UK tech firms eye opportunity in content revolution

When enterprise content management systems emerged in the 1990s, they promised to bring order to the chaotic fashion in which employees consumed, shared and collaborated on content, especially documents.

That promise led to a wave of investment, and ECM platforms now serve as giant filing systems for many large organisations.

However, the environment in which employees interact with content is changing. Documents are produced using applications in the cloud; they are shared with cloud-based consumer services such as Dropbox; and they are accessed on mobile devices not based on the once-ubiquitous Windows platform.

As in all segments of user-facing software, these changes have opened up a crack of opportunity for smaller suppliers to sell tools built for the new era. And while this shift is by no means being ignored by Silicon Valley, at least three UK-based companies are vying to capitalise from it.

Even aside from the recent resurgence in UK technology investment, there is one reason that this country might be well placed in a content management revolution. The services sector, which accounts for around 75% of the UK’s economic output, produces, shares and consumes a lot of content.

As John Newton, CTO of open source ECM vendor Alfresco, puts it, “The British economy is content-driven.”

Huddle up

Founded in 2006, London-based start-up Huddle styles itself as a cloud-hosted, content collaboration platform provider.

“If you have a group of people working on a bunch of content, and they are going backwards and forwards collaborating on that content, then Huddle is the system for you,” explains CEO Alastair Mitchell, in the company’s office overlooking Old Street’s so-called Silicon Roundabout. “And that’s what 90% of people in most organisations do.”

As Mitchell tells it, CIOs are in a thorny position when it comes to content management. “CIOs have two massive challenges on their hands,” he says. “One is that they’re getting low adoption of their existing ECM systems, even though they’re spending a lot of money on maintaining them. 

“The other problem is that they’ve got an influx of consumer, ‘bring your own device’ technology, which they are scared stiff about. And with good reason: they’re not secure; they are not controlled.

“CIOs are losing control of their information.”

Huddle offers relief from both these issues, he claims, by creating a cloud-based, mobile-friendly repository of documents, that allows employees to comment and collaborate on those documents through a familiar, ‘consumerised’ user interface.

Around a third of Huddle’s 100,000-plus customers are replacing or have replaced Microsoft SharePoint, the dominant content collaboration software in the marketplace. Another third are using it as an adjunct to their existing ECM investments, while the remaining third are using it as their first real ECM repository.

A rarity among its Tech City neighbours, Huddle is aiming squarely at the enterprise market. “Half of our business is with organisations of between 100 and 2,500 users, and the other half is 2,500 and up,” Mitchell says.

Total sales are set to triple this year, he claims, and enterprise revenues are expected to grow by 800%.

Huddle has found favour in the government market – it is the best-selling cloud service on the UK government’s G-Cloud programme. Mitchell attributes this to the company’s focus on security: this year it achieved ISO 27001 certification, denoting management oversight of its information security practices.

In September, it received the endorsement of In-Q-Tel, the US government’s technology investment division. “Typically, governments get to use technology after everyone else, because they have such high security requirements,” Mitchell explains. “What In-Q-Tel does is find solutions in the market, invest in those solutions and bring them to government, with customers attached.”

In-Q-Tel has made an investment in Huddle, and lined up a number of US government departments that will adopt the service. This will be, Mitchell says, one of its largest customer engagements “from the get go”.

“This is a very major deal. The US government is the biggest IT spender in the world, and the biggest SharePoint customer,” he says. “In terms of moving from an early-stage business to a major software player, this is a major step in that journey.“

Mitchell positions Huddle as a disruptor of the ECM status quo, but Huddle has its own disruptive threats. In February, the company launched Huddle Sync, a cloud-based file sharing option comparable to Dropbox or, more precisely, ‘enterprise Dropbox’ start-up

But armed with a $24 million investment round earlier this year, Mitchell’s ambition is unbowed. He believes that 70% to 80% of the ECM market will eventually move to the cloud, and he aims to be one of the principal beneficiaries.

“We are just at the beginning of a huge wave,” he says.

NEXT >>> Alfresco aims to bridge the cloud

Page 2 of 3

John Newton was one of the co-founders of Documentum, a big beast of the ECM market that was acquired by storage giant EMC in 2003.

US-born Newton moved to the UK in 1995. Ten years later, he co-founded Alfresco, an ECM software company that follows the ‘commercial open source model’ pioneered by the likes of Red Hat and MySQL. Today, the Maidenhead-based company is a $50 million-a-year business, and grew around 50% last year.

Born in the on-premise era, Alfresco is now seeking to offer customers a way to retain control, process and governance over content in the face of rapid cloud uptake.

