Vendors: Stay Vertical or Go Global

By Alan Pelz-Sharpe

Document management is mature by information technology industry standards. But its maturity masks the fact that it is a technology that has sat around a long while, promising the world. Evangelized about by many, document management has never made the huge impact it promised. The modest but unspectacular adoption of the technology over the past 10 years has always been interpreted as a sign of a healthy market with an even rosier future. But is that stability and optimism about to change?

A number of forces are emerging that combined could be a blow to traditional document management vendors. As an analyst, what worries me most is that these imminent changes appear obvious, yet so few vendors outside of the major players seem to be taking note.

The first and most immediate change is the increased commoditization of document management. Lotus started the trend a few years back with Domino.doc, software that provides basic document revision control at a low price. But it will be the arrival of Microsoft to the market later this year that will really put the cat among the pigeons. It has been an open secret that Microsoft has been working on document and knowledge management functionality as part of a project named Tahoe.

Okay, so Tahoe will bring only the most basic document management functionality suitable for departmental applications. But it is likely that this functionality will come free or at a very low cost with products such as Site Server and Exchange.

Add to this scenario the recent arrival of Oracle iFS (Internet File System). FS provides basic versioning and check in/check out functionality built on top of Oracle's 8i database - and it's available for free. Lotus, Microsoft and Oracle make a gruesome threesome, so the future for traditional document management vendors looks bleak.

Staying way ahead of these products in terms of increased functionality only goes so far toward stemming the tide, because many facets of document management functionality already go unused on servers around the world. The truth of the matter is that users' needs and requirements are often far less than technology provides. Many document management systems are overengineered for the requirements faced by most ordinary businesses. Basic, inexpensive document management functionality from Microsoft, Lotus and Oracle starts to look more and more appealing when seen in this light.

Of course there will still be the need for complex vertical solutions for pharmaceutical, engineering, insurance and other specialized applications. Clearly, any need that requires imaging, enterprise report management, etc. will still be a point document management solution. Regulated activities, such as medical manufacturing, aerospace, transportation and legal, will also demand rigorous control of certain documents and content. But the idea of true enterprisewide document management delivered by smaller software vendors becomes less and less believable. There's little wonder that the big document management players are moving out as quickly as they can.

Relabeling, rebadging and repositioning are the order of the day. Documentum went from being a document management company to a knowledge management company to a content management company all in less than 18 months. Try to find prominent references to document management on the Web site of FileNet or any other major vendor. They have dropped the term and are moving on - but to where?

In general, those on the move are trying to appeal to the major Fortune 1000 companies by offering enterprisewide content management. Some are shifting out of their established vertical niches and are trying to reidentify themselves as true global players. They're moving out from (still lucrative) departmental solutions with pretensions of delivering full corporate solutions, handling everything from incoming mail to intranet/extranet and Internet site contents.

This kind of move brings a whole new range of challenges, not least of which are the cultural aspects of a multinational corporation. A company that may nominally be based in North America in reality has no real base; it operates and moves its resources around the world to wherever it is most economical. Vendors will not only have to grasp the complex and ever-changing business processes within such a company, they will also have to develop an understanding of the lingual and cultural makeup of the organization.

It is in the cultural department that North American vendors may be left behind.

I have to make this next statement bold and clear: North America is not the center of the universe. The invention of the global corporation has only just come of age; although the concept and hype have been around a long time, it is the Internet that has made this possibility a reality. The idea of enterprise software that only runs in English becomes a foolish path to follow. If North American vendors (and many do) think that they can wait for the rest of the world to speak English, they are in for a very long wait.

The goal of multilingual knowledge management - and I mean knowledge management as an organizational discipline, with information and expertise shared and accessible across the enterprise - is to ensure that everyone can work in their native language, with due deference to native and organizational culture. English may be the language foreign nations use to sell products, but they will seldom buy in any other language than their own.

Cultural insularity could gradually freeze North American vendors out of the market. Difficult to believe? There is no doubt that North America provides much of the hardware and software for the world's computer systems, but in the area of knowledge management, the innovations coming out of North America are uninspiring. For at the core of knowledge management, just as at the core of document management, is content, and content generally means words.

Innovations from Europeans, such as the German company SER or the English company Autonomy, have grasped the fact that strict hierarchical file storage is not "people compatible." Incoming content needs to be far more intelligently stored and classified than at present; it needs to be read and understood by the technology. It then needs to be intelligently routed to the right people - in the right language and at the right time.

The idea of creating a truly collaborative enterprise is still just that, an idea. But in Europe, the vision is much closer to reality than in North America. This is bad news for North American document management (turned content management) vendors that aspire to tackle enterprisewide projects for global organizations. They'll be squeezed out by Microsoft, Lotus and Oracle at the low end of the market while offering limited international adaptability and future vision at the other.

Whether you call it document management, knowledge management or content management, or prefix an "e" to any of them, the business is on the verge of exciting times. There will be winners and losers. Some new entrants may succeed and some old friends may say farewell. Only one thing is clear about the future: Document management needs to move on, quickly!

The well-established vendors will stick with or move back into their core niche verticals. Some will also move outward to the wider, more fiercely competitive Web management world. The rest will have to wake up soon or say goodbye.

Alan Pelz-Sharpe is senior consultant, content management and workflow, at Ovum, a research and consulting firm headquartered in London.