Midmarket Digital Asset Management Firms Disappearing

The Digital Asset Management and Media Asset Management marketplace has split into a low end and high end, resulting in a dearth of midmarket solutions, according to recent research conducted by CMS Watch, a Boston-based independent analyst firm.

Mergers and acquisitions of smaller DAM firms by enterprise-level corporations resulted in a shift in focus for many former SMB (small to medium-size businesses) targeted companies. “Various midsize companies were swallowed up by large players who focused on the enterprise market,” says Kas Thomas, CMS Watch analyst and co-author of the report “The Digital & Media Asset Management Report 2009”.

The study found small team/workgroup-style DAM tools can be purchased for $2,000-$5,000, while the enterprise-class DAM & MAM tools are rarely purchasable for less than $150,000-$200,000. Thomas says that for the midmarket business owner looking to grow, many DAM solutions don’t have the scalability SMB owners need. “Small to midsize businesses are often growing, from -S’ to -M’, and when you do that, you gain headcount, you gain hierarchy, you gain process,” he says. “All of these things involve difficult problems that are just harder for smaller DAM firms to address.”

Scalability in DAM and MAM should be a critical issue for small business owners, Thomas says. The claims midmarket-targeted vendors make, along with the enterprise-level vendors who claim they offer a scaled down solution, complicates the process of deciding on a vendor. “All the smaller vendors are going to say they scale, or just plain tell you they’ve got APIs (Application Programming Interfaces) you need that aren’t already in the box,” Thomas says. “But the larger players have a story, too; -We’ll sell you a scaled down version’-but that translates into is a huge cost. Once you get into it and find out your integration pricing, or if you end up buying modules, pretty soon your $30,000 solution is up to $150,000.”

One thing small businesses should evaluate when deciding on a DAM vendor is workflow requirements. “If you have simple serial approval processes, you’re fine,” he says. “But if you need anything more than that, like routing something through six people, or need special escalation procedures, are just absent in most of these DAM systems.”

Another area to assess critically is scalability. “If your corpus size doubles and your headcount doubles, or you need to add more servers, is this system going to be able to handle it?” he asks. “This is a very difficult problem and some of these systems just don’t scale very well.”

Overpricing is another issue confronting SMBs looking for a robust solution, according to CMS Watch’s principal DAM analyst, Theresa Regli. “We often find that buyers end up spending 20-30 percent more than they’re initially quoted, because of additional, separately priced modules. As we detail in our research, additional modules can cost more than the base software, and the cost quickly creeps upwards.”
The situation is a serious problem for buyers who need more from their DAM system than a simple digital archive, but don’t have six-figure budgets. There are some options out there for SMBs, however. Berlin-based Canto, which also has a San Francisco office, offers a solution called Cumulus that midmarket companies can turn to, Thomas says.

Widen, based in Madison, Wisc., markets MediaCollective, an online DAM system. Minneapolis, Minn.-based MediaBeacon offers what Thomas calls a “fairly elaborate” Web-based DAM solution. “That’s at the higher end of the midmarket,” he says. “But it works just great in many SMB systems right out of the box, and you really can build out with it.”