Having already weathered a significant degree of consolidation in the past three years, the Documents and Records Management market is braced for further and more radical change. The explosion of content generated and consumed within enterprises is driving this growth, rekindling the interest of software vendors and service providers alike in entering this post-consolidation market.
After a spate of consolidation in the last three to four years, the Documents and Records Management (DRM) market is now in the midst of post-consolidation blues. Most leading vendors support multiple platforms and product lines within their DRM portfolios and are yet to come to terms with unified product strategies. The technology landscape is largely flat, with little to differentiate between major vendors in terms of product capabilities. As much as this paints a picture of transformation well in progress, shifting enterprise priorities are forcing another wave of change; possibly a second round of acquisitions and entry of a newer breed of players into the market.
DRM solutions, traditionally employed for compliance and retention purposes, are evolving to address the larger content management needs of the enterprise. As the workplace paradigm moves towards employee collaboration through multiple channels, such as shared documents and workspaces, features like collaborative document and email frameworks, and support for instant messaging environments are becoming standard. Also figuring high on the DRM technology integration list are workflow and business process management capabilities, such as business rules engine, process modeling and role support.
The prevalence of multiple DRM solutions with similar technology capabilities is making it difficult for users to differentiate between various vendors. An analysis of responses from a recent Datamonitor survey of 300 CIOs and IT managers reveals that enterprise priorities are shifting in favor of service capabilities as far as DRM selection decisions are concerned. Decision makers rated service quality and customer support quality as the two most important decision attributes after product quality.
The current post-consolidation phase in the DRM space is likely to further drive end-user focus on service attributes over technical factors, such as portfolio depth and vertical specialization. As end-users increasingly begin to favor service capabilities, the DRM market will become more competitive, with the entry of new vendors from content and application services backgrounds. For example, UK-based IT services provider Morse entered the DRM market via its acquisition of Diagonal Solutions, and HP entered the market earlier this year through its acquisition of Australia-based Tower Software.
The market for content services such as document capture and processing is experiencing accelerated growth. Consequently, the value proposition for services vendors such as Xerox and Canon in entering the DRM applications space is rising. This trend looks set to continue, with many independent DRM vendors likely targets for acquisition in the near term.
As a result of the recent consolidation activity in the market, the technology landscape has been steadily flattening, with little or no difference between major vendors in terms of product functionality or capability. This trend will progress into the next couple of years, with smaller and niche players set to catch up with their larger counterparts, in terms of offering a similar set of DRM capabilities. Despite the growing competition and the prospect of new market entrants, current leaders EMC and IBM are expected to remain the top choices for IT decision makers.