Tech Outlook: SharePoint Takes a Bigger Piece of the ECM Pie
As Microsoft boosts the product's functionality, SharePoint's influence grows.
SharePoint was conceived a decade ago. At the time, corporations were struggling to make sense of and track the wide -- and ever-growing -- array of digital content in their organizations. As information became more dispersed, businesses wanted to collect it in a central location and provide users with easy access to it. While the product has evolved to incorporate additional functions (search, Web information management, portal), at its core SharePoint remains an Enterprise Content Management (ECM) solution.
At first, Microsoft's foray into the ECM space was lackluster. The company gained some supporters, but many corporations determined that SharePoint didn't match the depth and breadth of functionality found in other solutions. "For a while, competitors ignored SharePoint and deemed it irrelevant," says Mark Gilbert, a research vice president at Gartner Inc.
The product is now on its fourth iteration -- Microsoft has released major enhancements every three years -- and the vendor has significantly narrowed the functionality gap. Consequently, the product has started to gain significant traction and become a leading ECM solution. Even though it has garnered many more supporters, the solution still has some warts. "SharePoint has still fallen short of its promise of storing all of a company's information centrally in an organized way," says Melissa Webster, program vice president of content and digital media technologies at market research firm IDC.
Storing Documents Centrally
ECM solutions store and track electronic documents, or images of paper documents. Their main function is monitoring the different versions of a document as it works its way through the collaboration process. Centrally storing corporate documents can significantly reduce the number of e-mails, eliminate duplication, lower storage costs, and ease the challenge of finding information.
While ECM tools have been available for more than two decades, the market has gained a boost lately because of changing government regulations. Through mandates, such as Sarbanes-Oxley and Dodd-Frank, government and industry regulatory bodies now require that businesses have a plan to track the flow of information throughout their organizations as well as a means to generate reports that outline and validate such processes. Consequently, ECM sales have been increasing at a brisk pace.
As the market has evolved, SharePoint has gained acceptance, which first came primarily from Windows shops. "SharePoint offers tight integration with a number of Microsoft products," explains Gartner's Gilbert. The solution runs on the SQL Server database management system and offers robust connectivity to many Microsoft products, including its Office line and the popular Microsoft System Center management suite.
Making up Lost Ground
Because it was a late entrant in the ECM market, Microsoft has taken a few aggressive steps to generate sales of SharePoint. Since 2007, the company has offered a free version of the product, SharePoint Foundation, which can support small workgroups with modest document management requirements. The vendor's goal is to seed the market with its free tool and entice corporations to eventually migrate to more full-featured (read: costlier) iterations, such as SharePoint Standard, which serves the needs of small to midsize businesses (SMBs), and SharePoint Enterprise, which is targeted at Fortune 500 companies.
In addition, with SharePoint, Microsoft has followed its long, well-established and successful pattern of finding ways to commoditize products in markets first developed by other vendors. Historically, ECMs were designed for large enterprises and carried six- and seven-figure price tags. "Microsoft has put a lot of pricing pressure on its competitors," says Gilbert. The vendor's solution starts off with free software and works its way to the five- and, in select instances, six-figure range.
Historically, Microsoft has built large third-party ecosystems around its different solutions. These resellers fill in missing pieces and provide horizontal functions that Microsoft typically ignores. Recently the SharePoint ecosystem has been growing: Now, there are 6,000 SharePoint partners, more than double the number from three years ago.
A Variety of Third-Party
A number of third-party partners have developed add-on widgets, so it's easier for enterprises to customize and use the product. For instance, a Calendar Web Part from Ukraine-based ArtfulBits consolidates events from different SharePoint lists and presents them in one calendar view. KnowledgeLake Workflow for SharePoint automates the routing of documents for review and approval. In addition, some third parties have taken the ECM and developed turnkey applications. BrightWork pmPoint is a project management suite. With Chem4SharePoint from Burlington, Mass.-based Scilligence Corp., scientists draw, display and search for chemical structures stored in SharePoint. And Evangelyze Communications from Spring, Texas, offers SmartChat, an online customer service and contact center solution.
