$ 10.3 B to buy Autonomy, offering a 64% premium over the current market price to shareholders, that is a hefty investment in an enterprise search and information access company – even for an HP trying to demonstrate a dramatic shift in strategy, away from low-margin PC business to higher margin software and services. This transaction confirms the creation of a new market, that of Business Search, which helps users make sense of business data, structured (databases, business application) and unstructured (emails, documents, files, audio, video, etc.).
You may object that this is not a new but a mature market having been created more than 10 years ago. Some analysts will agree to this, considering the search market as a commodity with a few specialized niches. Of course, search has been around for quite some time, and without Google, the Web would have choked on information overload quite some time ago. But enterprise search has been slow in finding its true place within organizations, its main usage having been confined to Web or intranet sites and some enterprise content management – commoditized usages indeed.
The new search market, highlighted by the Autonomy deal and HP’s (very) high expectation of future profits, is in the use of search for core business functions. Search has finally entered the core of organizations’ IT systems. Of course, this type of search usage is often tied to business applications, causing people to speak of Search Based Applications, even though they are rather “search enhanced” applications. We call this type of usage “Business Search”, since search is used to enhance business functions.
A search enabled information management market is on its way
Autonomy is today no longer seen as a pure enterprise search company. But a lot of its products integrate IDOL-technology. Global Search has always been an underlying vision of Autonomy. It drove its past acquisition roadmap to enhance a “simple” enterprise search portal with additional business functionality (like discovery, web content management, call center, etc.) This market of enterprise search, search enhanced applications, and true search based applications (making use of search and the search index to create applications of a new kind) is the “new search market” or “search enabled information management market” in which HP is putting so much faith.
At Sinequa we are very pleased about this evolution of the market. It confirms our experience with recent large projects. It would have been difficult for us to call our experience a “trend”, but we are now absolutely convinced that this trend to strategic projects with business search as a core component does exist. Points in case are large projects at Crédit Agricole, GDF, SFR, Siemens, Total, etc.
It has been difficult to define this new market, since “search” was linked to the old commoditized market, and Search Based Applications could mean everything and nothing. Hence our profession has tried to come up with the description of business cases for search usage, without really succeeding in clearly defining a market. This caused one of the big market analyst companies to accuse us all of “over-intellectualizing what search can do”. Maybe HP will succeed in doing a better job of defining the new business search market. After all, there is a lot at stake for them.