Speaking from my perspective within the industry, I believe that DCTM has a unique opportunity presented to it at this very moment in time, thanks to the few competitors of any size:
1. Battles where there is legitimate competition between DCTM and FILE, DCTM will have an edge for either product, solution focus, or the sales force itself. Lots of people leaving FILE, many regions have some pretty green reps. FILE is having all sorts of challenges. Follow the threads on SI or Yahoo - there are some very knowledgeable posters following that story.
There are few battles where there are legitimate competition between DCTM and FILE because FILE is still so centered on volume image processing. FILE stated strategy last year was to emulate much of what DCTM was doing. I think they've made very little progress in that area. DCTM added some "good enough" image handling capability to their DM offering and this has got to have assisted them in some opportunities. My personal opinion - the market for DM and workflow, and this KM stuff, is way bigger than the imaging market ever was or will be. FILE doesn't yet seem to get that.
2. OTEX and DCTM are not competition at all. Two different marketplaces. I'm sure they occasionally get sent the same RFP's and thats probably as close as it gets. OTEX is in an interesting spot squarely in between Lotus and Microsoft. Talk about a short squeeze of another nature!
3. PC DOCS might be competition in some limited circumstances. Most often I would bet one or the other walk from an opportunity because one or the other is in the wrong spot if they are both serious contenders. This might change a little going forward in some verticals, but not at all a problem now. To add to their issues, two failed hostile takeover attempts and as of 2am today a friendly takeover by HUMC Hummingbird - well, they've got a lot of work to do and won't be a threat to DCTM any time soon. I tend to feel the market is big and diverse enough for all these players at any rate.
4. There are some smaller DM competitors but not an issue at all for DCTM from where I sit.
To date DCTM has been the most reliable growth engine in this industry and it appears that management there have by far the best track record. There is a lot of crap bandied about in the industry about all the above players and more, but next to none pasted on DCTM. For this reason I am willing to give management a bit of leeway, and I believe that having disappointed this time, they are a) certain of the cause and b) providing solid guidance.
DCTM focus on the solution space was such a good move. I would like to see them extend that into new areas and I suspect this is what was referred to in the results conference call. I do believe that they have their act together to make this work. Between new apps and realising some value out of their KM investment, there is/must be upside. I do not detect unhappy customers or unhappy sales people. Competition is both limited and distracted.
Here's a quality software story with excellent growth prospects, a leading industry position, untarnished name, big and healthy alliances -- what more could I ask for?
I think its a reasonable bet.
I don't work for DCTM or with their products. I'm long but not married to the stock. |
