Enterprise Content Management Market Braces for Growth in 2013
Tools like instant messaging and business social networking, the maturity of startup firms that are saddled with an unmanageable level of data and content, and increased interest from firms in China, India, and Central and South America, will push the enterprise content management (ECM) market to double-digit growth in 2013, according to industry analysts.
In its report Bracing for More ECM Growth, The Radicati Group, Inc., of Palo Alto assesses the ECM market - those solutions that help businesses manage information from creation to disposition, and at all points in between - and its expected evolution over the next four years. According to the firm, the market will grow from $4.4 billion in 2012 to over $7.5 billion in 2016, representing an annual growth rate of 15 percent.
Radicati isn't the only research firm that's bullish on the ECM market. In an unrelated report, Frost & Sullivan predicted that the sector will reach about $7.92 billion (up from $2.75 billion in 2011) by 2017. "Across the board, the consensus is that the ECM market will post double-digit growth (of less than 20 percent) over the next few years," says Robert Nelson, a long-time Enterprise Content Management (ECM) expert and a practice director for Dayton, Oh.-based Crown Partners.
Technology to the Rescue
Microsoft SharePoint stands as a nearly universal option for firms that need to add basic ECM capabilities to their repertoires. And while Microsoft Dynamics is capable of storing static documents and "attaching a contract document to a record in Dynamics," Nelson says such systems are basically just filing cabinets. Firms that want to capture customer communication and/or content (such as digital messaging), for example, need bolt-on ECM solutions to achieve their goals.
"Any ERP - Dynamics included - will need an add-on solution that can serve as an all-in-one repository or a specific integration point," says Nelson, who sees SharePoint as a good choice for Dynamics users who not only want to store information, but also associate with specific customer and/or transaction records. "Add business social networking, instant messaging, or other Web 2.0 communications to the mix, however, and a more robust, add-on ECM solution becomes necessary."
Take the wholesale distributor of HVAC equipment, for example. It's the kind of business that traditionally relied on strong relationships with local contractors and a lot of phone calls and faxes. But that low-tech business environment evolved over the last few years as contractors equipped themselves with smart phones, computer tablets, and other mobile tools. Now those same customers use MMS text to send product photos to the distributor in hopes that a similar item is sitting on the shelf, and relying on the web, text, and instant messaging to place orders.
To be most efficient and effective, the distributor must capture that information, associate it with a specific customer record in Dynamics, and then be able to review it at a later date. That's where an add-on ECM comes into play. "The distributor who is using Dynamics is suddenly in a position where it needs a content management application to go along with that ERP," says Nelson, "in order to support all of the different channels and communication methods that customers are using."
Driving the Market
Other ECM market drivers include increased interest from companies located in China, India, and Central and South America. "Traditionally, ECM was used mainly in Europe, the U.S., Japan, Australia, and some parts of the Middle East," Nelson says. "Now we're seeing more interest from the rest of the world as firms face the same content management issues that current ECM users grappled with."
The fact that social networking has "grown up" and now includes a business component is also driving ECM growth, as are the myriad companies that are maturing into seasoned firms that can no longer handle content with an application like Dropbox or Google Drive. The latter represents about 25 percent of the growth in the ECM market, says Nelson, with the remaining 75 percent driven by the international growth and the increasing number of communication channels that companies are using.