Friday, July 07, 2006

Dear Mr CIO - don't hold off buying ECM

For the last few months Microsoft has been rattling ECM vendors with the hints and announcements of a range of capabilities that intrude into the ECM infrastructure space. Many of these vendors have made public their plans to embrace Microsoft building on the new capabilities, while others are keeping quiet.

How does this relate to New Account Opening?

As I wrote in my post
Vista in 2007 v. improved New Account Opening now the financial services CIO has some tough decisions to make whether: to improve ailing processes now, or wait to see what comes out of the new Microsoft driven ECM world.

With some insight into how vendors and technology will look when the dust settles the CIO can hopefully continue on a progressive technology timeline and not just 'wait and see'.

So how are the ECM vendors going to respond and how will technology look.


For some vendors the new Microsoft technology will give them the chance to concentrate less on what they consider low-level infrastructure capabilities: records management, workflow and web content management. Instead they plan to build value on top of these features, despite that in some cases this represents serious competition to their core products.

I would suggest that for low- to mid-tier ECM vendors this may make sense. There is no competing with Microsoft at this level, especially for the SMB or departmental market, as prices will plummet. So take the opportunity to stop building valuable but expensive infrastructure and instead focus on one of two things: adding unique features and usability on top of MS; or select a business problem that you have expertise in solving and build out an out of the box offering to address it.

In the past vendors have been reasonably successful at both approaches, but unless you can imagine and market the next killer-app, the latter may be easier to sell. As a prime example, look at OpenPages - previously an attempt at getting into the document management had limited success, so molding the product to a specific business problem (governance and compliance, specifically SOX) put them into a focused and driven market segment.


For the mid- to upper-tier vendors the MS technology presents a challenge, as it appears that some of their core enterprise level technologies will be commoditized.

Some vendors (e.g. FileNet) have chosen to publicly embrace MS, although you wonder what they are thinking behind the scenes. They could believe that MS is not yet convincing enough in the traditional market of high-volume imaging that they can survive.

Other vendors seemed to jump right into bed with MS. For example OpenText with its announcement of almost embedding the new MS platform into their offerings, and its approach to acquire Hummingbird, a traditional MS mid-tier player. Not surprisingly though they are reserving the records management / information lifecycle management for themselves.

How are the big ECM vendors going to survive?

Not all doom and gloom (for the vendors)

As a CIO you can guarantee that large true enterprise ECM vendors will be innovative to ensure they maintain their prices and market share - both in technology and marketing.

The big ECM vendors have some options:
  1. Extend and enhance in-house technology with the MS capabilities
  2. Build business solutions on top MS and in-house technology
  3. Embrace the user facing components, like Office 2007 with strong integrations and value-adds
  4. Identify and enhance enterprise technology requirements that MS can not easily deploy
  5. Get acquired by Sun (assuming you have a Java technology base) - hmmm maybe not, aren't Sun getting out of software? EMC already have Documentum. Who is left? HP?
  6. Run away and hide...
OK maybe the last two aren't good strategies! But the first four, probably in combination offer some strong possibilities. Over the next few days I'd like to discuss these options, to help financial services organizations understand the real effects of the MS technologies.

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