When, not if, the EFSS market dies
Unless you have spent the last couple of years under a rock, you will have come across EFSS as the latest and greatest fad to hit the ECM and collaboration market. Discussions on EFSS abound, amongst the ECM and Social Collaboration blogs.
Analysts legitimised EFSS as a separate technology marketspace: Forrester published its The Forrester Wave™: File Sync And Share Platforms at the end of 2013, followed by Gartner’s Magic Quadrant for Enterprise File Synchronisation and Sharing (EFSS) in July 2014. They define EFSS as products that allow secure file Synchronisation, Access and Sharing across diverse devices, and positions with vendors like Box, Citrix, EMC, IBM and Accellion as leaders, adding Microsoft, Dropbox, Google, Apple and others as challengers.
The EFSS market is already a dying market
Alas! All is not well in the state of Denmark: The EFSS market is not going to be with us for long, as a separate market segment. Don’t get me wrong, EFSS functionality has been around for years and will continue to be around for many more years to come. But its product transition from niche, to mainstream, to commodity will be very fast.
Secure sharing of files, small and large, has been around for ages in the form of the mature MFT (Managed File Transfer) market, which is used extensively by large financial organisations, Engineering firms, etc. On the flip side, on-line/off-line synchronisation of files across devices has also been around for a long time, used in both ECM and Collaboration platforms. What has changed, which brought EFSS to the fore, is that (a) SaaS and cloud have added an additional layer of accessibility and (b) companies like Box and Dropbox stepped in to fill a gap in the market by providing easily consumable, standalone products that consumers can buy without involving IT. Adopting a Freemium licensing model helped too.
Move forward a couple of years to today and numerous major vendors, across multiple technology sectors, offer EFSS products: IBM ECM, OpenText, VMware, Oracle, Microsoft, Salesforce.com, etc. IBM alone, markets at least four different EFSS products, that I’m aware of:
- Content Navigator (based on SoftLayer)
- IBM Connections Files (using Aspera)
- Mobile Endpoint Management (included in Maas360), and
- Managed File Transfer (acquired through Sterling Commerce).
I wouldn’t be surprised if there are even more, disguised and embedded into other platforms such as Asset Management.
And therein lies the problem. If all of these vendors, from different disciplines, are offering either embedded or explicit EFSS capabilities within their core product licensing, it means that the EFSS market is already commoditised. Enterprises will not invest in dedicated EFSS products or licenses, when they can have comparable functionality for free within their existing investments.
Interestingly Gartner’s own Hype Cycle for Digital Workplace Software, which was published in the same month as their MQ paper, positions EFSS already in the “Trough of Disillusionment” which creates an interesting contradiction. IDC in their Worldwide File Synchronization and Sharing 2014–2018 Forecast and 2013 Vendor Shares report also agree that EFSS is a rapidly commoditising market, although they predict that the market will continue to grow in revenue.
There’s another, perhaps even more important, reason why EFSS is not a sustainable market: As BYOD and platform-agnostic applications develop, the core principle behind EFSS – the need to share and move content transparently and securely – becomes too core and too essential to many different business functions. Companies cannot afford to have multiple and conflicting EFSS tools. EFSS does not lend itself to multiplicity – sooner or later CIOs will need to converge on a single common EFSS platform shared by all employees, otherwise it serves very little purpose, the relative cost of ownership becomes extravagant, and the security risk unmanageable. And that means that unified standards and common protocols for EFSS will prevail. I don’t know yet whose standards – that battle is yet to be fought – but a fearsome battle it will be.
Where next for EFSS?
My prediction is that within 2-3 years, the EFSS market will be completely subsumed into one or more other technology segments. If I was a gambling man (I’m not), my money would be on the Collaboration (aka Digital Workplace) platform becoming the natural “home” for EFSS functionality. At the end of the day, EFSS is primarily a catalyst for exchanging information within the organisation and with third parties. In other words, collaborating.
In an ideal world however, I personally would like to see EFSS become (together with most other collaboration platform features) a native feature of the Operating System’s file system, unified across different O/S platforms. But maybe that’s just wishful thinking!
What does that mean for independent EFSS vendors? They have a very short window of opportunity in which they will have to either transform into a bigger platform (e.g. become ECM or Collaboration vendors), get acquired and assimilated (into a bigger platform vendor, perhaps CRM) or get out (i.e. change technology focus). EFSS vendors without a 3-year exit strategy will just disappear. Today, pure play EFSS vendors enjoy an undeniably large marketshare. That’s because the product marketing teams of established B2B Enterprise Software vendors have been asleep and missed the consumer calling. These vendors are now paying attention, and the time is ticking. Watch this space…
I am a Software Strategist, Social Media explorer and Photographer. Professionally, I have been involved with Document Management, Process Management and Content Management for the last 20+ years. The views here are my own and not those of my employer.
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