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Gartner Magic Quadrant: Efficiency driving ECM software, market growth

Gartner’s annual Magic Quadrant for enterprise content management (ECM) shows spending on ECM software grew in 2009 and 2010, mainly because of the productivity gains the technology can provide.

While many information technology departments have been feeling the pressure to cut budgets as a result of the recent recession, enterprise content management (ECM) spending actually grew. In fact, it’s expected ECM will experience a compound growth rate of 11.4% through 2015, according to the latest Gartner Magic Quadrant for ECM software.

The annual Magic Quadrant report said that spending on ECM software increased by 5.1% in 2009 and by 7.6% in 2010, mainly because of the productivity gains the technology provided. The report from Stamford, Conn.-based IT research firm Gartner Inc. says ECM technology drives process efficiency and data quality and can help users build better channels to their customers.

“In the last six weeks I’ve been on four continents, and this stuff is being adopted in countries we’ve never heard from before, such as those in Africa and the Middle East,” said Mark R. Gilbert, the Magic Quadrant’s primary author. “We’re seeing the technology move into geographies where it was not as affordable a few years ago or companies hadn’t reached the maturity level of using it.”

The report, which ranks ECM software vendors as niche players, visionaries, challengers or leaders, groups together four major vendors -- EMC, IBM, Microsoft and Oracle -- as controlling almost half the revenue of the current ECM market. But the report is also quick to point out that change is driven from the edges. That means the smaller vendors in the visionaries and niche-player segments will help shape the market in the future.

Gartner added Norway-based ECM vendor Software Innovation to the quadrant this year as a niche player.

“They crossed from being a little fish that we’ve heard of a few times to crossing the financial threshold,” Gilbert said. “Plus, we started hearing about them from clients asking about their offerings.”

To be included in the Magic Quadrant, vendors must earn at least $10 million in revenue annually and meet certain geographical criteria. Software Innovation is said to specialize in ECM from a composite content application perspective. In other words, it has a front end that can deal with many types of business-related content, can work with a number of different processes and includes applications that companies will use for either very specific ECM strategies or across multiple channels.

U.S.-based Autonomy was dropped from consideration this year because, the report said, it was not promoting any products as ECM. “We had been taking fewer and fewer calls from clients about them as an ECM provider,” Gilbert said. “They are trying to … position themselves differently.”

The Magic Quadrant sees most of the action ahead coming from cloud deployments of ECM, deployments for mobile capabilities in a “post-PC era,” content analytics tools in ECM systems and the ability to leverage consumer file formats like audio and video and other “big content” within ECM products.

Four worlds of ECM
According to the report, ECM can be divided into four “use scenarios,” and while few vendors lead the market in all four, many span them and almost all relate to content management as a platform of related applications.

One of those divisions is identified as transactional content management, which refers to products that focus on imaging, workflow, compliance issues and records management. Content handled by such products tends to be static. Gartner says that enterprises interested in such capabilities should look at applications for invoice automation and other business-specific tasks when choosing a vendor. Among the providers in this realm are EMC, Hyland Software, IBM, OpenText, Perceptive Software and Saperion.

Another use case for ECM software centers on social content management. This group of capabilities includes such things as library services, collaboration, workflow automation, wikis and blogs, task tracking and version control. These types of applications optimize the processes involved in long-running development projects and are provided by vendors such as Alfresco, IBM, Microsoft and OpenText.

The third group of ECM use scenarios is called online channel optimization, meaning products that focus on capabilities such as Web content management, digital asset management, portals, electronic forms, content analytics, social media, collaboration, support for mobile devices and other related resources. “Most important in delivering value will be a focus on relevancy … and the impact of the delivered experience,” the report states. It lists Adobe, OpenText and Oracle as vendors representative of those with such online abilities.

Finally, Gartner reviewed content management as infrastructure and names IBM, Microsoft and Oracle as vendors increasingly embedding content management capabilities in their platforms. Features like the means to manage rich metadata, migrations from servers or other networks, full lifecycle control and bringing some analytics or business intelligence capabilities to unstructured content are essential among this group, Gilbert said.

ECM technology has changed in recent years, moving toward products with improvements in suite functionality, process controls, ease of use and a focus on records. As a result, Gartner suggests that “organizations with ECM technologies more than five years old, or with multiple products across departments and geographies, [re-evaluate] their content architecture with a view to possible consolidation of functionality and vendors.”

As to the future, added Gilbert, “It won’t be that long before content management systems have to support speech-recognition platforms. … Probably in three or four years, that’s going to be expected functionality.”

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