Microsofts Driving Into a New Race
Microsoft has long been expected to enter the content management space once occupied by some high-flying companies but now populated mostly by has-beens. Its not that the space is bad; its just that there are fewer companies and less need for software to handle tracking content and customers. A lot of horrible installation stories, missed payments and overall customer dissatisfaction didnt help, either.
Microsoft is going to change all that with the purchase of NCompass Labsat least thats what Microsoft officials are saying. Microsoft has been making some waves with content management for yearsevolving FrontPage into something more than just a content-creation package and beefing up Commerce Server and SharePoint. The entire .Net initiative would seem to embrace this market. But Microsoft in the past relied on partners to do the actual management of the content, which by far is the potentially more lucrative business.
As far as purchases go, the acquisition of NCompass is pretty small$36 million for an entire company with about 150 customers, even if some of them include Texaco and Verizon. Apparently, these were really small, department-size installations.
Imagine if content management king Vignette, with its multimillion- dollar implementation fees, had 150 more customers, each paying millions of dollars. The company wouldnt have lost several million this quarter and been forced to lay off what amounts to the entire staff of NCompass. Vignette and Microsoft obviously are in completely different segments of the market.
Microsoft, interestingly, firmly believes that it is going to be a full-fledged competitor to Vignette as well as to Interwoven and BroadVision. It seems to me that this is not unlike a Honda del Sol-driving chump who thinks he can take on the racers in the Indianapolis 500.
Microsoft is also still partners with Vignette and Interwoven, but I suspect that these relationships became strained when Vignette struck some deals with Sun, and Interwoven struck some more with IBM. The strain must have become unbearable when Interwoven and Vignette pursued a Java-centric attitude and only supported Windows NT and Windows 2000 with a nonstrategic, cover-the-bases attitude.
"They werent taking advantage of some of Microsofts innovations," a Microsoft official said. Clearly, this is because most vendors cant support two-pronged development efforts and need to pick the one they think is most strategic. It wasnt Microsoft.
NCompass Labs is different. It offers completely Windows-centric products, and it focuses on time to deployment. In other words, it fits right into Microsofts mold. Now the question is whether it fits into ours.