But a sagging economy isn't all that's to blame for the pain inflicted on these companies--some of their suffering comes as a result of the changing role of content management within the technology landscape. The rise of the application server, competition from large enterprise software vendors, the popularity of open source, and the rise of custom-designed solutions are all squeezing smaller CMS companies into a narrow and murky role.
At the moment Broadvision might be the CMS vendor closest to being on life support, having just completed a 1-for-9 reverse stock split, a sleight of hand to prevent it from being delisted. The company is also trading below cash on hand, suggesting that, at least for the moment, the market believes that the intellectual capital at Broadvision isn't just useless, but a liability.
The job of combining content with other corporate functions has been increasingly taken over by application servers, such as BEA's WebLogic or IBM's WebSphere. As the application server has grown in prominence, all the major CMS vendors have designed or adapted their products to work in conjunction with it. While adaptation was a necessary survival tactic, it left CMS products with an uncertain role. Many of their former core functions, like communication between Web sites and databases, and the compilation of JSPs, can now be performed by the application server. This fact is not lost on IT managers, and some companies that might have previously considered purchasing dedicated CMS software found the built-in functionality of their app servers sufficient.
Another threat to the CMS vendors comes from large enterprise software vendors such as IBM, SAP, and Microsoft, all of which have products that can perform content management functions. The products have the added advantage of interoperability with those behemoths' other software applications. A recent Gartner report on the enterprise portal market outlined a shift from specialist pure-play vendors to larger enterprise vendors, and a similar evolution has occurred in the application server market, where larger companies such as IBM, BEA, and Microsoft took over from such smaller players as Kiva and NetDynamics, both acquired by Sun, SilverStream, acquired by Novell, and Bluestone, acquired by Hewlett-Packard. The content management field is undergoing a similar shift right now.
A third factor cutting into the dedicated CMS vendors is the rise of open-source solutions. Open-source products have improved and gained greater corporate visibility at the same time that money for enterprise software licenses has evaporated. As a result, an increasing number of shops are opting to either go back to in-house development using open-source tools such as Linux and MySQL, or to rely on open-source CMS products such as Zope, Red Hat Content Management (formerly Ars Digita), and OpenCMS.
