ECM Market Girds For Major Changes

The old is somehow new again. That would be an apt way to describe the Enterprise Content Management (ECM) market. The roots for the technology stretch back nearly three decades, and there have been periods when it has evolved quietly. However, recent changes in how corporations deploy applications and the entry of large, established players has shaken up the market and greatly expanded user choices.

The desire to centrally store electronic information is not new: "ECM systems in one form or another have been sold for more 30 years," noted Alan Pelz-Sharpe a principal at CMS Watch. The need for ECMs has become more pressing lately. Companies now store information in databases, documents, forms, images, and Web content. Recent government regulations have forced corporations to put procedures in place so they can track their information more consistently. ECMs can help, since they provide a central collection point and provide companies with tools to manage information more effectively.

Consequently, these tools have been gaining more attention. EMC, HP, IBM, and Oracle are some of industry heavyweights who emerged as leading ECM suppliers. These companies mainly focused on delivering premises based content management systems that were often used by large enterprises.

Founded in 1935, Grange Insurance, based in Columbus, Ohio, is a $1.3 billion insurance services provider. Through its network of independent agents, the company offers auto, home, life, business, and farm protection to businesses and individuals in more than a dozen states. The company has about 400 servers overseeing 130T bytes of disk storage and an IBM mainframe managing another 1.5T bytes of information.

In 2000, Grange was looking for an ECM to help reduce the volume of paper moving among employees. "We now use IBM's Content Manager to route claim information, pictures, police reports, and Department of Motor Vehicle reports among employee," said Rick Gruly, Staff Specialist, Imaging at Grange Insurance. Traditionally, ECM deployments have been limited to very large companies for a couple of reasons. First, prices for the products have started at the $100,000 mark and often raced past the $1 million mark. Grange estimates that it invested $4 million in its deployment.Kathleen Reidy, senior analyst with The 451 Group, noted that "ECM deployments typically require a lot of custom integration work."  Corporations need to outline what types of information they want to capture, who should be able to access that information, and what checks should be in place to guard against unauthorized access. Then, they have to sit down and design the software needed to support those functions.

Recently, the typical customer profile has been changing for a couple of reasons. First, the Open Source movement has come to the ECM marketplace. Founded in 2002, Nuxeo claims to have 300 customers using its open source Nuxeo Galaxy system. Alfresco, which was launched in 2005 by John Newton, co-founder of Documentum, and John Powell, former COO at Business Objects, offers the Alfresco Community Edition.

With the Open Source model, a vendor offloads its engineering development costs to a community of programmer and therefore can deliver functional products at lower prices than the traditional suppliers. Even Microsoft recently signed off on this model as an appropriate way to develop software. The Open Source approach has been popular in small and medium companies who are often looking for ways to lower their IT costs. However, larger companies may be hesitant to rely on Open Source ECM products because of concerns about product support.

Another recent change has been the emergence of a few Software as a Service (SaaS) ECM options: Hyland Software, SpringCRM and Xythos Software have taken this approach. Like Open Source, the SaaS model has garnered interest from small and medium businesses but has not been as popular with large, complex ECM deployments.

Another significant development was Microsoft's market entry in the spring of 2007 with its Sharepoint ECM: "Microsoft dramatically altered ECM product pricing," noted Mark Gilbert, research vice president at Gartner. Rather than the typical $100,000 starting mark, a number of systems are now available for about $10,000.The recent market changes have created opportunities for smaller vendors to loosen the grip that the established ECM suppliers have had on the market. As a result  after a period of relative calm, the ECM could now be poised for a time filled with dramatic changes.

A Sampling of ECM Products:

Alfresco Software
Alfresco Enterprise
$15k per CPU

HP
HP TRIM    
$452,180 for a 600 user license

Microsoft Corp.   
SharePoint Server 2007,           
$4,451 for server, CALs also requiredMicrosoft
SharePoint Online           
$7.25 per user per month

Oracle         
Oracle Universal        
$115,000 per CPU

SpringCM   
SpringCM SaaS    
$50 per user per month Platform
   
Xythos        
Xythos on Demand SaaS            
$19.95 per user per month
Xythos Enterprise    
Document Management Suite
$25,000