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ECM Industry Perspectives - Consolidation? Convergence? or Evolution? Find out the Truth

17 December 2009
The ECM market is undergoing further consolidation, convergence and evolution with the impact of Microsoft Sharepoint, Web 2.0, cloud computing, enterprise social networking, virtualisation and other innovations and discontinuities in the market.
 
As we approach the end of 2009, John Symon, SVP Asia Pacific at Document Boss, gleans some insightful perspectives from three industry veterans in both the USA and Europe: 

John Mancini (President, AIIM International); Alan Pelz-Sharpe (Principle at CMS Watch) and Ulrich Kampffmeyer (President of Project Consult) on some of these key issues. As all three have the benefit of speaking to a broad cross section of both vendors and end users, they are well placed give a qualified view of some of the current and emerging trends in this sector.
 
 

         

 

 
 1. Which of these and other influences do you consider is having the greatest impact on the ECM and related technology and applications markets, and why?
 
Mancini - The good news is that there are a lot of content and document options out there. The bad news is that there are a lot of content and document options out there.
 
The elephant in the room in a lot of ECM discussions is SharePoint. Since its launch, SharePoint 2007 has demonstrated phenomenal growth. Recent AIIM surveys have indicated adoption rates of over 65% across multiple geographical regions and different verticals and Microsoft is positioning SharePoint as the “Information Operating System” for organizations. It seems as if all organizations using Microsoft products will implement SharePoint over the next few years and Microsoft has already begun to create awareness around SharePoint 2010.
 

"Microsoft is positioning SharePoint as the 'Information Operating System'. All of this is changing the ECM industry since ECM implementations now have to add value to SharePoint.   SharePoint 2010 will consolidate the ECM repository business."

 
In many ways, "SharePoint" has become something of a noun in the ECM space (like "Kleenex" for tissues or "Xerox" for copying), describing, for many end users, a cluster of functionality that begins as a replacement for shared drives for office documents and a collaboration platform and extends into other more complex areas as the platform spreads. Even competitors to SharePoint in the collaboration space tend to increasingly use SharePoint as the reference point, essentially saying, "We can do 'SharePoint-y things, but in a different infrastructure." A number of the more traditional ECM players who are focused on transactional content and the mission critical processes associated with this content, tend to position their capabilities as the "stuff" that SharePoint does not do out of the box.
 
All of this is changing the ECM industry since ECM implementations now have to add value to SharePoint.   SharePoint 2010 will consolidate the ECM repository business.  A great deal of collaboration-driven and office application content in organizations will be housed in SharePoint repositories. 
 
We are also seeing a growing interest in open source content solutions. This is particularly evident in Europe (witness the European Commission white paper on open source solutions), but is increasingly the case in the United States (witness the recent decision to host the White House site on Drupal). Tom O'Reilly offered these comments on the implications of the Drupal decision: “While open source is already widespread throughout the government, its adoption by the White House will almost certainly give permission for much wider uptake…There are huge opportunities for open source, web 2.0, and new media companies in government, but there are also challenges reaching that market."
 
Open source companies seeking to penetrate the ECM space include, but are not limited to, Alfresco, KnowledgeTree, Nuxeo and Plone. There are also a number of open source companies focusing on the WCM and E 2.0 space, most notably Drupal, Joomla! and WordPress.
 
The more "traditional" ECM players (e.g., IBM, Oracle, EMC, Hyland) increasingly focus their value on their robust capabilities relative to content intensive processes, imaging and capture and records management and e-discovery, areas that are still relatively immature within SharePoint. These solutions typically entered organizations within a single department and then spread. Early implementations were focused on the needs of document-intensive process owners and specialists rather than a broad base of general knowledge workers.
 
These companies also focus on their ability to manage content across a variety of repositories and forms (including SharePoint content) and across the full continuum of retention and records requirements. The larger of these companies (and Microsoft as well) is increasingly focused on theblurring lines between structured and unstructured information and the desire of users to manage all of this content and information, regardless if its type. The smaller ECM companies are increasingly focused on departmental and process specific document management and building their value on their low cost, ease of adoption and domain expertise.
 
Alan Pelz-Sharpe - As our work at CMS Watch is focused entirely on end users/buyers I am very leery of jumping on the buzz word bandwagon. Hence, I would say that, though Cloud Computing, Social Networking and Web 2.0 are all things that will find their place and articulate their value, it will take time. In 2010 I think key areas of impact will be Ajax UI's, an increased interest in compliance and RM, and deeper integration with ECM technologies into other business applications (CRM for example). SharePoint 2010 will have a lot of hoopla around its launch and will impact the market, but I am not convinced it will have the impact that the 2007 version had.
 