For the most part, businesses want to keep their content on-premise, Newton argues. “For compliance, for corporate processes, for collaboration between departments, it still makes sense to have about 80% of content inside the firewall.”

There are, however, some unavoidable forces pulling content into the cloud. One of these is, which is increasingly used as a repository for sales documents such as requests for proposal (RFPs) and contracts.

But these documents still need to conform to compliance regulations, process workflows and other controls usually implemented by an ECM system, Newton says. “So your choice is either to leave it up in the cloud, or you can create a very complicated architecture of VPNs and connections from into the ECM system,” he says. “It can be done, but the number of organisations that can or are willing to do that is very limited.”

The other force pulling content into the cloud is Dropbox, and similar cloud-based consumer file synchronisation services. The sheer convenience of these services mean that employees are almost certain to be using them to share files between devices and with their colleagues. However, this prevents the IT department from controlling who gets access to what – something that many companies are obliged to do by law.

The company’s solution to both of these issues is Alfresco One, which is essentially a hybrid cloud deployment of its ECM offering. The bulk of the content is stored in an on-premise instance, with pre-built integrations to and other software-as-a-service applications.

“This means that your legal department can take contracts from and work on them, or your product department can add answers to RFPs,” Newton says. “Then they can go back into without losing any of the context or metadata from the whole process.”

Alfresco One also includes an instance of the ECM software hosted on Amazon Web Services. This allows Dropbox-like syncing functionality, Newton claims, while still enabling the IT department to set permissions for certain files and folders.

Thirdly, it supports mobile access to content stored in the ECM repository, whether through native apps or through a web browser.

It is a diverse, distributed solution, but one that Newton says matches the diverse, distributed nature of content creation and collaboration in 2012.

He adds that the imperatives that led to the creation of the ECM industry in the first place – the need for governance, control, process and reusability of content – cannot be sacrificed just because there are new computing models.

“There’s no going back to the days when you just put everything on the shared drive,” he says. 

NEXT >>> Workshare merges with offshoot SkyDox

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In 1999, UK technology entrepreneur Barry Hadfield co-founded WorkShare, a provider of client-server document comparison software. The tool is used, primarily by law firms and professional services companies, to track changes in contracts and documents as colleagues refine and develop them collaboratively.

Over the years, Workshare added policy management functionality, allowing companies to control who could access those documents, and metadata-stripping features, so a company could be sure that all notes and change-tracking information was stripped from a document before it was shared with, for example, a client.

Today, Workshare’s comparison tool has around 1.8 million users (although more than half are using it after their support contracts have lapsed).

In 2008, Hadfield left Workshare to set up SkyDox, a content-sharing and collaboration platform vendor, headquartered in London. Unlike Workshare, SkyDox is primarily a cloud-based tool, although the company allows customers to deploy it on their private infrastructure as well.

In September, Workshare and SkyDox announced that they were to merge. Boosted by a £20 million investment from Scottish Equity Partners and the Business Growth Fund, the combined company will be known as Workshare, and will have SkyDox CEO Anthony Foy as its chief executive.

By combining the cloud-based nature of SkyDox with the content collaboration features of WorkShare, the new company will find itself in competition with Huddle and, to a lesser extent, ECM suppliers such as Alfresco as it moves into the cloud space.

Foy says the company will compete on functionality. “One key differentiator is the web interface, which knows what you looked at the last time you used the system,” he says. “So you will only see the changes that are taking place since the last time you accessed that document.

“The second key differentiator is the ability to apply policy,” he adds. “We can now say, if anyone accesses this document, put a click-through NDA on top of it, or we may want to allow them to comment on the document but not download it.

“And one thing that really separates us from most is that we’re not trying to replace SharePoint,” Foy says. “We view the investment that companies have made into their [content] management systems as what allows us to exist.”

Despite this last point, Workshare will nevertheless be competing with SharePoint and other enterprise content and document management systems for the investment of its potential customers.

But perhaps more importantly, the likes of Huddle, Alfresco and Workshare will also have to compete with consumer services such as Dropbox for the attention and engagement of employees. This gives them an incentive to make sure their tools are as usable as possible – something that the enterprise ECM suppliers, despite their multimillion-pound price tags, were never under much pressure to do.

This is one facet of consumerisation for which CIOs should be thankful.

Pete Swabey

Pete Swabey

Pete was Editor of Information Age and head of technology research for Vitesse Media plc from 2005 to 2013, before moving on to be Senior Editor and then Editorial Director at The Economist Intelligence...

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