Best And Worst Of Times For Enterprise Search

The enterprise search market has reached a critical point. While the need for search capabilities has grown in a widening array ofapplications, the market for these tools is reaching a saturation point,with revenue decreasing and pressure on suppliers' bottom lines rising.The end result is companies now find more enterprise search systemsavailable at reasonable prices than ever before, but the number ofvendors offering these products may soon dwindle. Companies can find a wide range ofpossible solutions and chances are good that one will mesh with theirbusiness requirements, but the long term future for manyof the suppliers is unclear. Consequently, a business could make apurchasing decision and find its vendor acquired or perhaps out ofbusiness in a few years. In sum, for buyers, it is the best of times,but it is also the worst of times to be on the looking for anenterprise search system.

Data expansion has been driving user interest in search systems. In most enterprises, storage requirements have been increasing at healthy rates, 10 percent on the low end and 100 percent in certain cases. "Many companies have generated information that can help employees do their job more efficiently, but often they cannot easily locate that data," stated John Turnbull, president and CEO of Thunderstone Software LLC. Consequently, search system design has been changing. Traditionally, these tools were built as horizontal products. They were constructed to consolidate and prioritize information found in many different locations. Vendors' focus initially was on widening the reach of their products, enhancing them so they could find multiples types of documents, Web content and video images. The more data sources they could examine, the more valuable their products became.

Recently, that outlook has changed. While there can be value in bringing information from multiple sources into a central location, the reality is that enterprise customers usually require specific rather than general pieces of information. For instance, in large corporations, employees often need to sift through millions of items to pull out a handful of records. While search works much of the time, it is still far from perfect. According to Outsell, users' searches fail 31 percent of the time, largely because they do not identify specific data elements. "Vendors have been trying to have their search systems deliver more precise information," stated Leslie Owens, an analyst with Forrester Research.

To increase the likelihood of returning relevant data to users, search vendors have made their systems more application specific. For instance, Coveo tweaked its product and now has search systems for Customer Service & Call Center, email and extranet applications. In other cases, suppliers have focused on specific vertical markets. For example, Recommind has concentrated on building eDiscovery tools.

Mobility is another area having an impact on the enterprise search market. Smartphones have become a staple in many executives' business arsenals. Consequently, they want to be able to be able access corporate data on cell phones whenever they are traveling out of the office.  Since these are small devices, vendors have tweaked their search systems to simplify data collection. Vivisimo's Velocity for Mobile can be configured to crawl and index special collections—including customer data, support logs and contract databases—then call out those results above the main result set.While the market has been pushing vendors to broaden their reach, there has also been pressure on their pricing models. Traditionally, enterprise search tools were designed to meet the needs of very large companies. In some cases, they started off as tools to help employees find information housed on company intranets, such a company policies and employee contact information. Gradually, corporations desired to use the tools to help enhance business processes. They wanted to capture information, such as internal knowledge. Because each corporation operates in a distinct manner, adding such capabilities was often significant and time consuming. Consequently, these products typically represented multi-million dollar sales, with lengthy decision processes and implementation tables.

First Google, and later Microsoft, entered the market with tools designed for the masses rather than the enterprise. "Google and Microsoft had a dramatic impact on enterprise search system pricing," stated Whit Andrews, vice president at Gartner. Companies can now find search systems for a few thousand dollars and in some cases, the products are bundled into applications or other tools. The result is mounting pressure on search specific vendors' bottom lines. The following table gives an example of the range and cost of vendor products available: