Content Log

Content Monkey Predicts 2012

It's the last day of January, so I am not too late for predictions for the new year. Besides, it's my birthday and what a great time to predict the future. This year I am influenced by a book I received for Christmas, "Thinking Fast and Slow" by Nobel prize laureate Daniel Kahneman, from our one of investors, Accel Partners. Every year they send out a profound book to their portfolio companies and boy is this one potentially life changing.

I won't go into the book in detail, but one of the things that Kahneman, who is a psychologist and decision theorist, discusses is why experts are so bad at predicting the future. There are a few reasons including some things called the Theory-Induced Blindness, Optimistic Bias, Hindsight Bias and the Planning Fallacy among others. But put simply, experts just try to be too clever.

Kahneman referenced the 20-year study by Philip Tetlock at the University of Pennsylvania that studied 284 experts in economics and politics and 80,000 predictions. The experts were were asked to rate the probabilities of three alternative outcomes: the persistence of the status quo, more of something such as political freedom or economic growth, or less of that thing. As Kahneman states:

"The results were devastating. The experts performed worse than they would have if they had simply assigned equal probabilities to each of the three potential outcomes. In other words, people who spend their time, and earn their living, studying a particular topic produce poorer predictions than dart-throwing monkeys who would have distributed their choices evenly over the options. Even in the region they knew best, experts were not significantly better than nonspecialists."



Tania, the dart-throwing Content Monkey (attribution: Quixado on Flickr)

So there you have it, if we want to know what will happen in 2012, we need a dart-throwing Content Monkey to decide the future. All you analysts please take note, she (I asked her what sex she was) will _probably_ (and the operative word is probably) be more successful than you will be. Her name is Tania Majerus, see http://www.kleimo.com/random/name.cfm and I asked her a series of questions related to "either/or" answers or "less than, same as, more than" answers. I will add my "expert" analysis of the result, because Kahneman suggests that we humans need to think causally and will always look for a cause even when events are random. I swear these are the answers that "Tania" had generated.

Will the ECM market still exist by the end of the year?

Content Monkey says "Yes!"

I guess a market that is some $4 billion or so wouldn't disappear overnight, with a year being classified as overnight. There is some talk about it disappearing or perhaps being absorbed into the infrastructure or being merged with the social business sector. It may not be exciting, but it's still there and still very useful.

Will Mobile be the next big thing in Content Management?

Tania says "Yes!"

It's certainly early days, but with the spread of "Bring Your Own Device", users are certainly challenging IT and the organization to accommodate these mobil devices. Smart phones first and then iPads are starting to create their own demands on the usage of content. I see that OpenText has some sort of offering that bridges mobile devices to internal content management systems. It's not exactly a Cloud offering, but I can assume that other ECM vendors will follow suit.

Will Cloud be the biggest influence in Content Management?

CM says "Yes!"

I guess it is only natural to assume this given the high degree of interest in various surveys of CIOs. We have CEO saying that they "must get into the Cloud" whether they know what that means or not. Flexibility is the clear driver more than cost advantage. The largest corporations say that they can better deals on their own systems than they can from Amazon, but they can add machines on demand. The big question is whether it will be private or public clouds that will have the influence on Content Management. However, I'm not really sure what I would have said if the result was no.

Will companies start to put content into public cloud offerings?

CM says "No!"

If the answer was yes to this one, I would have rationalized this as they are doing this whether they know it or not. People are putting stuff into DropBox and Box whether the IT department and management knows it or not. Still I think we are still a bit away from resolution of a few security issues before companies consciously put content into the Cloud. An AIIM survey last year said that only 6% of corporations are even using a corporate cloud, but that 30% would consider using a public cloud in the future. This may be ignoring the informal usage on the file sharing services.

Will "Big Data" really have an impact on Content Management?

Tania says "No!"

This was one of the big predictions of Real Story Group  and Lubor Ptacek at OpenText. To be fair, Lubor said that "Big Data" in general would be the hype of the year, but that no one knows what that really means. RSG has aggregated their analyst predictions, presumably to avoid the failing pundit syndrome, and make Big Data sound like business intelligence. When I think Big Data, I think Map-Reduce and Key/Value pairs in extremely parallel processing a la Google and Hadoop. IBM sees the former as the future and I would think the latter. Still Tania says "Who care?"

Will Open Source market share in Content Management grow, remain the same or shrink?

Tania says "Grow!"

Whew! I wonder what I would have said if Tania had said shrink? I know Alfresco is growing and quite rapidly. I know that a lot of Drupal and Joomla is eating the commercial vendors lunch. But I can't comment on how other commercial vendors are doing. Still, good call Tania! Sorry, Lubor - did you consider that Cloud and Open Source go hand-in-hand and that most of the Cloud runs on Open Source?

