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The content market has seen its share of consolidation during the last year, with notable firms NCompass Labs, Open Market, and Eprise all being gobbled up through acquisition. Financial problems have staggered other vendors in the space, turning the once stable market segment into a territory fraught with concerns of stability.
Last year's fourth quarter helped clarify the financial picture in content management, indicating which companies are executing and which ones are failing to evolve with the shifting marketplace. That shift is shaking the sector to its core, bringing into question the very nature and definition of content management.
Most of the vendors in the space today built their infrastructure based on a document-management model, which is generally defined as a school of applications designed to manage static Web content with varying levels of automation.
Document management is an immensely important tool, and it remains one of the core components of a company's Web initiative. Today, however, manufacturers are discovering that in addition to document-management capability, they need to maintain the content that works behind the scenes to actually run applications.
"There's sort of a fork in the road for content management," says Mark Fasciano, president and CEO of FatWire, Mineola, N.Y. "You've got the simple, page-asset and document-management tracking, and then the other fork in the road is being able to bake in the dynamic content management into applications.
"Supporting content management for pages is much simpler than dealing with the dynamic-content management that needs to be coordinated and integrated with the presentation, the logic, and the content layers that go into applications."
FatWire is part of a new breed of content-management vendors that has really brought to the forefront the separation of data content from its actual presentation on the Web. Veteran providers in the space have been forced to respond to companies' new requirements for content management, and so far they've done so with mixed results.
For example, Documentum, Pleasanton, Calif., has aggressively shifted its business model with the changing market drivers. The same day it announced a 25% increase in sequential revenue, Documentum acquired Boxcar Software, adding content aggregation and distribution capability to its offering.
The Boxcar acquisition followed Documentum's December purchase of Bulldog Technology, a specialist in digital asset management. The deals indicate that content management will likely experience a shakeout in favor of organic growth, and the Documentum moves specifically exhibit an understanding for the new role of content management in e-business.
Stellent, Eden Prairie, Minn., is another vendor that actually managed to thrive economically through most of last year by focusing on the translation of unstructured data into application-centric content management. Generally lacking in mindshare compared to competitors Documentum and Interwoven, Sunnyvale, Calif., Stellent grew more than any other content firm last year.
By contrast, Vignette, Austin, Texas, a longstanding powerhouse in the space, saw revenues decline sharply every quarter last year in succession.
Louis Columbus, an analyst with AMR Research Inc., Boston, Mass., indicates that while reluctance on the part of end users to sign large deals was primarily responsible for Vignette?s fourth-quarter operating loss, the company has yet to fully transition its product and positioning strategies in response to the dramatic shift occurring today in content management.