aiimALERT: Microsoft Takes FAST Track to Search Market

Microsoft Corp has offered to buy search software company Fast Search & Transfer for about $1.2 billion, the companies. Microsoft and FAST will hold a telephone conference to discuss the offer today at 1815 GMT. (See details )

This event is sure to shake up the enterprise search market.  But will it be the final earthquake?  The search market has always seen platform players such as Microsoft and Oracle make forays into search.  The appeal of these offerings has always been lower cost and integration into applications, leaving a market for higher end dedicated search functionality providers.  Dedicated search providers, such as FAST as well as Autonomy, Endeca and Vivisimo, to name a few, remained viable and healthy solution providers by offering state-of-the-industry search functionality.  Organizations that required substantial, independent search functionality continued to represent a fertile market for these high-end search tools. 

The likely acquisition of one of these leading search vendors (FAST), by a major platform player (Microsoft), changes the rules of that game.  The high-end functionality and expertise of FAST, coupled with the market reach of Microsoft is greatly complementary.  “This acquisition gives FAST an exciting way to spread our cutting-edge search technologies and innovations to more and more organizations across the world,” said John Lervik, CEO of FAST. “By joining Microsoft, we can benefit from the momentum behind the SharePoint business productivity platform to really empower a broader set of users through Microsoft’s strong sales and marketing network.”  Lervik certainly got that right.  (It is a shame he was not as insightful earlier this year, when he commented "We are diappointed with [our] numbers", earlier this year, in a move that certainly helped precipitate this bid.) On the other hand, Microsoft will also greatly benefit in making its SharePoint platform far more attractive, and can likely extend the search capability of “its FAST” across all Microsoft applications, rendering a virtual universal search platform.

While all search technology providers are affected by this probable acquisition, Google is perhaps the most impacted. Google has been making strategic and powerful plays into the enterprise search space, leveraging their popularity on the Internet into an enterprise search tool.  Market popularity and familiarity have greatly helped in this cause.  If anyone can claim equal name recognition in the general market, it is Microsoft, albeit not with search – until today.

This of course changes the value proposition of ECM providers that have positioned themselves as Sharepoint enhancing - including OpenText and Documentum.  Their window of differentiation continues to close.  I cannot help but wonder at which point Microsoft will find themselves back in antitrust court?

Should AIIM Market Intelligence scrap its plans for a Market IQ report on Findability in Q2 2008?  Is the subject moot?  Perhaps in the long term, but short term, this should make for a most exciting competitive market space.