Will EMC sell off Documentum?

CM says "Yes!"

There have been interesting rumors over the last year about Documentum. At this point, I can probably count on one hand the number of people I know who are still there. Interesting to see a number of the engineers going off to Salesforce. I had heard a rumor that SAP was considering buying without a lot of substance. I had also heard a very interesting rumor that a strategic acquisition by Autonomy that they had referenced in their earnings call where related to Documentum. That made sense prior to the HP acquisition. Now, you have to be wondering if EMC is thinking more about the potential drives they could be selling more than the prospects of their dwindling ECM brand.

Will SAP enter the ECM market?

CM says "No!"

I'm not sure if SAP would consider whether Tania is right or not. This is an adjacent market that SAP has been reselling OpenText for a while. Could they consider, once again, whether to purchase OpenText? SAP is also building out a cloud solution and CMIS is part of the cloud solution. Even so, they have said it before and will probably say it again that they are not interested in entering this market. And of course, they are using Alfresco in their enterprise.

Will HP grow, shrink or maintain the size of Autonomy?

CM says "Shrink!"

I would consider encouraging Tania to throw this dart again. When you go to the autonomy.com website, it hardly seems like anything is different. That would call for at least a "Maintain". I can see Meg Whitman investing in the service, but she could consider undoing yet another decision of the hapless Leo Apotheke. Autonomy's cloud offering has been somewhat murky from the financial analysts' perspective in terms of what it actually constitutes. However, it may add a bit of Cloud pizazz to HP's line up and it's not likely given the sunk costs of acquisition. Still Kahneman in the book suggests that sunk costs should not be considered in any rational economic decision and that companies are usually very good at removing CEOs who use "mental accounting" to avoid losing sunk costs. Meg's job is to avoid that mental accounting.

Will we see more consolidation in Content Management?

Tania says "No!"

There has been a lot over the last 10 years and perhaps we are seeing an equilibrium of the old guard of enterprise software. This prediction may fly in the face of a Documentum sell-off. I could also see OpenText folding into a larger software portfolio. But monkey says...

Will SharePoint market share in Content Management grow, shrink or remain the same?

Tania says "Shrink!"

Sorry, I can't see this and I can't explain it away. Sure, growth will slow and the Microsoft brand being tarnished by some bad handling of consumer products. But Microsoft Office is still the main game in office software for a long time to come and it's going to be natural for Microsoft to hook in SharePoint as part of the deal as well as SharePoint driving Office sales.

Will OpenText's market share grow, shrink or remain the same?

CM says "Shrink!"

I am going to be accused of being biased of even acknowledging this answer. I personally say "Remain", but we'll see.

Will those anti-Documentum ads that Oracle are producing actually work?

CM says "Yes!"

These ads really piss me off. Sure we compete against Documentum as well, but I can tell you that 8-Track tapes were well and truly dead when we started Documentum. Kids these days probably think we were all living in black and white and called each other "Man!" And can you tell me that Stellent's architecture is really that more advanced than Documentum when they were started within 5 years of each other 20 years ago. Anybody could get great results if they use an Exadata. Just give us a machine and we'll show you.

Updated Bonus Question: Will 2012 be the Year of CMIS?

Monkey says "Yes!"

I guess I have been taking CMIS for granted, otherwise why wouldn't I have asked this question in the first place. It has come a long way over the last several years. Apache Chemistry has made it possible for so many to implement it and Chemistry also means that the lighter weight JSON bindings (think brower plug-ins or mobile apps) can connect so much easier. As the Cloud becomes more important, what better standard to have to connect to content than one that was designed for that purpose and has so many systems like SharePoint, FileNet and OpenText supporting it.

Finally

My final prediction, is my personal one, which is these predictions will beat the others that are out there and that they will have around a 50/50 chance of being accurate at the end. Unfortunately, I won't be able to take credit.

 

HP's Board: What were they thinking?!

What are they thinking? HP buying Autonomy! It took everybody by surprise, probably because it isn't the most logical of moves in today's industry. The last rumor I heard connected to Autonomy was nearly a year ago that they were considering buying the Documentum (or should I say "Intelligent Information") division of EMC. But HP giving up on mobile and the PC business to go into search, content management, customer engagement and a much bigger, fuzzier information management realm? 

