Byrne Tony Byrne

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ECM Software Vendor an Oxymoron?

21-Dec-2004

Tags: Document Management (ECM), Selecting Technology, Vendor Viability & Financials

After dipping a bit amid rising software sales in 2003, the ratio of services revenue to software revenues at major "enterprise" content management vendors is climbing again, according to quarterly public filings. For every $100 in revenues, the typical enterprise-tier vendor now obtains more than $60 in services work. For Vignette and Broadvision, services ratios have risen to more than 70% -- all-time highs for both companies. We don't make too much of differences between individual vendors; they may well reflect divergent channel strategies. But buyers should take careful note of the general marketplace trend: at the typical ECM vendor, software remains a loss-leader for their real line of business, which is...consulting...
Update: several people have written in to remind me that "services" also includes the ever-beloved maintenance and support revenue, which is large and typically growing, especially in an established vendor. Good point.
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