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Anatomy of the Deal

This is the first in an occasional series offering an inside look at prominent deals in the Microsoft partner community.

Microsoft Corp.-Hummingbird Ltd. Agreement: Feb. 7, 2006

The Partner
Toronto-based Hummingbird Ltd., a Microsoft Gold Certified Partner that provides enterprise content management (ECM) and network connectivity applications. Hummingbird, founded in 1984, recorded revenues of $236 million (in U.S. dollars) in fiscal 2005.

The Deal
Hummingbird and Microsoft will align product management and development teams to integrate Hummingbird Enterprise, the company's flagship ECM product, into various Microsoft applications and platforms. The partnership will give customers access to Hummingbird Enterprise through Outlook, SharePoint Portal Server, Office and Internet Explorer.

Hummingbird will offer native support for SQL Server 2005 and early support for Office 2007. Hummingbird has also pledged support for Microsoft's .NET strategy.

The Terms
Specific terms of the deal were not disclosed, but Kyle McNabb, senior analyst at Forrester Research Inc. in Cambridge, Mass., speculates that Microsoft has made a "significant joint marketing investment." He says the deal is in the top third of all Microsoft partnerships in terms of importance.

The Market
The partnership will focus on marketing integrated applications to three vertical industries -- legal, government and financial services -- primarily in the midmarket space. ECM software lets companies manage the lifecycle of corporate information from capture and storage to retrieval and dissemination.

Forrester cites Hummingbird as a strong player in a crowded market that also includes companies such as EMC Corp., FileNet Corp., Interwoven Inc., Mobius Management Systems Inc., Open Text Corp., Stellent Inc., and Vignette Corp., as well as giants such as IBM Corp. and Oracle Corp. and, to an increasing extent, Microsoft.

How Partners Will Benefit
Hummingbird is looking to the Microsoft channel to provide expertise in the three targeted verticals.

"We want to engage more aggressively with the Microsoft channel because it is a channel that has understanding of these markets," said Andrew Pery, CMO and senior vice president of marketing at Hummingbird. "We see the midmarket as a significant opportunity for incremental growth. The demand for enterprise content management solutions is really accelerating with midmarket customers."

How Users Will Benefit
"The new and exciting [aspect] will be the fundamental recognition that users who use [Hummingbird Enterprise] spend most of their time in the Office suite to begin with," McNabb says.

"Now you're going to get much more comprehensive functionality exposed through that environment. The Office suite becomes a platform and not just a productivity tool."

How Hummingbird Will Benefit
Forrester's McNabb says Hummingbird is wisely staving off Microsoft in the ECM arena by embracing Microsoft platforms.

"It's not so much Microsoft helping Hummingbird get into the midmarket as it is Microsoft encroaching on the space where Hummingbird has been a leader," he says. "Do you want to fight Microsoft or embrace it? Hummingbird has chosen to embrace it. The sooner you embrace the infrastructure from the likes of IBM and Microsoft, the better. You don't want to be left on an island trying to compete for infrastructure spend. For Hummingbird, it's a very wise move."

How Microsoft Will Benefit
Integration of Hummingbird Enterprise should help speed widespread adoption of Office 2007, McNabb says.

"It is important for Office 2007," he says. "Microsoft wants to avoid the issues it has had with adoption of Office 2003. It's that much more of a driver for [companies] to say, ‘I'll move forward with Office 2007.'"

About the Author

Lee Pender is the executive features editor of Redmond magazine. You can reach him at lpender@redmondmag.com or follow him on Twitter.

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