As a product strategy it could have been kind of interesting. Get out of the commodity PC and device business, concentrate on servers and build competitive advantage on the software of the most valuable assets on those servers. It's really too bad they didn't think through the whole Palm acquisition before starting this, but it could have been disruptive. However, this acquisition makes no sense on a lot of different levels. There are three things that will make this impossible - personalities, dis-economies of scale, and trying to do this in a post-technology market.

First, the personalities. I could just about imagine Mark Hurd making this work, maybe. However, Leo Apotheker? Did the HP board not realize why Leo was "asked to leave" SAP after a little under a year and a half in the sole CEO job. Perhaps they attributed it to a fatal flaw in the Hasso Plattner-dominated SAP organization. In reality, he was demotivating the whole organization with unclear direction. He was a competent technocrat elevated beyond his abilities in one of software's most demanding leadership positions. Hardly the leadership needed to integrate and realign a major Silicon Valley legend. In addition, his actions in relation to lawsuits from Oracle. Is run and hide really a strategy? Compare this with the decisive way that Larry Page has handled lawsuits against Google. On top of this swing from we are in mobile and now we are in only in servers, can we really discern vision. What are you going to think if you own HP hardware, HP software or Autonomy software? Is this guy going to stick with it? 

Best defense is to run and hide? An enthusiastic receptionist at Oracle shared this with me last year.

The other personality is Mike Lynch, or Doctor Lynch as he apparently insists on being called by staff. Mike is an extremely intelligent man and has steered Autonomy well through the economic downturn. Creating the largest British tech company, he should be an inspiration to all of us British software companies. He brilliantly positioned the mathematical musings of an 18th Century British theologian, Dr. Thomas Bayes, and turned it into the branding of a must have piece of software. Software that was originally designed to detect submarines. Simply brilliant marketing! However, the man can be very difficult. My colleague John Powell and I met with Mike Lynch ostensibly to OEM some software from Autonomy. What we got was an hour lecture on information management and then finally toward the end he explained that IDOL was everything we needed without listening to our requirements. Autonomy's sales guy saw us out at the end of the meeting and apologized. We didn't really see much reason to proceed. 

"Call me the Doctor." Michael Lynch: photo CIO Magazine.

Combine these two personalities and how will the two work? Will Lynch subordinate himself to Apotheker? Will Lynch take over? And how can you swing a giant supertanker of a company like HP in an entirely new direction quick enough? Not only are you jettisoning whole product lines, but you are putting existing and future integrated products into an uncertain future. HP as a hardware company has not exactly distinguished itself in software. EMC actually acquitted itself in software after the Documentum acquisition by the sheer charisma and software sales/marketing expertise of Dave DeWalt. Although both Apotheker and Lynch have tons of software experience, their leadership styles and personalities seem misaligned with the realities of try to change the direction of HP. 

HP, with its large size, organization and bureaucracy, will not be able change quickly for all the reasons of "Innovator's Dilemma", "Competitive Strategy", "Innovation and Entrepreneurship" and all those other business books that say it just isn't going to happen. This isn't Larry Ellison or Bill Gates saying "Just do it!" These are both interlopers interfering with a Silicon Valley institution. At this scale, you aren't going to get new solutions that combine the best of both HP hardware and Autonomy software to create magical new software for the Cloud. Despite Autonomy's claims that it does 30% of its business in the Cloud, that business is actually.... It is not clear that anyone is using or even capable of using the IDOL suite as part of SaaS solution. Is the vision to just take same old hardware and same old software and host it in a farm somewhere. Now is the time for innovation for new solutions that deal with the coming privacy, security and scale issues. However, that is likely to be done by new startups. Perhaps the HP of old could have done it. Not this one.

Is this the Exxon Valdez or HP changing course?

Finally, IDOL (Information Data Operating Layer) is a complex concept and it is the basis for the potential new range of server-based offerings. It is also the basis for Autonomy's cloud offering, supposedly the reason why HP is buying Autonomy. As Nick Patience notes in the 451 report, it's not super clear what Autonomy's cloud offering is, how much of the business it really represents and how big a growth factor it is. Is it "IDOL Cloud", is it Zantaz SaaS, is it some other offering that allows HP to play in the new Cloud world?

Complex concepts don't sell well now. We are in a post-technology world where people are going to ask what are you doing for me. HP/Autonomy can start going on about Bayesian distributions et al. However, what HP/Autonomy will get from customers is: does it work on my iPad and does it work with Google. Playing a full stack game against IBM and Oracle is a hard defensive or offensive move with a confusing message.

I love Cringely's thoughts written back in February on who is going to take over this mess. But maybe he's wrong and maybe Mike Lynch will get the job. If you go by the Wall Street Journal's Al Lewis, he's just going to kill the company.