The Google – Autonomy Spat

Check out this InformationWeek story that describes a spat between Google and Autonomy over a white paper that Autonomy released a while back, which they now say is outdated.

My favorite quote from the Autonomy marketing VP:

“It’s basically irrelevant because we see them in less than 1% of all deals.”

Ah, the old “we never see them” line. It’s often used, and often dangerous. Let’s think about it a bit. A recent Outsell report estimates Google’s enterprise search business at $350M in 2006, compared to Autonomy’s $250M in 2006. Practically overnight, and with very little sales and marketing energy, the Google Appliance has become the #1 enterprise search solution, with a commanding 40% lead over the nearest competitor.

And yet, somehow, Autonomy only sees them in 1% of deals. How can that be? Obviously, Autonomy’s trying to position themselves in the high-end market, and Google undoubtedly in the “commodity” space down below.

However brave the marketing, I doubt the statement. It’s probably more like: “of the remaining deals — excluding the ones that we no longer pursue with the Ultraseek product line that we (i.e., Verity) formerly positioned as a low-end search solution — the ones where we correctly know it’s futile to compete against Google — excluding those deals — we only see them 1% of the time.”

Now, I’m not recommending that Autonomy launch a frontal assault on Google. They, and the other enterprise search vendors, were smart to abandon the low-end of the market when Google entered. But the question is: what next? Is there enough high-end to feed them in future? And is anyone else going after that high end, and from where?

Autonomy’s recent results aren’t bad. They grew 20% in 2Q07 over 2Q06, but they’re losing share to Fast who grew 50% in their most recently announced quarter (1Q07). But I’d bet Google is growing at more like 200% than 20%.

This is why always I say the enterprise search market is stuck between a rock and a hard place.

  • The rock is the Google Appliance which is quickly establishing itself as the dominant enterprise search solution.
  • The hard place is database management systems (including both XML content severs like MarkLogic and the major RDBMSs which are slowly improving their content abilities) that provide platforms for enterprise application development.

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