We began researching what we now call Cloud Content Management and Social Business in the fall of 2008. Our Founder spent nearly a decade working with a very dedicated group of professionals to build a nationally recognized systems integration company in the Northwest. Over the years the company worked with many familiar content management products including Optika, Kofax, OTG, Cardiff, Stellent, OnBase, OIT and many others. Like many regional VAR’s and Systems Integrators we worked in familiar verticals like government, transportation, financial services and healthcare to build out accounts payable, claims processing, human resources, electronic health records and many other document centric and workflow oriented business processes.
We watched the industry shift from 2005 – 2008 as massive consolidation of the marketplace occurred. The founder of Alfresco, John Newton posted on his blog in 2006 that “Clearly, the reason for these mergers is not for technology, but for market share and customer base.” A prime example of this is the cascading acquisitions of Optika to Stellent and then to Oracle. After the acquisition the partner channel was all but disbanded as Oracle went on to take many of the larger customers direct by offering sweet software maintenance renewals at opportune times. Any acquiring company gets that right, especially when you pay $440M to get a foothold in a high growth market like content management. This is just one example of how the market shifted creating an environment that required partners, customers and competition to adapt. Not much adaptation actually occurred in fact many of those Legacy platforms and VAR’s still exist today largely unchanged. In the case of Oracle they actual used only portions of the software technology that they acquired and focused instead on building a newer Java based platform from scratch, incorporating other technologies like AquaLogic to create a more integrated platform that supports the proliferation of their ERP and Database assets. Instead if adaptation a whole new era of content creation and management occurred.
It was November 2009 when we saw that the industry was bound for yet another chapter in this saga. With social media, posts, tweeting and friending all the rage it was clear that a new age of content creation and ultimately the need to manage that content in a structured way would be required. FaceBook, SalesForce, eBay, Amazon and so many others were successfully attracting consumers and massive user bases, proving that the Internet was capable of supporting not just eCommerce but many forms of information and compute services. During this same time period new content management software companies like Alfresco, SpringCM, NetDocuments, FileBound and many others began to spring up to fill the void that the aforementioned consolidation created. It was clear what was coming and what it would bring in terms of market opportunity. The technology shifts from client-server to the web browser offered a more ubiquitous user interface that would apply to a much broader audience. This created what amounts to a digital gold rush for user accounts. Whoever grabs the largest user base or market share wins, even if you have to give away storage and let people access your software for free.
Since 2009 companies like Box, DropBox, Huddle, IGLOO, EverNote, Yammer, SocialCast and more have jumped in to seize as many new content centric users and customers as possible. Not all of these services provide exactly the same thing and all have niche features that differentiate them. The landscape seems to shift each week with new announcements of funding, features and strategic partnerships. Still more are emerging and some like Alfresco have deep understanding of legacy enterprise content management fundamentals. A key focal point of the Alfresco offering will support connecting all your file sharing, collaboration and social engagement sites to provide a common inbound / outbound content repository. This is often referred to as federated access.
Box announced during the Info360 AIIM conference last year that they entered into an agreement with EntropySoft to provide federated search capabilities but not much has materialized to date. The EntropySoft solution is very comprehensive and supports connectivity with over 30+ content management repositories using native API’s from each vendor. Alfresco was built as an open source content management platform, they understand traditional approaches to content management. Now they are launching a cloud based services. Box is a cloud based service used for file sharing and collaboration but has not yet included more traditional content management features. So the Cloud Wars have only just begun.
It is still too early to draw any conclusions as to who the winners and losers will be but it is exciting and there is still a ton of opportunity to stake your claim. All these services will undoubtedly have gaps that can be filled by individual consultants, developers and companies that focus on specific use cases and business process scenarios. In a post released today a demonstration of scanning to a Box repository showed just one example of how new ideas and innovation will spring up to take advantage of cloud content management.
Reminds us of the 1990′s when document imaging was very niche and the biggest argument was “Are these images legally admissible in a court of law?“. Back then FileNet was the big winner and eventually got gobbled up by IBM.
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Hi Shadrach. Great post! I know I’m biased, but as a recent join to Alfresco who used the platform to launch my own cloud company, I honestly think Alfresco is by far the best established Enterprise vendor to capitalize on this shift in Content Management.
The incumbent vendors like Microsoft, IBM, ECM, Oracle don’t really have a good, if any real strategy or technology to keep up with the shift going on, and when the dust settles a lot of them are going to find themselves irrelevant or niche, especially the more traditional ECM vendors like Documentum and FileNet.
