Information Age: News, analysis & insight for IT & business leaders

A 'shoot-out' in the enterprise content management (ECM) market is just beginning, says Lee Roberts, chief executive of software supplier FileNet. Unsurprisingly, he thinks his company is well-positioned to be the victor in that battle.

His bold statement may not simply be senior management bravado. Figures released by IT market research company IDC in December 2004 place FileNet as "the ECM market share leader", based on 2003 licence and maintenance revenue of $251.3 million, ahead of rivals IBM, Open Text, EMC Documentum and Vignette.

And IDC analyst Joshua Duhl echoes Roberts' belief that the ECM market is about to explode into life. "After an 18 month period of technology acquisitions, the content management market is starting to settle into a new era of expansion and growth," he says. "Competition will continue to be fierce for increased market share, but great opportunities for sales of new products to the installed base will fuel growth across the entire market."

Roberts, meanwhile, likens the ECM sector to the database market fifteen years ago - with those that have survived massive consolidation sharing the spoils. "The opportunity is huge," he says, "and you can tell that because, right now, the figures don't quite add up."

By this, he means that the database software market is worth some $10 billion per year, compared to $2 billion for ECM. "But companies hold around four times more unstructured data [that needs to be managed through ECM] than structured data [that they hold in databases]." That, he says, points to a largely untapped market for ECM software.

To further demonstrate the opportunity, research suggests that over the next several years, around 70% to 80% of the Global 5,000 largest companies will standardise on a single, end-to-end ECM platform to serve the content management needs of the entire organisation.

This ECM platform will run on top of a standardised operating system and application server, as part of a software content management infrastructure stack. Roberts estimates that fewer than 3% of large global companies have decided which system to use.

Most large companies have typically deployed several packages (or so-called 'point solutions') from different vendors to tackle various ECM challenges, such as document management, web content management and records management.

FileNet's proposal to customers is bold: consolidate around one platform - FileNet's P8 - a sophisticated ECM platform that supports multiple applications across a large organisation. The result of $300 million in R&D, it includes not just document and content management, but important emerging areas, such as email management. "We are taking a gamble on P8, but I believe it's a gamble that will pay off," says Roberts.

"We're starting to see proof of that every quarter as we announce major transactions worth $10 million-plus with individual companies." These companies, he adds, are making a "standard platform choice".

While big P8 customers attract strategic attention, there is a second important strand to FileNet's expansion plan: provide more products, and build out an end-to-end vision, for its existing 4,200 customers, says David Yockelson, of IT market analysts the Meta Group.

One way FileNet is attempting to do that is business process management (BPM). BPM's architecture acknowledges that various business processes (for example, taking a customer order) touch different, often standalone information systems scattered throughout organisations (such as accounting, customer relationship management and inventory management). FileNet's BPM software integrates these separate elements into single, end-to-end processes.

Leveraging its document management pedigree, FileNet has been relatively successful in selling products to companies with a document-centric environment, where many tasks in a specific business process involve users across different departments reviewing unstructured content. According to estimates from IT market research company, AMR Research, around 800 of those 4,200 customers use the FileNet BPM product, generating between $25 million and $35 million annually, or 7% to 10% of its revenue.

BPM has provided FileNet with another opportunity: BPM analytics software can provide reports and queries that show how a particular business process is running and where bottlenecks occur. In many ways, this is comparable to the business activity monitoring (BAM) software that integration suppliers are developing. FileNet, says Roberts, is already discussing with BI vendors how that technology might work, and may even bring out its own analytics package "in the next three to five years".

For now, FileNet's strategy is clearly mapped out: sell high-end software to high-end companies, preferably with tens of thousands of users, and make sure that that the software is so complete that they do not need the help of niche specialists to fill any gaps in ECM function.

If companies are prepared to entrust all their content management companies to a single enterprise platform - and that is a big 'if' - then FileNet is likely to carve out a significant chunk of that 'exploding' market for itself.