On January 3, 2008, we emphasized the strategic importance of focusing on enterprise search in 2008 to improve the customer experience you provide. Microsoft seems to agree. On January 7th, Microsoft offered to buy Norwegian enterprise search provider FAST Search and Transfer for $1.2 billion. Here’s Sue Aldrich’s analysis of this latest move:
This is unquestionably good news for both FAST and for Microsoft. FAST had been a juggernaut of growth: in 2005 it was poised to overtake Autonomy, the other large search-focused ISV. But in 2006 FAST faltered, seemed to lose track of its identity, grasped at a series of strategies, and today is half the size of Autonomy. Microsoft will have no such strategic collywobbles.
Microsoft gains some strategic assets with FAST. Microsoft, until very recently, had only the most basic of search capability incorporated in its products. It’s difficult to comprehend that in so many years of investment Microsoft should have produced so little, but there you have it. In the past month, Microsoft has released its first advanced search engine, a first release that will take some years to catch up to the technology already incorporated in FAST’s Enterprise Search Platform (ESP).1 With the addition of this technology, Microsoft could actually compete in the search market. Of course, before Microsoft will do that, Microsoft will have to integrate ESP into Microsoft’s software platforms, marketing strategy, and partner programs. This will take some time: Microsoft has leapfrogged its technical sophistication, but perhaps landed in mud to its hips, and there is a great deal of effort to extricate itself and get cleaned up.
Another key asset resides in FAST’s latest strategic stagger. In mid-2007, FAST decided that it was a media/publishing/advertising platform. Publishers, it was argued, would much rather give money to FAST for an integrated search-based merchandising and advertising and publishing platform than keep handing money to those content-stealing cads at Google. Whatever the merits of this strategy, FAST unquestionably has technology, experience, and customers in the media and advertising realm which will be valuable as Microsoft seeks to increase its share of Internet advertising.
Microsoft customers can look forward to better search capabilities in Microsoft products within a few years. Microsoft’s portal, ecommerce, office, collaboration, and business application offerings all need much better search. FAST customers are justifiably nervous. ESP is written in Java and C++, not Microsoft’s favorites. The search applications FAST offers on ESP, such as its ecommerce search offering, are J2EE applications. It’s difficult to imagine these as core Microsoft investments in the future.
For search engine vendors, the acquisition brings short-term opportunity. For the next year or so, FAST’s customers are ripe for poaching, and neither FAST nor Microsoft will pose much competitive threat as FAST technology, products, and people dissolve into the sea of Microsoft.
~ Patricia B. Seybold and Susan E. Aldrich, Patricia Seybold Group
1) For our reviews of FAST technology, see “High Technology Search and Navigation Test Drive: Finding Specific Information about FAST ESP, Google Search Appliance, IBM OmniFind Edition and Oracle Secure Enterprise Search,” April 19, 2007, by Susan Aldrich, http://dx.doi.org/10.1571/td04-19-07cc, and, “Product Search Research Collection: Establishing evaluation criteria, in-depth analysis, side-by-side comparison, and ranking of five leading product search providers (ATG, Endeca, FAST, Mercado, and WebSideStory),” March 30, 2006, by Susan Aldrich, http://dx.doi.org/10.1571/searchcoll06.