Microsoft's recent
announcement of a pair of enterprise search products came as the market
is at a "tipping point," in the words of one spokesman.

Microsoft clearly believes there is a major opportunity, with company
officials saying that about 6 million U.S. businesses don't use enterprise
search products.

Microsoft's new products, Search Server 2008 and Search Server Express 2008,
follow releases from Google and IBM, and are based on technology from Microsoft
Office SharePoint Server 2007. The Express edition, now in a release candidate
stage, can be downloaded free. Feature-wise, it is similar to the commercial
version, but users are restricted to a single installation. Both will be generally
available in the first half of 2008, according to Microsoft. The company has
not released pricing information, but stressed it will be competitive.

The question now is what other vendors stand to lose if Microsoft gains.

The software maker has a well-established pattern of finding ways to commoditize
markets first tapped by other companies, and that may be the case once again
with enterprise search, according to Burton
Group analyst Guy Creese.

By offering a free version, Microsoft is apparently trying to entice companies
without enterprise search to give it a try and possibly upgrade to its commercial
products.

But there are probably limitations to Microsoft's plans, according to Creese.
The company fits into the "superplatform" search category, along with
IBM and Oracle, he said: "While they know search is important, they know
it's not the be-all, end-all. It's part of the platform they sell."

Creese said high-end or specialized search vendors, therefore, probably won't
be affected. But Microsoft's move could pose a threat to companies such as Coveo,
which has touted its product's "seamless" integration with SharePoint.

Eric Negler, Coveo's executive vice president of business development, described
Microsoft as a key business partner but acknowledged that Search Server presents
competition.

He said the company is reacting to Microsoft's move in part by testing the
scalability of its indexing technology to a billion or more documents. He added
that if Microsoft is successful in growing the market for enterprise search,
Coveo will have an additional opportunity to market its complementary audio-video
search offering.

"It is the job of Coveo to innovate in areas where large vendors have
gaps in their platforms," Negler said. "You're not going to see Coveo
sitting on the tracks when these big search trains come down the tracks."

In contrast, specialized search vendors interviewed recently expressed little
consternation over Microsoft's plans. "I don't think it will affect us
all that much," said Robert Tennant, CEO of Recommind, which recently released
the 5.1 version of its Mindserver search platform. Mindserver 5.1 extends the
product's abilities around federated search, adding integrations with outside
data sources such as the U.S. Food and Drug Administration.

Brainware, which has U.S. offices in Virginia, is another vendor aiming at
the high end of the market. It makes search and data-extraction products.

Brainware's CFO and general counsel, James Zubok, said the company believes
just a few major players will dominate search within the next four to five years.
"We think there's going to be a market for embedded search within certain
types of applications," he said.

The company recently struck a deal with SirsiDynix, a provider of software
for libraries, to embed Brainware's Globalbrain application in its products.
"Right now, we're looking for other relationships with embedded search,"
Zubok said.

IDG News Service

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