Vendors, analyst ponder Microsoft's enterprise search play

Microsoft's recent announcement of a pair of enterprise search products came as the market is at a "tipping point," in the words of one spokesman.

Microsoft clearly believes there is a major opportunity, with company officials saying that about 6 million US businesses don't use enterprise search products.

Microsoft's new products, Search Server 2008 and Search Server Express 2008, follow releases from Google and IBM, and are based on technology from Microsoft Office SharePoint Server 2007. The Express edition, now in a release candidate stage, can be downloaded free. Feature-wise, it is similar to the commercial version, but users are restricted to a single installation. Both will be generally available in the first half of 2008, according to Microsoft. The company has not released pricing information, but stressed it will be competitive.

The question now is what other vendors stand to lose if Microsoft gains.

The software maker has a well-established pattern of finding ways to commoditize markets first tapped by other companies, and that may be the case once again with enterprise search, according to Burton Group analyst Guy Creese.

By offering a free version, Microsoft is apparently trying to entice companies without enterprise search to give it a try and possibly upgrade to its commercial products.

But there are probably limitations to Microsoft's plans, according to Creese. The company fits into the "superplatform" search category, along with IBM and Oracle, he said: "While they know search is important, they know it's not the be-all, end-all. It's part of the platform they sell."

Creese said high-end or specialized search vendors, therefore, probably won't be affected. But Microsoft's move could pose a threat to companies such as Coveo, which has touted its product's "seamless" integration with SharePoint.

Eric Negler, Coveo's executive vice president of business development, described Microsoft as a key business partner but acknowledged that Search Server presents competition.

He said the company is reacting to Microsoft's move in part by testing the scalability of its indexing technology to a billion or more documents. He added that if Microsoft is successful in growing the market for enterprise search, Coveo will have an additional opportunity to market its complementary audio-video search offering.

"It is the job of Coveo to innovate in areas where large vendors have gaps in their platforms," Negler said. "You're not going to see Coveo sitting on the tracks when these big search trains come down the tracks."

In contrast, specialized search vendors interviewed recently expressed little consternation over Microsoft's plans. "I don't think it will affect us all that much," said Robert Tennant, CEO of Recommind, which recently released the 5.1 version of its Mindserver search platform. Mindserver 5.1 extends the product's abilities around federated search, adding integrations with outside data sources such as the US Food and Drug Administration.

Brainware, which has US offices in Virginia, is another vendor aiming at the high end of the market. It makes search and data-extraction products.

Brainware's CFO and general counsel, James Zubok, said the company believes just a few major players will dominate search within the next four to five years. "We think there's going to be a market for embedded search within certain types of applications," he said.

The company recently struck a deal with SirsiDynix, a provider of software for libraries, to embed Brainware's Globalbrain application in its products. "Right now, we're looking for other relationships with embedded search," Zubok said.