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ECM: Vendors Drowning in a Red Ocean
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W. Chan Kim and Renee Mauborgne‘s bestseller Blue Ocean Strategy divides businesses and products environments into two types: Red and Blue Oceans. Red Ocean environments are those competing in markets that are highly overcrowded, saturated and commoditized. On the other hand, Blue Oceans are market spaces that are created when companies are able to transcend boundaries of existing markets and carve out a new space where no competitors currently exist. |
An example of a Blue Ocean strategy is Nintendo’s Wii. Rather than compete head-on with Sony’s Playstation and Microsoft’s X-Box, Nintendo redefined what it means to be a game machine, targeting a totally different demographic and at a much lower price point. The result has been an unqualified success. While the Wii is frequently sold out in stores, Playstation3s are being sold at a discount.
And because there is no competition in Nintendo’s new Blue Ocean, profits are fat. Forbes estimates that Microsoft’s employees bring in $177,000 in profit each,
compared to $288,000 at Google and $442,000 per employee at Nintendo after the
introduction of the Wii.
But how about an example of a Red Ocean? You don’t need to look far to see that
ECM is hugely red. There are countless vendors attacking the ECM space, and
while few can boast products that cover the spectrum of functionality that is
classified as ECM, the roadmaps of most product companies in this space are being driven
by the competition — and this appraoch means that there is a never-ending
battle to rollout features and functions that the competition has. Red Ocean companies are always on the defense, sniffing out what their competitors are doing and trying to be a ‘me-too’, while those lucky enough to have found a Blue Ocean have the luxury of being able to look inward and define themselves.
Red Oceans develop as a market matures and people fall into a rut in their thinking about what defines the market space. Some blame goes to analysts and organizations like AIIM, but it is only natural to classify companies, assign labels and compare. The bar is set. The expectations for what companies need to do to compete in a space is pre-defined. The result of this mindset is that innovation in ECM has been incremental rather than revolutionary. Products become increasingly commoditized at ever lower price points.
Is there anyone breaking away from the ECM pack and finding a Blue Ocean? Relatively new ideas like Open Source and SaaS are being adopted, and these may ultimately be the components of a wildly successful Blue Ocean strategy, but that’s yet to be seen. Who will dream the Wii for ECM?
