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Do Not Let Consolidation Claim Your Web Content Management Vendor

Thursday, May 31, 2001

Press release from the issuing company

5/31/01 According to the Gartner Group, as eBusiness Technologies (eBT), formerly Inso, prepares to cease operations, the Web content management (WCM) market continues to consolidate rapidly. Gartner believes that the number of vendors will soon fall by half. On 23 May 2001, eBT announced plans to liquidate its assets and to distribute the proceeds to shareholders. Shareholders must approve the plan and will vote to decide in August 2001. The action comes after disappointing results in fiscal 1Q02, ended 30 April 2001. The company posted net revenue of $1.1 million in fiscal 1Q02, compared with $3.9 million net revenue from continuing operations in 1Q01. First Take A combination of internal problems and market conditions has caused the demise of eBT, which began as part of information-exchange vendor Inso. In 1998 Inso began to run into financial and organizational difficulties. It had to restate almost a year's worth of financial reports. Top executives left. The company restructured into two divisions and spun off the information exchange arm in April 2000. The other half, eBT, worked to restore customer confidence. The company still has many customers for its DynaBase Web publishing software and has been gaining customers for engenda, the product's next generation. However, almost as soon as eBT sorted out its internal problems, the WCM market began consolidating rapidly with the result that the market has too many WCM technologies. Inevitably, some will disappear, and the lack of backing from a viable vendor places DynaBase and engenda at particular risk. Gartner recommends that eBT customers begin the process of finding another vendor's product to migrate to as eBT's best efforts may not be enough to secure DynaBase's future with another firm. This announcement continues the WCM consolidation that began in late 2000. By 2H02, only 50 percent of the WCM vendors operating today will remain independent (0.7 probability). The bursting of the dot-com bubble and the slowdown in the U.S. economy in 4Q00 have taken their toll on all WCM vendors. The dot-coms, with their Web-based focus, formed a natural source of customers that has dried up for WCM vendors. Unfortunately, other sectors have not correspondingly increased their purchases of WCM products to fill the gap, and many potential users of WCM products have become increasingly cost-conscious and risk-averse. Microsoft's plan to enter the market will only hasten the collapse in WCM pricing . Enterprises should look for the following characteristics in a WCM vendor, which indicate long-term viability: * To maintain credibility with partners and ensure an ongoing revenue stream, WCM vendors should have at least 200 customers by mid-2002. * Strong partnerships can bolster WCM sales by adding functions or enabling integration into another platform. * Vendors must control service costs and reduce implementation time. Enterprises typically spend twice as much on related services as on the WCM software itself. * Listening to customers and ensuring quality — both before and after the sale — will become critical by at least 2002 as product functions become increasingly commoditized. Enterprises should demand service-level agreements from their WCM vendor, with payments coming in stages as the vendor meets service milestones.

 

 

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