 
Kampffmeyer - The market place for ECM Enterprise Content Management has been changing all the time, but the speed of developments has grown and the market is in the process of consolidating. The major trends are no longer coming from the ECM industry but from other ICT areas. Sharepoint 2010 is one of the major drivers, although Microsoft does not position Sharepoint as a “real” ECM compared, for example, with the AIIM definition. Sharepoint 2010 is a market opener but it also reduces the list of ECM unique selling benefits with enhanced features in relation to collaboration, records management and document management. Sharepoint will be the big integration and collaboration platform for in house installations which will squeeze ECM as services to the backbone of information management solutions.


"The Cloud and SaaS Software as a Service are the big competitors for ECM in house installations and the offerings grow."

 
The other major trend is 2.0, especially as Enterprise 2.0, bringing Web 2.0 technologies to the internal IT solutions within the boundaries of the enterprise. But there are problems with 2.0 in regard to overloading end user functionality with less central control, volatile formats, which are not prepared to be preserved as records and new ways of interaction and communication which have to overcome the existing structures and workflows in the enterprise.  Cloud and SaaS (Software as a Service) are the big competitors for ECM in house installations - and the offerings grow. It is no longer simple outsourcing of separate tasks but a general trend towards moving everything into the cloud. We already see CRM and project management solutions, e-mail-archiving and collaboration as service offerings. However, there is still the question of security, trustworthiness and accessibility with regard to acceptance of the cloud. Time and cost saving arguments will change the scene. I believe the most impact on ECM (Enterprise Content Management) in 2010 will be E 2.0, SaaS and the Cloud, with Google Wave as a prominent application along with Sharepoint 2010. On a lower level of impact, but with evolving importance, are Quickr, Social Software as business platforms, Governance Risk Management and Compliance, and business process automation with classification, neural networks, RFID, Business Intelligence and other related technologies.
 
 
 
2. What do you expect the key drivers will be for buyers of ECM related technologies in the coming year
 
Mancini - A great source of information relative to the key drivers for the industry is our e-book — 8 reasons you need a strategy for managing information — before it’s too late. These are:
 
  1. A tidal wave of information - the amount of information that must be managed and prioritized by knowledge workers is increasing exponentially.
  2. Ubiquitous computing - access to content and documents outside the confines of a traditional office is becoming more complex as computing platforms become more mobile and available.
  3. Social everything - there is an explosion of interest in informal and ad hoc social technologies.
  4. Collaboration without governance is a disaster - organizations are looking to bring social technologies into the enterprise; the key question is how to do this without losing control.
  5. The era of simplicity - as document deployments move from document “specialists” to information “generalists,” the need for simple user interfaces becomes even more important.
  6. The Tree-Hugger's Time Has Come - the problems in the economy have led many to sideline “green” issues for the short-term, but these concerns are not going away in the long-term, and content management will be a key part of the solution.
  7. You can no longer do this manually - the information explosion problem has been created by technology; it cannot be addressed with the application of technology.
  8. Mismanagement risks are rising - between compliance and e-discovery, the stakes have never been higher.                                                                                                                                                                                                                                      To understand all of this complexity — and opportunity — my advice is to get educated! AIIM provides vendor neutral information on document, content, and records technology. Check it out — http://www.aiim.org/training.
 

Kampffmeyer - End users do not believe in ECM acronyms any more. They are looking for designated business applications including ECM functionality. If we think about traditional ECM technologies and applications - virtual folder solutions, capture and entry process applications such as virtual mailrooms, electronic archiving and digital long term preservation, records management and workflow – these are still the most important drivers and application areas. Not the fancy stuff, but reliable basic software. When it comes to collaboration, digital asset management and content management, web 2.0 functionality is required. These functions are an overlay only to the ECM backbone. ECM is no longer visible in these solutions. Probably only a small applet or one window remains in the user interface for ECM. The key drivers for implementing ECM technologies will be cost savings, fulfilling compliance and regulatory needs, consolidation of infrastructure, creation of federated repositories for use with every type of application and search engines, and integration of dedicated ECM components with ERP, Sharepoint, Office, CRM, PLM and other application software.
 
Pelz-Sharpe - Customer self service be that internal customers or external will be a key driver. Be that managing travel and expenses online, helpdesk, retail customers or eGovernment. Using ECM technologies as part of that backbone will be key.

"Customer self service, be that internal customers or external will be a key driver. Using ECM technologies as part of that backbone will be key."

In fact many of the larger projects we are seeing in Q2 2009 are already taking that path, in short how can we do less in person and more online and in an automated fashion.

Another driver that will start to emerge in 2010 is that of managing multilingual content, something we have needed to do for a long time, but haven't. Now its becoming an imperative and most of the vendors do a poor job at this - no doubt at all though that customer demand is building.
 
 
3. Will ECM exist as a separate, definable, sector in 5 years time?
 
Mancini - We have spent a decade collectively trying to apply a very simple label to a very complicated space. When we all started down this path, it was driven by the need for a more expansive term to describe the changes going on in our industry. 
 
