Ovum analysts explore recent developments in the knowledge
management market as vendors try to adjust to the changing economic
climate.
Autonomy and Verity: confident if wary
It seems that
little of the technology market will now emerge unscathed from the
market downturn. At one point Verity was a company that bucked the
trend in a major way, with 51% growth in its fourth quarter 2001
(ending 31 May 2001), compared with the same period in 2000.
As late as July, the company was still bullish about its ability to
weather the storm. However, in August Verity saw a restatement of
its projected revenues for the first quarter of 2002 (ending 31
August) - with revenue estimates down to $20m-$24m (£14m-£17m) from
an original $32m-$34m. The company is also projecting a loss for
the quarter.
The announcement takes some of the gloss off Verity's recent
product announcements concerning K2 Enterprise and, in particular,
the company's new classification and personalisation tool, and the
associated concept of "social networking". Overall, however,
Verity's position remains strong. The recent announcement simply
brings the company in line with the rest of the industry.
In comparison, Verity's main rival, Autonomy, had already served
notice of tougher trading conditions with its first-quarter results
(ending 31 March 2001). The second quarter saw a similar story,
with more or less flat growth and significantly reduced profit.
However, Autonomy sees little reason to change its strategy: it
continues to position its technology as a core infrastructure
component, extending its reach beyond traditional
 | | "Vendors remain confident that
current conditions are only a blip in the continuing growth of the
knowledge management and search markets" | | | | | |
| | Source: Ovum | | |
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markets for search technology.
The company's latest release, IDOL (Intelligent Data Operation
Layer), provides a layer on top of Autonomy's various technology
components to enable developers to write applications, oblivious to
the types of content they need to access - be it text, structured
data, speech or images. A key aspect of IDOL is that it sees
Autonomy giving more prominence to analysis and retrieval of both
voice and image-based content.
As with Verity with its social networks, Autonomy realises that
voice and image retrieval technologies will not become mainstream
for at least a couple of years. Both see their new products as part
of a long-term strategy. Despite short-term retrenchment, the
vendors remain confident that current conditions are only a blip in
the continuing growth of the knowledge management and search
markets.
All change: IntraNet Solutions becomes Stellent
Content
management vendor IntraNet Solutions announced in August 2001 that
it was changing its name to Stellent. The re-branding comes from a
desire to shed the image of focusing on intranet implementations.
The company wanted to emphasise the range of services that it
offers, including all types of business Web sites, including
extranets and portals.
IntraNet has carried itself well during a downturn that has proved
damaging for many of its closest and largest rivals. The company
reported a quarter-on-quarter growth rate of 13% between the fourth
quarter of 2000 and the first quarter of 2001. First-quarter
revenue reached just over $22m and grew by a further 11% in the
second quarter, with revenue of $24.6m. With these figures in mind,
it is surprising that IntraNet is so keen to abandon a brand name
that represents financial strength and reliability, replacing it
with an apparently unrelated corporate identity.
While those in the industry may have anticipated the move, the
expectation was that IntraNet would adopt the name of its
successful central product, Xpedio. In fact, the company has
abandoned this brand and renamed the product the Stellent Content
Management System. This strategy also seems an odd move for a
company in a state of healthy growth: the choice of name implies
that Stellent intends to remain a one-product company, rather than
take advantage of its financial stability to extend its product
range within the e-business market.
In its hurry to escape the intranet-only tag, Stellent has set
itself a difficult and expensive challenge: to convince the market
that its new brand represents the same strong values as its old
brand. It remains to be seen whether the company can maintain its
financial growth and status while having to re-educate the market,
particularly in such uncertain economic conditions.
Open Market: rescued by Divine intervention
Most
content management vendors are having a rough time this year. One
leading company that has appeared particularly fragile is Open
Market. While having good content management and B2B/B2C software,
and making some high-profile sales this year, it has struggled
financially. A radical shake-up at the end of 2000 removed almost
half the company's workforce.
Open Market's repositioning away from its Transact/Shopsite
software and its subsequent sale to its original development team,
which was finally completed earlier this year through a management
buy-back, has hit revenues hard.
For the first half of the year, Open Market was trading at about
50% of revenue for 2000. Then came "Divine" intervention. The US
company acquired Open Market in a stock-for-stock merger.
Divine is a relatively new company, formed in 1999 by Andrew "Flip"
Filipowski, the founder of Platinum Technology, which he sold to
Computer Associates in 1999. Much of the management team from
Platinum Technology is now working at Divine, which has raised more
than $350m in the past 14 months from its initial public offering
and various additional funding. The company already has more than
3,000 employees and a turnover in excess of $70m in the first half
of 2001 due to acquisitions.
To describe Divine's growth as meteoric is something of an
understatement. During its short life, the company has acquired
more than a dozen organisations, including MarchFirst and
SageMaker, which provide Divine with its turnover.
Quite what happens to Open Market in this maelstrom of company
acquisitions remains to be seen. We hope that its products do not
disappear into a black hole, but that they continue to be developed
and sold. The technology is too good just to disappear.
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