Monday, August 07, 2006
80-20 Formula and ECM
The 80/20 rule is one of the most consistent (though baffling as to why it is consistent) formulas in existence. In ECM we have always looked at the 80% unstructured vs 20% structured data split. But that is a bastardization of the formula which is really more along the lines of 80% revenues to 20% of the players type deal.
Its been the case for some years now that the top 10 vendors take well over 80% of the ECM revenues, but it seems that even more consolidation is on the way. It is still not totally clear who is going to win the battle for Hummingbird, but OpenText appear to have the deal in hand at present. Of course I am biased toward OpenText as they are a fellow ECM firm with I believe a lot of synergies. But we/I do need to remember that Hummingbird is more than and ECM firm, with other product groups such as connectivity to think of. We shall see what happens there, but rumour has it that there are at least 2 other acquistions in the works elsewhere, so the consolidation continues.
But as the consolidation continues, I think it opens the doors for many more to enter. The big enterprise who have huge volumes of seats and complex workflow requirements will always typically go to the market leaders, but the success of open source WCM products shows us that there is still a vibrant sub market (much as Wired Editor Chris Anderson portrays in his Long Tail book) that is both profitable and sustainable, a sub market that is based on specialization to niches and sub niches.
However the issue with ECM is that everyone currently wants to be a suite vendor - and in the world of suites highly specialized vertical offerings are difficult to deliver and continue over time to support. What seems to be happening now is that the OS WCM model is starting to happen in more document and record centric tools (though to a smaller degree as this is a much more mature area), and its a trend I hope continues. However the market dynamics for document centric solutions is very different from Web Centric tools so quite how it will work out is a guess as much as anything.
Side note on Bangalore
Sometimes its the little things that really make an impact on you. The big things do to - like driving past the outdoor market each day and looking at the amazing mountains of bananas and oranges on display, alongside the vibrant flower garlands ready for the Lakshmi festival. But the little things hit you deeper at times.
We drove past lots of shops of course, and the thing that is most noticable is that even though open for business they often don't have their lights on. And never have their lights on if there are no customers inside the shop. Likewise if a scotter or motorbike is stopped even for a minute or so in a traffic jam the rider will turn the key and switch the machine off. I even noticed Apoorv do this in his car whilst on the way to lunch. In the week I counted 7 occasions when the electricity failed - and on a few occasions it seemed to me that I was the only one who noticed, everyone just carried on with whatever else till the back up kicked in.
Whether people consciously realize it or not, in India there is a recognition that power (be it gas or electricity) is a precious commodity - that it enhances life but is not neccesary for life.
How very different to our wasteful ways in the West - I have been stuck for 30mins plus regularly on my drive into Boston and cannot even start to imagine what abuse would be hurled at me were I to turn off the engine at each extended pause in the journey. I suspect if I did it two or three times in a row whilst plodding down Route 3, the police would pull me over.
You can look at this two ways - the people don't earn as much and the power supply is unreliable in India. Or alternatively (my way of viewing it) in India they have a more realistic and sensible attitude to precious resources and one that we may have to adopt sooner rather than later, whether we like it or not.