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Four types of vendor are emerging in the ECM market – survivors, innovators, gorillas and open-source champions

Once upon a time, it was all about the paperless office. Now, the enterprise content management (ECM) sector encompasses a broad range of systems loosely connected by the promise to – finally – render an organisation’s information into a searchable, manageable, usable and compliant condition.

But the sheer quantity of data flowing into and through the enterprise environment, an amount growing by 60% every year, has left the ECM field so wide that no single vendor can possibly cover the territory.

Integration and legacy application nightmares aside, this has resulted in a chaotic array of small to medium-sized companies competing for their slice of the $2.9 billion (£1.47 billion) sector under the shadow of major industry players consolidating their positions after a spate of acquisitions.

And then there is Microsoft. Having explored the market with a near free version in 2003, the software giant last year stepped firmly into the crowded ECM arena with SharePoint 2007 – an intuitive browser-based collaboration tool scalable from team to enterprise level – which has undercut most of the competition in terms of price and carved itself a large slice of the market for basic content services (BCS).

Doug Miles, managing director of AIIM (the international association of ECM companies) describes the arrival of the new SharePoint as “the biggest thing to hit our industry in 2007”.

He says: “[SharePoint] 2003 had discrete apps and little integration with Outlook. With SharePoint 2007, users are moving from an Office to a SharePoint environment, often without even knowing it.”

Key to SharePoint’s success, he believes, has been its accessibility to end users. “Users have day jobs. They don’t want to become experts in ECM,” he says.

His opinion is echoed in the observations of many ECM implementers, who report users ingeniously bypassing expensive, corporate ECM products in favour of simpler, more familiar tools.

Ease of use is certainly a major factor, but the key to SharePoint’s shake-up of the industry is its accessibility to IT. Any organisation with a Windows Server Client Access Licence (CAL) already has Windows SharePoint Services (WSS), saving IT from having to build an ROI case and source budget for a major ECM infrastructure roll-out. This in turn essentially extracts greater value from an existing investment.

Fewer choices

Across the wider market, ECM is undergoing the kind of consolidation common to most maturing markets. Gartner’s latest ’Magic Quadrant’ for the industry suggests that the recent ’me-too’ spate of acquisitions among large vendors – including Oracle’s purchase of Stellent, IBM’s acquisition of FileNet, EMC’s Documentum buy-out and Open Text’s merger with Hummingbird – will mean “fewer choices for end-users and less opportunity for innovation”.

However, if anything, the opposite seems to be occurring. Larger vendors such as Interwoven, with the resources to do so, are trying to innovate their way ahead of the pack by boosting functionality in areas such as analytics, while mid-tier vendors such as Hyland Software are escaping the SharePoint onslaught by focusing on specialist areas such as finance and healthcare.

The grand doyen of document management, Xerox, makes a good windsock for the future of the industry. Traditionally strong in capture and document preparation technologies, and photocopying hardware, Xerox plays in the content management market with DocuShare. But the company believes that the real dollars lie elsewhere – in the enterprise document services market.

Lastly come the new talent of the ECM sector: open source innovators and companies like Alfresco and Nuxeo. Among the players prepared to stand up directly to SharePoint, Alfresco is led by some of ECM’s founding veterans and has already secured a surprising assortment of high-profile adopters, ranging from games-makers and major investment banks to government agencies. Theirs is likely to be a battle over the future of the software model as much as one about content management.