Continuing the theme of the Future of ECM … trend #10 …
In the current economic climate, where many organisations are slashing their budgets and de-scoping new projects to focus on essentials to get the job done (dropping many of the extras and “bells and whistles”), open source ECM vendors are stepping up to offer a very viable and cost effective alternative to the mainstream ECM vendors. From a cost perspective, I see open source having three main advantages over mainstream ECM vendors:
1) Less expensive – Over a 5 year period, it is perfectly plausible for an open source solution to come in at half the (software) price of a mainstream ECM vendor;
2) No capital costs – Open source vendors typically receive their revenue from an annual subscription for technical support (against an agreed Service Level Agreement), plus maintenance and software updates. This means that there is minimal upfront investment, as costs are driven out of predicable, annual operating expense as opposed to capital expense;
3) Simpler cost models – Unlike most of the mainstream ECM vendors which typically charge for their software based on a variety of factors and permutations (such as named users, per server/CPU, per optional modules), open source vendors usually charge a single price that is applicable to its entire product suite for customers to mix and match, no hidden extras, no surprises, no “number of user“ price ceilings, etc.
The majority of the open source vendors have to date primarily focused on web content management which has limited their impact on the mainstream ECM vendors. However, I expect this to significantly change over the coming five years as open source vendors start to offer a wider ECM portfolio of products, bringing them into more direct competition with the mainstream ECM vendors. Indeed, the open source vendor, Alfresco, is already there and offers a very compelling and competitive ECM suite.
This continual rise of open source will certainly impact the mainstream ECM vendors. For example:
- They will seek to re-position themselves as more than just “ECM”;
- The licence costs for core ECM products/services will certainly need to drop with more innovative commercial licence models being introduced – see my blog ECM as a commodity.