Don’t expect CMS consolidation in 2009

Yesterday CMS Watch released their annual technology predictions. One of the more surprising ones for me was:

#10. Long-awaited consolidation comes to the WCM space

The CMS Watch team argues that “It may be falling valuations rather than falling sales that inspires some activity here” and they caution that mergers “can be painful for customers, since typically one tool or another goes into the long good-night”.

I don’t have enough insights into the North American web content management (WCM) marketplace to comment on local marketplace dynamics “over there”, but for the European marketplace, I don’t expect any significant consolidation among CMS vendors and CMS products any time soon. Having recently studied the annual reports of Danish vendors such as Dynamicweb and Sitecore, both seem very capable of independently surviving 2009 and beyond. The same goes for larger European vendors such as Alterion, CoreMedia, Day, EPiServer and Terminalfour, which all continue to win new customers and grow the business.

The CMS industry has previously survived one period of low growth (roughly 2001 – 2003) and did not emerge on the other side with less vendors or less products.

My main arguments for why consolidation still will not happen are:

• As an industry we don’t really have any relevant industry standards, which could help ease the migration for customers from one product to another or which could help achieve lower implementation times
• Most vendors are in quite good financial shape. While they might fire some sales staff; perhaps even some engineers. They might exhibit at fewer conferences. Yet they still have a steady source of support revenue keeping them afloat.
• Recent years have been good, so most vendors think very highly of their own valuations. Remember that few European vendors are publicly traded, so with falling interest rates investors might be slightly more patient.
• SharePoint is popular, but if the past is any guide, then it is certainly not an altogether safe choice. The other large vendors, e.g. IBM, Oracle and SAP, don’t have any attractive CMS offering at the moment.
• Who should buy whom? Most of the larger vendors with deep pockets, e.g. Oracle, are busy enough with product development on their existing platform.

If you are more interested in this topic, I highly recommend 2 old, but relevant articles by Australian industry pundit James Robertson:

• The CMS marketplace is starting to crystallise (2007)
• Will your chosen CMS vendor go bust? (2005)

What’s your take? Do you think consolidation will finally happen in 2009?