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Autonomy - "Die Lieblingssoftware der Geheimdienste"

Wie im Zusammenhang mit der neu vereinbarten Zusammenarbeit mit Svizzer erwähnt wurde, bieten wir im Knowledge Management-Bereich eine Dienstleistungspalette von Desktop-Search bis hin zu komplexen Anwendungen. In letzterem Bereich wurde ja bekanntlich Verity - unser langjähriger Partner - von Autonomy übernommen. Unter dem Titel "Die Lieblingssoftware der Geheimdienste" schrieb Spiegel Online vor einiger Zeit über den Ursprung und die Spezialitäten von Autonomy. Ein spannender Artikel für Sie, eine spannende Zusammenarbeit für Sie und für uns.

Update, 24. Februar 2006: COMPUTER BUSINESS Review Online beleuchtet unter "Autonomy: Searching for Success" das Zusammengehen mit Verity genauso wie die Zukunftsaussichten mit Blick auf die grössten Mitbewerber.

Autonomy: Searching for Success

23rd February 2006
By Jason Stamper

There is a battle underway in the enterprise search market, and UK success story Autonomy needs all the strength it can muster. Jason Stamper reports.

Autonomy is a rare beast indeed: a British software company that went on to conquer its segment worldwide. It has been so successful that it was able to buy its nearest rival, Verity, even though Verity was twice its size by revenue. But despite this confirmation of its status as the gorilla of enterprise search - the combined Autonomy and Verity have annual sales of about $250m and 16,000 customers - it is facing ever stiffer competition from the Norwegian firm Fast Search and Transfer (Fast) and others. Can it capitalise on its early advantage?

Autonomy may conjure up the phrase 'enterprise search', but in fact its portfolio is far broader than that, handling and processing - as well as searching - any unstructured information such as emails, documents, phone calls and video. As founder and CEO Mike Lynch explained when we caught up with him last month: "We want to do for unstructured data what a database does for structured. But as soon as you mention unstructured data people think search. It's about processing the information, not just searching it."

It all started at Cambridge University where Lynch studied Electrical and Information Sciences and became Dr Lynch with a Ph.D. in adaptive techniques in signal processing and connectionist models, as well as a research fellowship in adaptive pattern recognition. It is Autonomy, founded in 1996, that put Lynch on the map.

Despite impressive growth, Autonomy chose to consolidate its position in November last year by taking out its closest competitor, Verity, for about $300m. Verity was the larger company, with revenue of $142.6m in its last financial year against $64.7m for Autonomy. But Verity's recent modest growth had left investors disillusioned and Autonomy chose a good moment to strike, with an offer 30% higher than Verity's market capitalisation.

"We have been the fastest growing public company since 1996," Lynch explains. "We own this space. But we wanted to consolidate that ownership to become the giant of this space, like an Oracle in structured data. We think this is a more fundamental change than from the mainframe to client-server. We think it's that big an opportunity."

The company certainly has an impressive list of customers, including Ford, Reuters, Deutsche Bank, BAE Systems, Sun Microsystems and public sector agencies including the US Department of Defence, NASA and the UK Houses of Parliament.

But despite saying that it does the handling and processing of unstructured data as well as search, Autonomy distances itself from content management vendors, saying it generates revenue both through its product sales and its OEM program. It claims its underlying technology can be found in almost every area of software, with no particular sector contributing more than 10% of its revenue.

But how does Lynch differentiate Autonomy's technology from its rivals in search, including the likes of Fast, Google, Endeca and others? "Most of our business is in the corporate and government area, and in those spaces we competed mostly with Verity," says Lynch." The requirements there really are for being able to handle the complexity and the security element in all this.

"We are not selling a search engine. We are selling technology that enables you to stitch all of the unstructured data in a company together and to process it and route it.

"The Verity acquisition allows us to accelerate that. It also gives us some professional services, and a lower-end product to compete at the low end [the Ultraseek search tool] with Fast and the like."

Like Autonomy in the UK, Fast is something of a national hero in its own home of Norway. It is far smaller than Autonomy, but is growing strongly and winning mindshare. But unlike Autonomy, it does not shy away from the 'enterprise search' moniker. It calls itself "the world leader in enterprise search solutions", and says it "provides business and government the ability to intelligently access, retrieve and analyse information in real time, regardless of data format, structure, or location."

Fast's co-founder and CEO, John Lervik, told CBR that its success has been down to the fact that, "We are very customer oriented. 78% of our customers buy more within 18 months. 40% of our new business is to our existing client base. That's either new applications, or because they have added more capacity."

Lervik is far happier talking about enterprise search than Autonomy, which feels that search is only one small part of its capabilities. "We formulated our vision in 2001, and we said that search was a key enabler of mission-critical applications," says Lervik.

"We realised that search was becoming part of the IT infrastructure. Until then there had been search for an intranet, email, document management and so on. We saw demand now goes along all of these things and that people want to create an information warehouse. But instead of putting all that information into a data warehouse somewhere, they want to keep all their systems as they are, and put a unified search layer on top."

But despite seemingly having different views of their key strategic missions, Fast and Autonomy are becoming increasingly bitter rivals. That rivalry has become particularly intense since Auto-nomy announced it was to acquire Verity in November last year. Fast issued a press release offering, "Safe passage to Verity customers and partners who are facing uncertainty arising from the acquisition of Verity by Autonomy."

Autonomy responded with more aggressive tactics of its own, helping to highlight recent reports in the Norwegian press that have questioned the legality of Fast's accounting practices. It also issued a release offering a "secure transition route for Fast customers and partners who may be concerned about Fast's publicly-known accounting questions."