This leaves the space wide open for new vendors like Box, who have come from the consumer space, which is very apparent from the lack of key ECM features in their platform, and more agile Enterprise vendors like Alfresco. We’re both coming from opposite ends of the spectrum and will eventually converge, but its my belief until Enterprises put a significant proportion of their Enterprise content in the cloud, which is going to take a while as we work through the security and regulatory concerns, there’s a far bigger opportunity for vendors that can provide Enterprise solutions for both sides of the firewall, instead of just Cloud or On-Premise.
We also partner with Entropysoft, and I suspect that the fact not much has materialized from this for Box, reflects that they’re not as deeply established in the Enterprise as they need to be for CIOs to seriously consider opening up all their content to a Cloud vendor like Box.
Shad, first of all, thanks for the reference (and link) back to my post about scanning to box with the Fujitsu N1800. Secondly, you did a great job articulating some of the ebb and flow that the ECM industry experienced in the last decade or so. As one that is still working inside the Enterprise I can tell you that the idea of cloud, or hosted services and application is making inroads. Slowly in some cases but nevertheless the hot trend we all see is having an effect on the hardened walls of the established enterprise. What I am seeing is that is it making its way from the bottom up, rather from the top down. Smaller user groups that don’t usually get the big $$$ project funding are seeking out ways to solve a problem outside internal IT delivery establishments. I have seen first hand that groups like these, look to cloud-bases services like Salesforce.com to solve their needs with great success. From there the solution takes root and may actually grow to gain more creditably and eventually, official adoption.
Brilliant! You nailed the industry consolidation piece Shadrach. But I have to disagree with David’s comment above. The “incumbent vendors like Microsoft, IBM, EMC and Oracle” *DO* have a strategy to keep up with the shift. It’s the same one that caused the consolidation in the first place – Acquisition.
I agree that they do not appear to have an interest in building out native functionality in anything other than stopgap ways (show me a roadmap and released product to the contrary and I will recant). But those deep pockets and lucrative buy-out offers are what keeps the bigs in play. Innovation happens at one end of the market and the Bigs buy up the winners / most promising. It’s the technology food chain.
I did like how you alluded to the consolidation services coming to the cloud content arena. I hesitate to think that CMIS will be the “one API to bind them all” but we’ll see. Search is a good candidate (though I don’t believe it is the best candidate). But like you say, the CloudWars have just begun in ECM and the battlefields, boundary lines and casualties will be shifting for some time!
Great perspective Shadrach. Having worked in ECM for over 20 years (from SoftSolutions which had 54% worldwide ECM market share in 1994 (IDC) – sold to WordPerfect/Novell) and now NetDocuments (been at this since 1999), a multi-tenant, Software-as-a-Service Cloud ECM, the market is definitely heating up and fun. Because of our background serving law firms and financial institutions, we’ve seen through the years the anxiety and reservations of storing confidential, client-related documents in the cloud. Each year has been easier and easier but now…wow… its taking off for all of us vendors… That is great.
We attribute the consummeration of cloud services and now tablets to be the recent impetus to a wider acceptance of business professionals who want their documents with them whenever and whereever. Dropbox, Box and others have helped from a consumer-ish play, while others such as NetDocuments have always maintained an enterprise-designed application serving document-intensive markets that deal with compliance, client confidentiality and scalability as serious issues. Whereas a few years ago, the largest of law firms in the world would say, “you guys are great for small business” (because its cloud) now we are seeing the largest firms with millions of documents moving to the cloud due to 1) mobility, 2) speed of innnovation and 3) getting rid of those hundreds of servers to deal with inhouse – getting rid of the heavy liftting of IT. Salesforce has greatly helped with their aggressive marketing into cloud CRM and now enterprises are drinking the kool-aid and wanting everything else in the cloud.
Interestingly… traditional document management services were designed to share work product within the organization. Sharing and collaborating of documents is a default with enterprise level ECM, but traditionally it was only internally. With Cloud, and no physical limitations, collaboration is internal, external, anywhere… and is only defined by permission rights. With consumer-ish doc storage apps, they think “me” first and then I share… They don’t think “We”, the organization, the enterprise, and with it all its controls and management responsibliities associated with it. Enterprise ECM thinks the intellectual assets/contents of an organization is by default shared (with rights of course at the doc level) and then the issue is sharing outside the organization. Scalability is the issue. It’s easy to give 1,000+ individual accounts, and then say go share…What about a single, global repository with 1000+ users (or 5,000 users), security groups, integrated network authentication and management, validated and common tagging/metadata, etc, and sharing 10 milllion documents across 20 offices worldwide. Consumer-ish apps can’t scale to the enterprise. Time will tell how the players merger, get acquired or start competing in the middle… as we each penetrate into our successful beach heads. Let the fun begin!