Microsoft has also focused on simplicity. Traditionally, ECM solutions were complex, hard to deploy and required a great deal of customization. The vendor has tried (with varying levels of success) to make its system simpler to install and drive adoption of ECM solutions from large enterprises down the food chain. The Redmond giant's focus on simpler deployments, lower pricing, and third-party enhancements has changed the traditional ECM customer profile, taking it from Fortune 500 corporations to SMBs or departments in large entities.
L&B Realty Advisors represents one example. In business since 1965, the firm, which has about 100 employees, provides real estate investment management services to institutional investors. The company, which has $5.1 billion in assets under its purview, has 15 servers, 2TB of data and a network that reaches a handful of regional offices. Several years ago, the financial services firm needed to provide users with access to information via a portal and turned to SharePoint. "We found that there were a number of quality add-on tools available, so SharePoint offered us a great deal of flexibility," explains Brenda Hartson, associate director of Information Systems for the firm. In fact, the financial services company relies on KnowledgeLake Connect to upload PDF documents into SharePoint, and on KnowledgeLake Capture for Accounts Payable and Human Resources to upload and index TIFF files.
A Better Option than Excel
Founded by three nuns in 1888, the Edmonton Catholic School system, which serves grades K-12, has grown to 87 schools, 34,616 students, 3,005 staff members and 70,000 parents. In 2007, the school system searched for a records management system for about 150 employees who work with financial and human resources data. "We needed to do a better job centrally managing our data; it was dispersed in various Excel spreadsheets," notes Sean Lakusta, SharePoint architect with the Edmonton Catholic School system. SharePoint's collaboration functions were deemed superior to alternatives, so the school system selected and deployed the solution.
After making steady progress in the ECM space, Microsoft made an aggressive push with its latest release, SharePoint 2010, which includes many significant new functions. A managed metadata feature provides users with a central location in which to store metadata (commonly defined as data about data). With it, businesses can deploy a structured metadata model throughout any site within a SharePoint farm, which makes it more likely that a user will find desired data.
Often, SharePoint works with information generated by other applications, so the product's back-end, data-connectivity capabilities are important. Previously, SharePoint provided read-only access to back-end information. With SharePoint 2010, businesses can now write as well as read that information. Also, with a configurable Web Parts feature, organizations can connect to third-party social-networking sites, such as Facebook and Twitter.
Embracing the Cloud
In addition, cloud computing has been gaining traction as enterprises move information from on-premises to off-site third-party providers. SharePoint is now available as a service in the Microsoft Office 365 platform--previously it was part of the Business Productivity Online Suite, known as BPOS.
Partly because of the enhancements, SharePoint's influence has expanded dramatically. "While it may not be the only central data repository, many organizations use SharePoint to house some corporate information," says IDC's Webster. The Association for Information and Image Management, an ad hoc association that helps businesses track their information needs, estimates that 60 percent to 70 percent of firms rely on the product in some way. With 125 million licenses sold, Microsoft SharePoint has become a top-tier ECM supplier.
Consequently, competitors can no longer ignore the product. "Almost universally, ECM vendors now offer some type of SharePoint connectivity," notes Gartner's Gilbert.
Limitations Become Clear
Yet the Microsoft ECM product does have its limitations. While SharePoint offers connectivity to competitive products, they often reside in a higher spot on the ECM totem pole, especially for large enterprises. "Microsoft does not comply with records management standards from organizations like the Department of Defense," explains IDC's Webster.
Also, the solution still requires a great deal of customization. "We had to do a lot of work to get SharePoint to support the functions that we needed," says L&B Realty Advisors' Hartson. While Microsoft has made it easier for companies to deploy its solution, seldom is a business able to use it straight out of the box. Typically, systems integration work is required, either by in-house programmers or third-party experts. Once such adjustments are made, upgrading becomes more difficult. In sum, SharePoint requires a significant amount of programming help, both in the short term and in the long term.
Like many Microsoft products, SharePoint doesn't work well with other vendors' products. "We have a number of users working with iPhones and tablets that would like to access SharePoint data from those devices," says Edmonton Catholic School system's Lakusta.
So, since its introduction a decade ago, SharePoint has made noteworthy headway in the ECM space. The product has evolved from an industry afterthought into a top-tier solution. While it might not offer as many features as more mature, competitive solutions, it now includes sufficient functionality such that it cannot be ignored and has become a key ECM offering for a growing number of businesses, especially those using other Microsoft products.