Microsoft's decision earlier this week to buy Norwegian-based FAST Search & Transfer business for US$1.2 billion (about £600 million in sterling) has produced some interesting reactions from other suppliers in the enterprise search arena. And 'no' this FAST is in no way connected to the FAST that is part of the IRIS group…

According to David Haucke, the global marketing VP at ISYS Search Software: “Where does this leave FAST customers, both old and new?  Through first-hand knowledge and its conversations with customers, prospects, partners and industry observers, ISYS is well aware of the implementation difficulties companies have had with both Microsoft Office SharePoint Server 2007 (MOSS) and FAST's own technology. While we don't believe in a magic pill when it comes to these types of solutions, we also don't feel customers should have to invest countless months, resources and money on something that should begin earning a return almost immediately.

“The combination of MOSS and FAST has the potential for real integration headaches. Unless Microsoft can slot FAST's technology into MOSS and offer it up to customers as a turnkey solution without the need for additional integration overhead, this deal could mean double the implementation time or worse. And more importantly for customers, how will Microsoft price this combined solution?  Based on our knowledge of FAST's pricing, customers can expect a starting price of $250k to $300k.

“Microsoft is already spinning this deal as a net win for the customer, claiming the combined technology will give customers a single solution that covers the gamut of search needs. ISYS politely disagrees with this assertion, as these search needs also include a facility for out-of-the-box yet advanced functionality, something that doesnít appear to be in the cards for the combined Microsoft/FAST solution. 

“The deal itself is not a surprise. Platform vendors have been making these types of acquisitions for a couple of years now, with Oracle serving as one of the early movers with its acquisition of TripleHop. But how does it affect the enterprise search market as a whole?  The mid-market should continue unaffected, as it will take months for the two companies to merge, and the resulting product will likely be too aggressive (both in costs and implementation timeframes) for most mid-market needs. As such, we believe ISYS remains well suited to serve its broad base of mid-market customers, and news such as this only further highlights the need for powerful yet affordable enterprise search. ISYS has been successfully selling mid-market enterprise search solutions for nearly 20 years now, primarily because we've never strayed from customer demand for easy-to-use, cost-effective technology.

“The high-end pure-play vendors stand to lose the most by the continued movement among platform vendors.  The fear, uncertainty and doubt this news creates will likely stall large-scale deals, spelling trouble for a handful of vendors. Despite its success and growth, Autonomy is now in a precarious position, and one has to question how long the company can continue on its own.  Others making large bets in this end of the market include Endeca, Vivisimo (sold into the legal sector as part of the Interwoven offering) and Recommind. These vendors, too, will have to look deep into their crystal balls to determine how viable they will remain, as platform vendors generate more inroads in the high end. When you consider that vendors like IBM and Microsoft already have armies of professional services, it appears clear that room at the top is quite crowded, with little air to breathe for those without the resources to compete.”

Meanwhile Craig Carpenter at Recommind had this to say “This is a hugely significant announcement for both companies, and the software market in general, confirming that sophisticated search and information management is an absolutely central to today's enterprise strategy. However, it certainly lays bare the positioning Microsoft previously gave with respect to its 'high-end' MOSS search. You don't pay $1.2B to shore up your high-end search business unless your product actually isn't close to what the market demands.
 
“As for FAST, a 40%+ premium over its current stock price is nice in the short term, but Autonomy (for one) would never have agreed to this, as it is a pittance compared to what they could make in a marketplace that is still growing at 30% a year. FAST has also been getting squeezed out of many deals by vendors with particularly compelling offerings in certain spaces, such asRecommind with professional service firms. In other words, clearly FAST was concerned about its ability to compete long-term with more progressive search vendors.
 
“This announcement also demonstrates the importance and value of more customised search applications (for eDiscovery, for BI, for expertise location etc). People are beginning to realise that features such as automated document and email categorisation, plus compliance and forensics functionalities, are critical elements in next generation search and this transaction will help expedite that education process.
 
“This announcement will provide a significant short term opportunity to convert FAST customers, an opportunity primarily for the major search pure plays like Autonomy, Endeca, Zylab and Recommind. At the same time, it will also likely lead to further consolidation in the high-end search world, as other major vendors (Oracle, IBM, SAP, HP, EMC, CA etc) won't want to be left behind with search that is – or was – good enough (as Microsoft's had been).”