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Enterprise Search Market Poised For Constriction?
How many enterprise search vendors are too many? The answer to that question could become clear in the coming months. Traditionally, enterprise search suppliers have been able to charge a premium for their expertise, but such boom times have moved squarely into the rear view mirror. Currently, suppliers' margins are being squeezed, a change that may force some into the arms of willing buyers.
Enterprise search emerged at the turn of the millennium. Employees had become familiar with the quick and easy way that Web searches were conducted and desired a similar experience in the enterprise. However, delivering such capabilities was a challenge for a couple of reasons. There was a wide variety of data types in the enterprise, and they could not easily be consolidated. Also, users desired specific items rather than general locations where they could browse. Consequently, deploying an enterprise search system was a complex endeavor, one where vendors were able to charge premium prices.
That ability has been curtailed by the entry of two of the IT industry's most influential vendors. Google came first and simplified search system deployments by taking an appliance approach. A customer could drop the search device into its network and have the solution running in a day or in some cases even a few hours. Also, the company's product cost a few thousand dollars compared to the tens of thousands and hundreds of thousands of dollars for alternatives.
Microsoft was the next behemoth to shake up the marketplace. The company began bundling its Search Server Express 2008 into its products and followed on with its inexpensive Search Server 2008. These products were suited to simple searches and were sometimes criticized as lightweight and superficial. To fill the void at the high end of its product line, the vendor decided to pay $1.2 billion and acquire Fast Search & Transfer, a Norwegian search solution supplier in Jan. 2008. Microsoft's plan is to integrate its different search solutions and become a one-stop shop for enterprise search products.
The entry of the industry giants dramatically impacted smaller suppliers who could no longer charge high prices for their products. Another problem was the enterprise search market was reaching a saturation point. "Nine out of ten companies have now deployed a search system and three out of four even have two or more," noted Whit Andrews, a vice president at Gartner.
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