Following from Leonard (and coming from less experience than you or he, but still over a decade in ECM) – I’m seeing that the play for cloud is coming from both ends of the spectrum. As Leonard quite rightly says, the very large enterprises are embracing a “cloud” strategy (although each one probably has their own definition) and these are a great solution for scalability, high availability and multinational location challenges.
At the other end of the market, the client who used to buy a $15-20k solution from Optika is now faced with standing up a weblogic server domain with a six figure starting point for licenses (not to mention costs for technical staff with these middleware skills). I know from experience tht many groups in this situation are not embracing the major players, their enterprise solutions, and the support and training costs that come with them.
For these clients, who have been left behind by the big players and their acquisitions, I think the solution will be to migrate to lower cost or open-source applications or look for SaaS / cloud implementations that lower the cost and complexity of the overall implementation and day to day operation. The challenge, I believe, is in persuading these smaller customers that their data is safe in the cloud, or that open source is a viable alternative for them. It’s not yet clear to me which will be the more attractive alternative in the marketplace.
Shad, that concisely presented the history and where we are today. Alfresco starting their own cloud service is a great step forward since box, dropbox, and others are file systems but not true content management systems.
To make Alfresco and others truly valuable though they should include an integrated document capture service which can easily produce searchable PDFs from scanned documents and then transparently enter them into Alfresco. Our company, Ephesoft, does this today using the CMIS standard and may be the only capture company supporting it. We already use Amazon’s AMS today for our internal demos and projects but we will soon provide a cloud-based Ephesoft capture system to allow anyone to scan and take valuable metadata from documents. For instance, our success with automating A/P (invoice processing groups) means we can automatically extract PO number, amounts due, invoice numbers, etc. from scanned invoices and then deposit the searchable PDFs with the metadata fields directly into Alfresco. This enables any user to very quickly build a complete capture-to-ECM system on the web at a very low cost, far below any other option today.
So Shad you’re exactly right in your discussion and I know with your years of expertise in the capture area that you understand the value of what I’m suggesting. Keep up the good posts!
Shad, I believe the massive shift to the cloud is triggered by at least two very good reasons: a new economic model and new use cases.
A couple of years ago, open source companies introduced a new economic model to differentiate with the big players.
The Cloud is coming with its own promises.
It is not my role to elect the best solution. I leave to CFOs to calculate their applications’ TCO.
I am convinced the real driver for cloud is the adoption of new use cases. All companies need to collaborate more efficiently with their customers, partners, and suppliers.
During the past decade, companies built high protection walls. These walls were mandatory to protect internal systems and data. However, the walls make collaboration with the outside world difficult.
The cloud is coming with great opportunities to improve collaboration. Internal data can stay well protected in on-premises systems, while data used for collaboration can be shared in the cloud.
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I believe it is a good example of Separation of Concerns
For this use case, do companies need a full-featured ECM or a light-weight ECM with a more simple and mobile user experience?
At EntropySoft we believe large organizations need advanced ECM systems internally but also need light-weight agile cloud repositories to share documents.
We are offering the technology to manage the document lifecycle across on-premises and cloud repositories.
This can scale from pre-defined lifecycle processes with automated transfer processes to real-time synchronization of part of repositories.
Hi Shad – thanks for the reference to IGLOO and another great post. Provides an interesting perspective on the evolution of the market for ECM and the intersection of cloud computing and social software.
One of the biggest drivers that we’ve seen behind the emergence of cloud-based social technology is the desire for control. Most traditional ECM deployments have been top-down initiatives focused on corporate-driven goals (ex. managing records, mitigating risk and ensuring compliance around content that resides inside an organization). While most cloud-based social solutions are end-user or departmental deployments borne out of the employees’ desire for greater control over content, how it’s created and shared.
Employees want the ability to access content anywhere, anytime, on any device. They also want an easy way to share content with the people and teams they work with – whether they live inside the organization or outside (in the form of customers and partners). That’s why cloud-based social tools have taken off. It becomes very easy to get up and running quickly, to configure access, set permissions and share content with the people you work with.