Is Autonomy the Undisputed Heavy Weight Champion?

I spent the first segment of my career (please note that I didn’t use the word half as it is just too depressing) in the enterprise software market competing against Oracle with a variety of startups and early stage organizations and fielded a few consulting organizations that relied on non-Oracle database systems (e.g. Microsoft SQL).  I am citing this history as experience to draw an analogy between the early days of “dealing with” the market perception of  Oracle to the current phenomena of the market considering Autonomy as the undisputed heavy weight champion of  the enterprise search and content management world for eDiscovery and Governance, Risk and Compliance (GRC).

And, as with the crowing of any champion, there are supporters and detractors on both sides spewing innuendo, have truths, unsubstantiated case studies, etc.  Its almost as exciting as a national election or the World Cup (well maybe not the World Cup).
As an example, in a July 12, 2010 Blog post by Stephen Arnold titled, “Autonomy: A Real Success. CMSWatch: Maybe Another Real Miss?”,  Mr.  Arnold takes exception to a Blog post from the CMSWatch Blog by Tony Byrne.  Both of these posts are excellent as they “stir the Autonomy pot” and therefore I will include them at the end of my post.  However, I think that, given Mr. Arnold’s agnostic nature, it is interesting that he seems to an advocate for Autonomy.

Mr. Arnold states that Autonomy is on track to hit $1.0 billion by the end of calendar 2010. The company has a proven track record of improving the performance of the companies it acquires. Autonomy’s management has demonstrated its ability to integrate quickly its acquired products with IDOL (the firm’s integrated data operating layer). The result is Autonomy’s knack of transforming the acquired companies’ position in their markets.
He goes on to state that there are other data that shed light on Autonomy’s track record, which I have documented Autonomy’s technology in my writings such as Beyond Search (Gilbane, 2009), the Enterprise Search Report (CMSWatch.com, 2004-2006), and Successful Enterprise Search Management (Galatea, 2009). Here are three points that must not be overlooked:

  1. Autonomy has 20,000 plus customers plus around 1,000 licensees of its technologies for use in other enterprise software and systems
  2. Autonomy has made intelligent acquisitions that has given the firm a strong presence in eDiscovery, rich media, and fraud detection. Autonomy has recently pushed into online marketing using capabilities from Ineterwoven and its IDOL framework. My research reveals that Autonomy has acquired companies to bring its technology to new markets so more content can be understood.
  3. Autonomy has grown its revenues and generated a profit, making it possible for other UK based technology companies to ride the Autonomy horse in the race for government and venture funding.

I am not going to dispute any of Mr. Arnold’s statements as that is not the point of my post (please note that later on I will dispute the fact that all of Autonomy’s clients are happy).  I am just using these posts as proof that the same arguments that I heard about Oracle are now beginning to surface about Autonomy.  Let’s list a few of them:

  1. Oracle/Autonomy has so many clients and licenses that why would a prospect even consider another vendor?
  2. Oracle/Autonomy has acquired all of the best new technologies on the market so why would a prospect even consider another vendor?
  3. Oracle / Autonomy management is so obviously smarter than anyone else in the market and therefore why would a prospect even consider another vendor?

The market bought into this “line of thinking” and the Oracle sales teams perpetuated the myths and used it to their advantage.  In fact, I can remember prospects telling me that they really liked my Oracle “knock off” (their words not mine) and understood the technological superiority of my product and understood and appreciated the TOC and ROI arguments that I had developed.  But, in the end,  and as communicated to them by the Oracle sales executive, even if Oracle turned out to be the wrong decision for all the reasons that I had sighted, they wouldn’t have to worry about losing their job if they went with Oracle and therefore that is what they were going to do.    At an even more frustrating level, I can sight prospect after prospect that spent the better part of a great lunch meeting railing against Oracle and then after the check came and was paid, indicated that they were unfortunately going to buy another round of Oracle licenses.

Don’t take my stories as “sour grapes” as I did in fact have my fair share of  success selling against Oracle.  And, don’t forget that at one point, the standard Oracle line in the industry was “What in the heck does Microsoft know about building databases?”  We all know the answer to that question (well, maybe not everyone).  The point being that technology vendors like Oracle and now maybe Autonomy think that they can reach a point of being too big to fail and so big and stable that it would be crazy to even consider alternative solutions.

