Search Product and Company Update 2H2008

Surprisingly Successful Second Half Caps Economic Challenge of 2008

April 16, 2009

Our second half recap shows customer activity remains strong, on a par with 2H 2007; product releases continue at the usual pace; but hiring has slowed, there has been more change in executive management, and more packaged solutions are being offered.


This report recaps results at the companies on our search vendor watch list. Customer appetite for search technology was fairly strong in the face of slowing world economies. Our clients continue to seek our help with findability, site search, intranet and portal search, and content management.

The vendors covered in our last recap report did quite well during 1H 2008. They have done approximately as well this half (at least those that were willing to participate in this review). They acquired and upgraded customers at roughly the same rate as in the first half of the year. Considering the world recession, this is an impressive performance.

Vendor statements about revenue growth and average deal sizes were about the same this period.

Hiring continues, but the growth spurt of the last two years has slowed. The days of 20+ percent headcount growth are gone, at least for now. Hiring now is, for the most part, for skills replacement or rebalancing, with the exception of empolis and Coveo. As of April, all but three of the vendors have jobs listed on their sites, and two of those are hiring.

Management changes picked up pace, with four companies making three or more changes in the executive ranks: Celebros, Coveo, ISYS, and Mark Logic.

One of the vendors on our list, Mercado, went into receivership in October and its assets were acquired by Omniture.

My best guess for the difficult economic year to come is that very targeted solutions will be the only successful offerings. Top on that list is ecommerce search, followed by anything that makes sales teams more effective (mobile search, CRM search) and cover-your-backside applications (governance and ediscovery). Recession is not infrastructure time, so platform bids will have a tough time.

A Current Snapshot for Search Vendors

We’ve compiled a review of second-half 2008 activity from 17 of the search vendors on our watch list. Our review includes customer wins and repeat business with existing customers as reported by each of the vendors, product announcements, structural changes, and financial results where available. Autonomy, IBM, Google, Microsoft, and Omniture are public companies, and provide audited results. None of the revenue results from the other vendors presented in this report have third-party verification. Our snapshot also highlights trends and key events. For trends, we look at continuing improvements in the products and growth in customer bases, as well as hiring. For key events, we identify those occur-rences that could have a significant impact on search technologies, applications, and the market landscape. For example, an acquisition is a key event, as are new players and services emerging into the market.

Recap of Suppliers and Products

Not all the vendors we follow are included in this report, as several companies decline the pleasure of participating. I could cynically assume they have mediocre news to report, but I don’t think that’s the case. Most who decline just don’t like to share: the scrutiny is counter to their culture...


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