We all knew what we were talking about when our industry consisted of these discrete parts: 1) document management; 2) imaging; and 3) workflow (limited totally to the workflow of documents). But as the industry began changing about a decade ago we needed something more comprehensive to describe the industry we were becoming.
 
Hence ECM. The goal was a label like ERP or CRM that could provide a shorthand reference point for who we are and what we do. Now this begs the question of whether we are a single industry anymore or more accurately a collection of technologies in search of a business problem to solve (i.e., a mainstream set of technologies). But let me put that question aside for a moment.
 
Of course, like any simple term to describe a complicated set of conditions, those selling solutions in our space attached all sorts of qualifiers and explanations to the ECM label to describe what they were really talking about. All of which has had the effect of baffling many potential customers. Because while describing a "space" is important to sellers and analysts and is certainly handy shorthand, users usually couldn't care less.
A data point to consider.
 
A few years ago we did a survey in which we asked a sample of user organizations outside our industry whether they knew what the term ECM meant. We even gave them some clues. The result? Less than 30% knew what we were talking about. I don't think things have gotten much better since then. This same set of users place a huge value on the importance of effective management of information to their long-term strategic success. What a disconnect!
We are actively considering this question and expect this will be a major industry focus in 2010 -- "Is the 'ECM' label helpful for our industry, or counter-productive?"
Those interested in chiming in on this conversation can best participate by going to my blog — Digital Landfill — at http://www.aiim.typepad.com 
 
Pelz-Sharp - Yes it will I have no doubt about that. ECM has grown and grown over the past few years, we evaluate more products now than ever before, and there is a constant stream of new vendors entering the market. It will change, as all sectors do - we will have a distinct information management platform (SOA) sector at the high end, we will have countless industry and process specific solutions, and we will have innovation. Innovation will challenge the current paradigms of version control, check in/out, library services, search and business process management, and that's a good thing. ECM has for too long been a "me too" type of sector, but it is ripe for new entrants to come in and shake things up - and some are already starting to do just that. We have Nuxeo, KnowledgeTree, InfoGrid and Alfresco bringing in open source options, I recently evaluated FabaSoft from Germany and saw some really cool innovations that I have not seen in any other products. ECM will continue to exist, for sure.
 
 

Kampffmeyer - Yes, probably it will, but only as a niche market. The mainstream vendors of ECM are today companies such as Microsoft, IBM, Open Text, EMC and Oracle. Open Text is the only ECM software specialist in this group delivering standard software and services for “everything”. For them the battleground is not ECM – it is the war for the leading operating system, for the domination of the internet, the lead in SaaS, the mastery oft he desktop, the control of content. ECM is on its way to become infrastructure and a set of services. There is some kind of self-fulfilling prophecy: ECM wants to integrate unstructured content with structured data and processes. When we succeed with this integration, when we no longer have specialised content management but general information management, where there is no difference by data types like content, documents, data, assets, etc  ECM will become part of Information Management. Probably it will become better defined as EIM (Enterprise Information Management), probably as part of Enterprise 2.0, probably as part of the knowledge management renaissance. However, there will be a part of the ECM industry surviving: specialists for long term archiving and digital preservation, for records management, business process management, for business applications with integrated ECM features, or specialists for information capture, classification and conversion.
 

"ECM wants to integrate unstructured content with structured data and processes. ECM will become part of Information Management and probably will be better defined as EIM. (Enterprise Information Management)"

 
A lot of the mid sized companies with their own ECM products will have to integrate with standard software, focus on specialized solutions for certain typical document oriented business cases, or for special solutions for defined industries. And there are two features, which will keep these companies a live for a long time – delivering solutions for Compliance and long term archiving. So my prediction for 2015 – yes, there is still an ECM industry, but there is a trend to SaaS, EIM Enterprise Information Management and E 2.0 incorporating ECM components and services as infrastructure.
 
Many thanks John, Alan & Ulrich for your valued market perspectives. These are also consistent with what Document Boss is finding in the market – an increasing (not decreasing) number of innovative suppliers, integrators and service companies in an ECM sector that is constantly evolving and expanding. The catalysts for dramatic change are a combination of the impact of Web 2.0, Sharepoint, SaaS and the Cloud together with the drivers of Compliance, eDiscovery, Collaboration and the quest for organisations to achieve improved Business Process & operational cost efficiencies for the management of the exponential growth of information. 
 
“ECM” or “EIM”…there is an exciting future ahead for all!

 

For further information on the each of the above contributors click on the following links
 
John Mancini              AIIM International
Alan Pelz-Sharpe      CMS Watch
Ulrich Kampffmeyer    Project Consult


 

Tags: BPM, BPO, Covergence, ECM, EDM, ICR, OCR