Well,  the technology highway is riddled with the wreckage of companies and technologies that thought that they owned a marketplace and then one day a couple of “guys in a garage” proved them wrong.   Please note that I am not underestimating what Autonomy has done, the insightful intelligence of their founders,  their market share,  their momentum , their marketing budget or the their massive sales force. Nor am I overestimating the value of new ‘garage based” and superior technology.  I am merely stating that, just like we all saw with competition infringing upon the coronation of Oracle, we may also have the opportunity to witness some amount of legitimate competition taking market share away from Autonomy.

Now as promised, some thoughts on the “happiness” of  Autonomy users.  Mr. Arnold states in another of his pieces on Autonomy that based on research by IDC, “If the data compiled for the report are accurate, Autonomy has a big footprint and happy customers. Among the thousands of Autonomy licensees are AOL, BAE Systems, BBC, Bloomberg, Boeing, Citigroup, Coca Cola, Daimler AG, Deutsche Bank, DLA Piper, Ericsson, FedEx, Ford, GlaxoSmithKline, Lloyds TSB, NASA, Nestle, the New York Stock Exchange, Reuters, Shell, Tesco, T-Mobile, the U.S. Department of Energy, the U.S. Department of Homeland Security and the U.S. Securities and Exchange Commission”.

Once again, I am not going to dispute what Mr. Arnold and IDC are saying.  However, I am going to offer an opinion and state some unscientific anecdotes that I have.  First of all, as with Oracle, many of the Fortune 500 have a license or two of just about everything available on the market and therefore it would not seem unusual for any of the organizations stated to have a copy of Autonomy software.

Second,  enterprise buyers are very politically savvy by nature and therefore one they make a decision to purchase something like Oracle or Autonomy, it would not be within their “political nature” to indicate publically they had made a poor decision.

Now, for the unscientific anecdotes.  I spent a good portion of just about every “working” day of my career talking with Fortune 2000 business line, IT and Legal Users about their needs (pain), past successes, past failure and plans for future purchases and “nirvana“ solutions.  Obviously, Autonomy has come up a time or two. And, without fail, the main themes that I have heard from Autonomy users are; (1) they don’t much like the proprietary nature of IDOL; (2) they think that it is too expensive; (3) Autonomy over promised under performed; (4) the integration of the acquired technologies didn’t seem to be working very well,  and;  (5) they were concerned that Autonomy had gotten so big and unwieldy that it (Autonomy) would have a very hard time being innovative in the future.  And, with the goal of full disclosure, I would have to say that, just as was the case with many Oracle clients that I talked to, most of the Autonomy users had plans to purchase additional licenses.

In summary, I am actually very impressed with what Mike Lynch has done and would not argue that they in fact be the undisputed heavy weight champion of the search and content management market.  However, I would also caution both current and potential users to not overestimate Autonomy’s ability to keep pace and no underestimate the power of the free market and its ability to nurture new search and content management technology support healthy competition.

After all , who would have ever thought that we would be using our iPhones or iTouches for eDiscovery (http://www.marketwire.com/press-release/iClearwell-Sets-Standard-as-First-E-Discovery-Companion-Application-iPhone-iPad-1288443.htm).

The full text of Mr. Arnold excellent Blog post is a follows:

In Harrod’s Creek, I can easily spot the real squirrel hunters. They have food. Mostly laconic, these hunters have a big pile of dead squirrels as proof of their competence. There is also the smell of fresh burgoo wafting from their log cabins. I can smell ability from my goose pond.

Lousy hunters have empty gun belts and squirrels shot when snacking on store bought food used to lure the critters. That’s a real danger — cheap tricks or just shooting wildly, often putting bird shot in an innocent’s backsides or the face like the 2006 incident between Vice President Dick Cheney and Texas lawyer Harry Whittington. Some faux hunters have just shot themselves in the foot. Ouch!

