Increasing Integration of Net Boosts Content Management Market

If content is king on the Internet, then the market for content management software and content delivery networks should be in good shape. Most of the research on the sector would seem to agree.

According to research by Frost & Sullivan, creative hardware and software solutions that guarantee reliable delivery of content will become imperative as companies around the world face an Internet traffic bottleneck. The U.S. market for the content delivery industry generated $905 million in 2000 and is expected to reach $12.1 billion by 2007.

Creative solutions usually mean expensive solutions, and as companies pay more attention to the bottom line, it will be imperative for vendors in the content delivery market to show their products are not only creative, but can save money in the process. According to Frost & Sullivan IT Analyst Jarad Carleton, the enterprise market currently regards content delivery as a waste of resources, and most enterprises are reluctant to spend capital for infrastructure improvements.

“Despite the opportunity, participants must educate their customers to realize the market’s potential,” Carleton said. “Profitability is back in fashion and failing to show the cost savings of a solution along with its performance enhancements could be fatal. Content delivery sellers must quantify their advantages and express them in terms that buyers understand. If your company cannot provide basic data regarding potential cost savings as a result of implementing your solution, you will not succeed in this market.”

Further complicating the market for content delivery is the increasingly complicated world of content itself. As the Internet market matures, content will reach beyond delivering Web pages to increasing amounts audio and video. According to the Aberdeen Group, the digital content distribution (DCD) market, which it says consists of technology and services suppliers that provide solutions to enable Internet-based internal and external communications among both enterprises and individuals, will grow from $1.33 billion in 2000 to $5.95 billion in 2005, with a compound annual growth rate of 34.9 percent.

“The market is hungry for DCD solutions that can distribute complex content — including static, dynamic, streaming and interactive content — between the points of creation and the points of consumption,” said Ben Elstein, co-author of the Aberdeen Groups’s report “Digital Content Distribution: New Media, New Challenges.” “As public and private networks shift toward next-generation delivery capabilities, merging audio, video and data, DCD technologies and services will enable enterprises and services providers to offer value-added services to end-users in businesses and the home.”

The Yankee Group projects that sales of content management software will grow to $3 billion in 2004 from $900 million of sales in 2000. Sales of the software will be aided by more widespread adoption of the Internet. Content management systems were initially targeted at media companies seeking to move their content to the Web, but traditional brick-and-mortar companies are now adopting them as well, as they integrate the Internet into their business strategy.

“The increasing integration of the Internet into the business of all companies has placed great burdens on the technical staff responsible for Web sites,” said Rob Perry, a senior analyst for the Yankee Group’s Internet Computing Strategies research and consulting practice. “Leading technology companies are using content management systems to spread this responsibility across teams that can now create better Web sites more quickly and cost effectively.”

The Yankee Group research also found that the increasing sophistication of Web applications will help spur the content management market. Content management systems also provide for the categorization and classification that personalization tools use to match users and content.

“The combination of rich content and application logic is the key to creating compelling and successful Web sites,” Perry said. “The growth in the sales of content management systems is proof that companies recognize that effective content management is a critical part of the development and ongoing management of Internet applications.”

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