Vendors strongly focused on WCM
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1 Markets, M. Gilbert, N. Drakos, L. Latham Research Note 28 August 2001 The Web Content Management Magic Quadrant for 2001 The Gartner Web content management Magic Quadrant for 2001 has three leaders and 33 other vendors. About half of them will be marginalized, closed or acquired by the end of 2002, and prices will fall significantly during that time. Core Topic Knowledge Workplace: Content, Media and Publishing Key Issue How will Web content management evolve in the next five years? Strategic Planning Assumptions Through 2003, enterprises that are concerned with maximizing the end-user experience on their Web sites will need to use products and services from multiple vendors (0.8 probability). By YE02, half of the WCM vendors that exist in 2Q01 will be acquired, marginalized or leave the marketplace (0.8 probability). Due to economic and competitive forces, average selling prices of WCM solutions will drop by one-third between 2Q01 and YE02 (0.8 probability). The 2001 Web content management (WCM) Magic Quadrant includes three vendors in the Leaders segment and 33 vendors in three other segments: Challengers, Visionaries and Niche Players. The criteria for positioning are described in Building the Web Content Management Magic Quadrant, M These assessments are made from a North American perspective, so buyers in other parts of the world may find that some vendors would have increased viability in their native regions. Leaders: The leaders represent three major segments of the WCM vendor population: Vendors strongly focused on WCM Vendors with a suite of enterprise software, including e- commerce and portal products Traditional document management vendors now addressing the Web Interwoven is a specialist that focuses on WCM. It offers seven modules ranging from content development templates, through workflow tools that organize document review, approval and version control, to indexing and categorization tools, to content delivery and syndication. Interwoven s strategy is to treat WCM as a very broad specialty. Thus, the seven modules in its product line bump up against the edges of e-commerce and portal software, but are all designed to operate with a WCM viewpoint in mind. Interwoven s strength is in this focused approach, which tends to keep investments within its core competency areas. Its challenges are not to miss any large-scale developments that might render its narrow focus off-target or irrelevant and not to define WCM so broadly (in an effort to prevent that) that its product line becomes diffuse and difficult to integrate. Gartner Entire contents 2001 Gartner, Inc. All rights reserved. Reproduction of this publication in any form without prior written permission is forbidden. The information contained herein has been obtained from sources believed to be reliable. Gartner disclaims all warranties as to the accuracy, completeness or adequacy of such information. Gartner shall have no liability for errors, omissions or inadequacies in the information contained herein or for interpretations thereof. The reader assumes sole responsibility for the selection of these materials to achieve its intended results. The opinions expressed herein are subject to change without notice.
2 Vignette sees WCM as more than a framework to enable document creation, workflow, version control and Web publishing. Its suite encompasses a broad range of additional Web site capabilities, including content syndication, personalization and portal functions. An early entrant in the WCM market, Vignette has partnerships with many enterprise software vendors that augment its offerings with services such as software configuration management (SCM), data mining and application development. Vignette s strategy is to provide a broad, integrated range of Web site and e-commerce technology that works together, including WCM, SCM, personalization, portal and application integration tools. Its strength is an expansive vision that puts WCM into a large-scale strategic framework. Its challenges include the possibility of being surpassed by a morefocused vendor that better addresses the operational details of WCM. Documentum is a long-standing leader in the pre-web document management market that has repositioned itself to go where the documents are going in today s Web-centric world. Unlike most dot-com enterprises, it has been in business for 11 years. Documentum s overall strategy is to leverage its enterprise document management skills, along with its customer base, and transfer its strength in that arena to the Web. Its strengths are experience in document management (a long-term leader in that area) and a deep knowledge of workflow, version control and archive management. Its challenges include its dependency on its document management legacy and reliance on a customer base in that domain. It must grow a substantial base of customers that come to it for WCM functionality alone. Visionaries: The Visionaries segment includes 10 vendors that have strong prospects, but for economic or technical reasons have more modest execution ability now. Foremost among these is