Azure chip consultants is a synonym for “bad hunter” in my opinion. Source: http://api.ning.com/files/LCP2NCaWo-ptCqGncB3hGsX8vuh8dnDzSJ0iLnkibas_/18holeinhandG.jpg

One of my two or three readers sent me a link to a write up called “Don’t Ogle Search If You Really Want Content Management”. In my opinion, the write up relies on insinuation, not facts. (I think that some folks are immune to facts, but I find facts useful.) In the article’s headline, the word “ogle”, for example, is one I don’t associate with information retrieval. (The publisher of this “ogle” opinion piece caught my attention in July 2008 with its similar assault on Attivio. My response to that misleading article is here.)

Yet another example of factless criticism of a vendor appears in this segment of the “ogle” write up about Autonomy, one of a very small number of search and content processing vendors with a consistent track record of technical breadth, sales, revenue, and profit:

From an initial focus on enterprise search tools, Autonomy has become a roll-up vendor after acquiring a variety of other information management suppliers such as Interwoven. As a financial strategy this can be successful, and investors seem to cotton to Autonomy. As a technology strategy, vendor roll-ups are problematic. Autonomy’s technology strategy is to rip legacy search subsystems from acquired products, replace them with some pieces from its own IDOL toolset, and then promote its particular approach to search as a distinct advantage for you. Specifically, Autonomy will try to sell you on the value of “meaning-based computing.” Even if you can get your mind around what meaning-based means, you should remain skeptical that Autonomy has technically spectacular or original services here. More importantly, you risk getting sidetracked from your original goal of, say, creating a user-friendly repository for your 50,000 Office documents.

These statements are presented without verifiable foundation to support the allegations in my opinion.

Autonomy is on track to hit $1.0 billion by the end of calendar 2010. The company has a proven track record of improving the performance of the companies it acquires. Autonomy’s management has demonstrated its ability to integrate quickly its acquired products with IDOL (the firm’s integrated data operating layer). The result is Autonomy’s knack of transforming the acquired companies’ position in their markets.

But there are other data that shed light on Autonomy’s track record, which I have documented Autonomy’s technology in my writings such as Beyond Search (Gilbane, 2009), the Enterprise Search Report (CMSWatch.com, 2004-2006), and Successful Enterprise Search Management (Galatea, 2009). Here are three points that must not be overlooked:

1.Autonomy has 20,000 plus customers plus around 1,000 licensees of its technologies for use in other enterprise software and systems
2.Autonomy has made intelligent acquisitions that has given the firm a strong presence in eDiscovery, rich media, and fraud detection. Autonomy has recently pushed into online marketing using capabilities from Ineterwoven and its IDOL framework. My research reveals that Autonomy has acquired companies to bring its technology to new markets so more content can be understood.
3.Autonomy has grown its revenues and generated a profit, making it possible for other UK based technology companies to ride the Autonomy horse in the race for government and venture funding.

In December a year or so ago, at the International Online Conference, in my for-fee, end note debate, I challenged Andrew Kanter (Autonomy), Charlie Hull (Lemur Consulting), and Dr. Charles Oppenheim (Loughborough University) about their views of search, content processing, and related fields. In front of an audience of about 300 search professionals, I pointed out that key word search was dead. I pointed out that most search systems did not understand the meaning of processed information. Autonomy’s Andrew Kanter strongly and politely disagreed with me. As I recall, he said to the audience and me:

Autonomy IDOL is the only product in the market that can understand the meaning and concepts of all information in any language, including audio and video. This has big implications for the content management market as no other vendor can do this.

I demanded some concrete examples to support his position. Mr. Kanter without missing a beat gave me four concrete examples drawn from Autonomy’s work in intelligence, search enabled applications, fraud detection, and rich media.

What did I do?

I listened, considered the evidence, and I conceded defeat. Facts convinced me.

Despite the proliferation of marketing baloney, facts about search and content processing are more important than insinuations and unsubstantiated generalizations. There is no excuse for any one to venture into a technical jungle without adequate preparation and forethought. Take a short cut at Booz, Allen & Hamilton, and you would have bene fired when Dr. William P. Sommers ran the the firm’s Technology Management Group. Furthermore, unsubstantiated assertions are the method of some high school journalists and third tier consultants in my opinion.

As readers of this blog know, I am no fan boy of any search and content processing vendor. Spend 15 minutes with me, and you will learn that I can and will point out fact-based strengths and weakness of the companies I monitor. (For a list of the firms I track, navigate to this link.) MBA double-talk and half-baked arguments create confusion. Verbal wild firing brings little benefit to those trying to understand the complexities of digital information.