The allegedly suspect practices were brought to light in an article entitled "Professor Says that Fast is Breaking the Law" that appeared in Norwegian financial newspaper Dagens Naeringsliv last December, after a local economics professor, Atle Johnsen, said its accounting practices could be illegal.

But Lervik told CBR that, "Actually we comply with both Generally Accepted Accounting Principles [GAAP] and International Financial Reporting Standards [IFRS]. There's nothing illegal about them."

Lervik said Atle Johnsen's findings were related to the way it had treated directors' compensation payments within its UK-based Fast Ltd subsidiary, which may not have been appropriate had they been dealt with in the same way for its Norwegian operation.

Nevertheless, Lervik said Fast will be dealing with these financial items in the same manner across all of its subsidiaries in the future.

But it is all too little too late as far as Autonomy's Lynch is concerned. He says Fast's tactics have "gone beyond normal competitive banter" and are "very, very aggressive". He says Fast's claims about the number of times it beats Autonomy in competitive situations, and its figures on how many customers have switched from Autonomy to Fast, are "simply not true".

Lervik stands by his company's claims, insisting: "We [Fast] have not lost a single customer to Autonomy." He also refutes Lynch's assertion that Autonomy has a 90% win rate in competitive situations against Fast.

Autonomy's Lynch hits back, saying, "We have a 90% win rate against them [Fast]. Yet every time they win a customer that has anything to do with Autonomy, they put out a release saying they have won an Autonomy customer. They said they had replaced us at Vodafone and Hutchison, but in both cases they had chosen Fast in only a small subsidiary, while we have remained the standard at both companies."

Competition is obviously fierce, but what separates the two companies in terms of technology? According to Lynch, Fast only offers search, so on that basis it only competes with Autonomy's lower-end Ultraseek search tool.

"Ultraseek competes directly with Fast," Lynch says. "But we don't think there is anything magic in keyword search. Fast do it, we do it, Google does it, Microsoft does it. Customers do want it, as it fills a need today. But I personally think that typing the word 'dog' and getting 10,000 hits is of limited value. I just don't think it's the future. It may be a good starting point for some companies, sure."

Lynch argues that Fast is unable to match the functionality of Autonomy's Intelligent Data Operating Layer (IDOL) Server, the key underlying platform that it says offers a new layer within the enterprise, making it possible for organisations to automatically process digital content and allow applications to communicate with each other.

IDOL Server handles more than just search, offering active matching, agents, alerting and information delivery, automatic categorisation, automatic clustering, automatic contextual summarisation, automatic hyper linking, automatic profiling, collaboration and expertise networks, dynamic taxonomy generation, intelligent XML handling and lots more besides.

On top of its IDOL Server product it offers a number of more tailored applications: Aungate for real-time enterprise governance; etalk for contact centre software and services; Virage for media management technology; and Cardiff business process management (BPM).

Lervik argues that, "We have different focus areas [from Autonomy]. We go direct as well as through partners, we embed into ISVs and we do more ecommerce and ebusiness. Their technology is better suited maybe to compliance and document management. They take the 80%, we take 100%."

The idea that Fast is targeting ecommerce applications more than Autonomy is one area in which Lervik and Lynch are able to agree. "I see Fast as more competitive in ecommerce, because there's no requirement for security there," says Lynch.

So what of Autonomy's argument that Fast's security makes it unsuitable for use within the enterprise, where a customer may use it to search all enterprise information assets? Can Fast's technology pose a security risk when used in the enterprise? "Absolutely." says Lervik.

"National Instruments wanted to turn us off because it enabled employees to see what they shouldn't. But search only discovers the holes in the system. People should look at their security infrastructure and policies first. In fact, you can use Fast to do a Q&A of your security policy. Log in as different users and see what you can see."

Of course Autonomy and Fast are not the only companies competing in this space. Lynch concedes that they often come up against Endeca in the ecommerce space, while both companies have Google on their radars, albeit eating away at the lower end of enterprise search.

Google sells basic enterprise search appliances that sit on a network and enable users to search the intranet and Internet. The company has big ambitions in the space: its European director for Google Enterprise, Roberto Solimene, says the company is looking to expand the channel for its search appliances.

But while Google might be able to claim simplicity over its software-led rivals, the latter can claim technological maturity and capabilities that go beyond simple keyword search. Autonomy has pointed to the apparent advantages of its concept matching functionality in providing context for search results and more accurate results.

Solimene maintains, however, that for the majority of enterprise users that functionality is unnecessary: "We have no evidence that people will use these methods to search. Sometimes it is overkill to use it for the entire company. In general the behaviour of employees is no different from consumers at all."

Lervik concedes that, "We have to assume that the Google appliance will have all the features of us and Autonomy 12 months after us. But we will stay ahead of that curve." Whereas Autonomy argues that its technology goes well beyond search, and is fully protected by over 60 patents anyway.

"It's not just about applications, and certainly not just about search," says Lynch. "I am talking about something much more fundamental than that. This is like the database was for structured data."

CBR Opinion
While Fast will continue to nip at its heels, and Google and others will continue their assault at the lower end of the enterprise search market, Autonomy's software has proven itself capable of far more than search, and Lynch has run a well-oiled business since 1996. In fact, CBR believes that the unstructured information management business is a big enough opportunity for several major players. Autonomy's biggest threat today is not the competition, but its ability to integrate its $300m Verity acquisition successfully and maintain its own organic growth despite such a major distraction.

Verfasst von Hans Fischer um 23.02.06 15:27


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