients and incorporated some of the acquired technology into products and services which allowed Autonomy to enter a new market. Remember Autonomy and enhanced video ads?
2. Autonomy managed well. If one takes the time to speak with former Autonomy sales professionals, the message is that life was demanding. Sales professionals including partners had to produce revenue or some face time with the delightful Dr. Michael Lynch or other senior Autonomy executives was arranged.

That’s it. Upselling and intense management for revenues. Hewlett Packard was surprised at the simplicity of the Autonomy model and apparently uncomfortable with the management policies and procedures that Autonomy had been using in highly visible activities for more than a decade as a publicly traded company.

Perhaps some sources of funding will disagree with my view of Autonomy. That is definitely okay. I am retired. My house is paid for. I have no charming children in a private school or university.

The focus should be on what the method for generating revenue is. The technology is of secondary importance. When IBM uses “good enough” open source search, there is a message there, gentle reader. Why reinvent the wheel?

The trick is to ask the right questions. If one does not ask the right questions, the person doing the querying is likely to draw incorrect conclusions and make mistakes. Where does the responsibility rest? When one makes a bad decision?

The other point of interest should be making sales. Stated in different terms, the key question for a search vendor, regardless of camouflage, what problem are you solving? Then ask, “Will people pay money for this solution?”

If the search vendor cannot or will not answer these questions and provide data to be verified, the questioner runs the risk of taking the USS United States for a cruise as soon as you have refurbed the ship, made it seaworthy, and hired a crew.

The enterprise search sector is guilty of making a utility function appear to be a solution to business uncertainty. Why? To make sales. Caveat emptor.

Stephen E Arnold, October 8, 2015

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