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Latest Datamonitor Report Expects Consolidation and Convergence to Reshape ECM Market
A new report by Datamonitor expects vendor consolidation and technology convergence to whittle down the enterprise content management software market to a handful of key players.
According to Datamonitor's "Selecting an Enterprise Content Management Vendor" report, the spate of recent consolidation is a sure sign that the ECM market is maturing and its growth weakening.
The report says that a mixture of merger and acquisition activity and convergence with other enterprise software markets, notably business intelligence, will reshape the market - more so as the larger vendors start to acquire vendors from both camps.
"ECM will become progressively more blurred as enterprise application vendors attempt to compete in new markets," the report said.
The report pointed to three major deals that promise to shake up the market over the next few years - Oracle's acquisition of Stellent, IBM's purchase of FileNet and Open Text's merger with Hummingbird.
"Consolidation will become more and more important, as well as potentially a tactic for larger vendors with deep pockets," it said.
Datamonitor puts IBM and Open Text in the "shortlist" category of vendors with the most complete technology stack and vision -- meaning that they should be the first vendors to make the cut in a preliminary evaluation of market offerings.
Another short-listed vendor is EMC, which also bought its way into the ECM market through its acquisition of Documentum back in 2003. The report pegs EMC as a leader in 'market impact" and "user sentiment."
The report sees Open Text as having a very strong vertical focus, courtesy of Hummingbird.
Meanwhile IBM gains the best user sentiment rating coupled with a "very strong technology platform" that will only get stronger with FileNet's technology now on board.
A dark horse in the market could well be Microsoft, according to the report, despite currently lacking in technical areas like scalability and robustness. Datamonitor believes the company will address some of these shortcomings in an upcoming Sharepoint Server release.
"Microsoft’s technology is still lacking compared to vendors such as EMC and FileNet," the report said.
"But its solution will always be attractive due to its easy integration with other Microsoft products and because it is built around the popular .Net platform, which simplifies deployment and customization."
Interwoven, Vignette and Oracle were acknowledged by the report as ECM vendors to either "consider" or "explore" -- meaning that additional investigation into suitability is needed.
The report also highlighted several market trends to look out for in the next year, including an increased focus on the needs of small and medium sized businesses, which is also an area where Microsoft is strongly positioned with its Sharepoint product line.
Datamonitor also expects the market to split between large infrastructure vendors like EMC, IBM and Oracle focused on providing broad product functionality and integration and smaller vendors focused on vertical niches.
"Smaller ECM vendors will continue to be attractive targets for acquisition. But they will survive by partnering with platform providers and by focusing on creating a layer of specialized, vertical applications that sit on top of the ECM platforms."
Perhaps the most significant trend to be highlighted by the report is the increased convergence of ECM technology with other markets like business process management and BI. In the latter case vendors from both sides of the fence are working to pull together structured data analysis and unstructured content management into a single platform
"Both technologies are relatively fragmented and promise good revenue growth, and there are many similarities in their technology implementations," the report said.
"Datamonitor expects a convergence between these two markets in the long-term as BI vendors integrate ECM functionality into their products, and vice versa."
The ECM report is part of Datamonitor's Decision Matrix Competitor Focus series that is intended to help companies with their technology purchasing decisions. Datamonitor also owns this publication.
The Matrix provides a summary of ECM vendors' capabilities based on a quantitative technical assessment of their market impact - based on 13 specific evaluation criteria like interoperability and integration, standards support, breadth and depth of functionality, and strategy and execution -- and end-user sentiment based on customer surveys.
Both feed into a determination of the vendors' global "market impact" measured across eight scored criteria like revenue growth, geographical and vertical reach, recognition, and company size. 27.03.2007, Madan Sheina, Datamonitor
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