The Low-End Theory: Verity Leverages Inktomi Acquisition to Open New Doors


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Where Web was once the magic word for applications, Enterprise has taken its place. And, while finding information on the Web proves an often daunting task in the corporate world, finding the right information when you need it is more than a challenge, it is an imperative. So, while the shift from "Web Content Management" to "Enterprise Content Management" might be a question of semantics, finding essential information is not. Thus, we've seen the Web-search giants—AltaVista, Yahoo!, Google—make their plays into the Enterprise market. But Inktomi, while certainly a strong contender in search of all kinds, its roots firmly rooted in things Enterprise with 2,500 clients using its search to find information behind the firewall.

Then it sold off its Web search business to Yahoo! for a hefty $235 million in stocks and its Enterprise search assets to portal- infrastructure leader Verity for $25 million in cash. If Verity's mission were to build better information infrastructure, then solid search and classification would certainly make a fine fit. And, according to company president, Anthony Bettencourt, "Our focus in the market is managing intellectual capital, semi- or unstructured information that sits within an Enterprise, site, or application." No doubt, finding it lends a great deal to the process of managing information.

With the Inktomi acquisition, Bettencourt says the company now garners 60 percent of its revenue from "the Enterprise space with 1,500 corporate customers and 2,500 department-level customers, which came via the Inktomi acquisition." The acquisition brought Verity a stronger alignment with the Enterprise end of the information management spectrum, but significantly, it provided Verity with access to the tantalizing market segment known as "the low-end."
 
"With Inktomi, we are able to be at the department level so now these people are being introduced to Verity," says Steve Hoechster, who handles Verity's PR. "We are offering the notion of IC capital with an easy migration path." According to Hoechster, even the function of the newly-branded search product, Verity Ultraseek, holds significance for the move, "Ultraseek offers a way to drill further down into information and the word is that we are using it to get to a lower end of the market."

However, Derik van Bronkhorst, Verity's director of corporate marketing, believes that approaching the low end is a simplistic solution because customers will quickly outgrow you. Bettencourt agrees. He thinks that the Inktomi acquisition has provided them with a way to offer an entry path into Verity's K2 federated architecture. He says, "With Ultraseek, we can take a customer from cradle to grave: We can get in while their needs are small or while they are being cautious in spending and let them migrate over time to Verity K2 products or let them move their entire platform over time."

While Bettencourt expressed confidence that all sectors of Verity's business will experience growth in 2003, he did say that the companies average deal size had dropped about 180K to 150K. Inktomi's, according the Bettencourt, was somewhere in the 18K ballpark.

"We've done so well at targeting large Enterprise clients to drive complex KM applications," says Bettencourt. "What we've been lacking is how to get to the low end of the market and that's what we got from the Inktomi acquisition: 2,500 customers, 44 employees, great search, great [Quiver's workflow-intensive] classification, and the XML toolkit technology."


As for XML itself, Bettencourt says, "We don't have a lot of customers asking for it right now, but when they do, we'll be ready. The challenges will be to feed it into K2 and stay focused on highly dynamic intellectual capital."