Stellent (formerly Intranet Solutions). It is one of the few WCM vendors that has been profitable for more than a few quarters and is a candidate for leadership status in the future. Below it are many vendors with good ideas or products that need more money, experience and customers to move them upward in Ability to Execute. Services and software vendor divine announced an acquisition of Open Market that may give it greater financial resources. Challengers: The Challengers segment has only two vendors. Each is a large, multiproduct vendor that integrates content management with a broad selection of other enterprise software products. BroadVision offers numerous site-management, e- commerce and portal products. It uses a variety of strategies to provide WCM, including partnerships with other vendors discussed here. Microsoft just purchased WCM vendor 28 August
3 NCompass Labs for its Resolution product, which it now offers as the Microsoft Content Management Server. These WCM products, in part, are propelled to a high Ability to Execute rating by the financial resources of BroadVision and Microsoft (NCompass Labs) and the vendors market strength in other areas. Niche Players: The Niche Players segment is the largest, with most of the vendors falling into this space. Some of these niche players are SCM vendors that have leveraged their SCM experience to also offer WCM products; these typically have strong financials based on their overall business but limited WCM visibility outside of their SCM base. They need to grow their presence outside of the IS organizations and gain a reputation in the broader market. The remainder are small vendors that may have good technology but are limited by their size, product line breadth, geographic niche or financial circumstances. Some vendors have specifically chosen a niche strategy (e.g., many European vendors are maintaining a regional focus). Many vendors in this segment were started and supported by venture capital, which is now growing scarce; some of these vendors are candidates for closure or acquisition through 2002, by stronger WCM vendors or by others outside the industry such as e- commerce, portal or J2EE application server vendors. User Strategies Play Hardball: The good news for users is that WCM is becoming a buyers market as the current economic downturn slows IT investments at many enterprises. Overall, Gartner expects half of the vendors on the 2001 Magic Quadrant to disappear by 2004, through closure or acquisition by WCM or other enterprise software vendors. Portal, e-commerce and even application-server vendors are eager to acquire WCM capabilities to advertise as features, and some will go on buying sprees now that many WCM market caps have declined up to 90 percent from their peaks. Software buyers can also take advantage of this market shrinkage. The acquisition of NCompass Labs by Microsoft, a vendor that tends to bring prices down in any market it enters, along with the overall economic climate in mid-2001, are putting pressure on vendors to bring their prices down dramatically this means between one-third and two-thirds below FY2000 prices, or $75,000 to $150,000, instead of $250,000 to $400,000 for software licensing for a modest system. For enterprises with greater demands on the Web site, with application integration needs and high scalability issues, the cost for a more-complex system will be significantly higher. Typically, the implementation costs begin to become a larger multiple of software, sometimes ranging up to six or eight times software 28 August
4 license costs. Enterprises should pay particular attention to the implementation costs for these systems as this can dominate the overall cost. The trend is toward a reduction of these costs, but out of the box products may mean reduced flexibility. In addition to offering WCM products, some of the vendors in the Magic Quadrant also offer SCM products (see Figure 1). Figure 1 Web Content Management Magic Quadrant Challengers Leaders Names in italics are primarily SCM vendors that also offer WCM products Ability to Execute Microsoft (NCompass Labs) BroadVision Evaluations are from a North American perspective. Users in other areas may assess local vendors differently due to regional conditions. Interwoven Stellent Vignette Documentum Rational Serena Pironet Merant Starbase Openpages Open Market Hyperwave MKS Eprise TeleLogic RedDot Gauss Mediasurface Tridion FatWire Reef Ektron Percussion Obtree Systems Egrail Alliance Coextant Presence Hablador Wipcore Online evincio Infopark Roxen FramFab Source: Gartner Research Niche Players Visionaries Completeness of Vision As of 8/01 Bottom Line: Users should view WCM as a market under strong price pressure and ripe for consolidation. Carefully consider the financial prospects of the vendors you evaluate, since many will have trouble keeping their brands active through At the same time, buyers should seize the opportunity to negotiate hard and try to bring prices below $200,000. Buyers who demand 28 August
5 deep discounts will be more likely to get them through 2002 than they would have before mid August
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