Autonomy is on track to hit $1.0 billion by the end of calendar 2010. The firm has been able to acquire firms that add to Autonomy’s customer base and extend Autonomy’s meaning-based technology to new markets. Its Zantaz acquisition expanded Autonomy’s footprint in eDiscovery, boosted Autonomy’s position in cloud computing, and was a spark that set off a wave of activity in the eDiscovery and online archiving sector. That’s how you kill real squirrels. Take aim. Bang. New revenue.

In the search and content processing market, Autonomy has been a leader in marketing and on target acquisitions. In my opinion, OpenText (the Canadian company competing with Autonomy in some enterprise markets) has had to follow Autonomy in a “me-too” fashion in an effort to try to keep pace.

For me, Autonomy continues to grow in a landscape littered with failures. The more important question is, “Why isn’t Autonomy like Delphes, Entopia, Fast Search & Transfer, InQuire, Siderean, STAIRS III, and many other search vendors which have run aground?

There will be no answers in an analysis which lacks facts and insight.

And there is another important question, “Why shoot wildly at Autonomy?”

I don’t know. Grandstanding like squirrel hunters with an automatic rifle and a bag of walnuts? Fun? Frustration with life, business, or traffic to the company Web site? A need to differentiate one’s business from a farrow of third-tier consultants?

My hunch is that some “experts” see an opportunity to make money by appointing themselves mavens or satraps in search and content processing. Grabbing for a brass ring from a carousel pony seems harmless enough. The logic could run like this: I use Google. Google makes search easy. Therefore, search is easy.

What better way to get sales leads than to make unsubstantiated claims about a company that in terms of customers, financial performances, and scope is arguably one of the world’s leading vendors in information retrieval and processing?

Anyone looking at search market facts should be able to figure out that unsubstantiated assertions have zero impact on a billion dollar enterprise. Wild shots and tricks call attention to the hunter, not the prey. And what is the point of the “ogle” write up in my opinion: Marketing hoo-hah or a need for attention?

I don’t know the difference between slander and libel. I will leave that to legal eagles.

I do know that Autonomy has happy customers. Autonomy has hundreds of OEM deals that continue from year to year. Sue Feldman, IDC’s search expert, recent analysis of Autonomy was fact-based and positive. Also, I know that Autonomy is growing. What some search dilettantes do not appreciate is that search start ups in the UK have a better shot at getting funding due to the uplift from Autonomy’s success.

And there is the matter of profits.

Outfits like Goldman Sachs and other market makers pay attention to companies that make money. With your job on the line in a search procurement, would you go with a struggling vendor or with an outfit that was a market leader?

Does Autonomy have weaknesses?

What software vendor doesn’t? My Overflight service had a glitch on July 7, 2010. My goslings had to troubleshoot a mistake I made in a script. Software is difficult to make perfect. You can ask Google how the Buzz code is working out. Why not chase down Microsoft and ask about the Kin? If you have a moment, get Larry Ellison on the line and ask, “How is SES11g working out for you?”

To sum up: Constructive criticism based on solid technical understanding and demonstrable evidence delivers real value. Here in Harrod’s Creek, when I want burgoo I seek out the real hunters who hit their target without resorting to unsportsmanlike tricks. You may want to avoid the faux hunters who take short cuts, sport Travel Smith vests, and glittering generalities.

About Charles Skamser
Charles Skamser is an internationally recognized technology sales, marketing and product management leader with over 25 years of experience in Information Governance, eDiscovery, Machine Learning, Computer Assisted Analytics, Cloud Computing, Big Data Analytics, IT Automation and ITOA. Charles is the founder and Senior Analyst for eDiscovery Solutions Group, a global provider of information management consulting, market intelligence and advisory services specializing in information governance, eDiscovery, Big Data analytics and cloud computing solutions. Previously, Charles served in various executive roles with disruptive technology start ups and well known industry technology providers. Charles is a prolific author and a regular speaker on the technology that the Global 2000 require to manage the accelerating increase in Electronically Stored Information (ESI). Charles holds a BA in Political Science and Economics from Macalester College.