posted 18 Apr 2005 in Volume 8 Issue 7
Trend tracker: Search market
By Angela Ashenden of Ovum
The wait for fourth-quarter and end-of-year financial results in the enterprise-search market brought with it an unusually high level of suspense this year, as market observers waited to see whether up-and-coming Norwegian vendor Fast Search and Transfer (FAST) would overtake Autonomy in terms of revenues. The verdict was split: while FAST managed to pull ahead of Autonomy for the second quarter in a row, bringing in $20.4m compared to Autonomy’s $18.6m, Autonomy managed to keep hold of its second-placed position behind Verity for the full year – just. The difference between FAST and Autonomy was only $1.3m, indicating that Autonomy has some significant work to do to maintain second position over the year to come.
While leaderboard changes spark interest in any market, this is particularly interesting because of the rate at which FAST has reached this point in the enterprise-search market. For a company that did not make any significant revenues from search software until 2001, FAST has demonstrated impressive growth over the past three years, with a compound annual growth rate of 36 per cent. The company attributes much of this growth to its OEM strategy, which was assisted by the release of FAST InStream in September 2004, a product specifically designed to be embedded in both structured and unstructured applications.
From a European perspective, FAST’s position is another shining example of a non-US software vendor achieving success in the international market. Over 55 per cent of FAST’s revenues came from the US in 2003, with around 35 per cent from
The enterprise-search market has seen a lot of activity over the past year, with total licence revenues growing to $475m, and the market-share leaderboard seeing a reshuffle as companies such as Convera and Microsoft lost ground to the likes of Google and Endeca. Google, for instance, has shown itself to be one of the most significant drivers in the market at present, as demonstrated by the amount of publicity generated by its stated intentions to strongly target the enterprise-search market. Combined with the flurry of interest around desktop search – and the impact this will have on the enterprise – Google has truly made its presence felt over the past six months.
Alongside FAST and Google, the rising star has to be Endeca, which announced 100-per-cent year-on-year revenue growth in 2004, following 65-per-cent growth in 2003. Still a private company, Endeca has achieved what many small vendors have failed to do – reach the top five in terms of market share without the boost of a public listing.
The current growth and activity within this market is refreshing, and opens up new opportunities for smaller players. It will be interesting to see how leaders Autonomy and Verity respond over the next 12 months as they look to reaffirm their positions in the market.